Tag Archive: Japan
Strong Dollar: the Parallels Between Now, the 1980s and 1998-2002, Part 1: Austerity
We examine the relationship between strong dollar phases and austerity in other parts of the world. Between 1983 and 1985 one reason for the strong dollar were high real interest rates in the U.S. after the defeat of the Great Inflation period, the enforced austerity in Southern America and cheap commodity prices caused by generally …
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SNB to Follow the Bank of Japan? Part1
Questions to George Dorgan Is there any chance that the SNB or other central banks could follow the BOJ and just depreciate the currency? George Dorgan: What did the BoJ do? Monetary easing and talk down the yen in a mercantilist style. A central bank is able to talk down a currency only if there … Continue reading »
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Abenomics: Japanese Economy Would Have Recovered Even Without it
Response to Prof. Nick Rowe, Carleton University, Canada and Lars Christensen, the leading “Market Monetarist“. Nick Rowe: Is the Bank of Japan trying to push down bond yields? Well, yes and no. Yes, it is fighting a battle to push down bond yields, but that battle is part of a wider war for economic recovery. And …
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How 40% Renmimbi appreciation vs Yen Caused a Deflationary Commodity Price Shock for World Economy
Everybody is wondering why China is currently so weak, with a HSBC manufacturing in contractionary territory. No wonder, the main competitor in electronics and many more products,the Japanese yen has appreciated by nearly 40%. While China has to fight years-long appreciation of wages, the Japanese profit on years-long deflation and cheaper costs. At the …
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Global Purchasing Manager Indices
Manufacturing Purchasing Manager Indices (PMIs) are considered to be the leading and most important economic indicators. August 2013 Update Emerging markets: Years of strong increases in wages combined with tapering fears have taken its toll: Higher costs and lower investment capital available. EM Companies have issues in coping with developed economies. Some of them …
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When Will Hedge Funds and FX Traders Close their Short Yen Positions?
Hedge Funds have lost their power. This year has shown that their only remaining possibility to gain easy money is a concerted action with some of their friends manipulating currency markets, calling it “currency wars” and creating an unholy alliance with the dovish prime minister Abe. Some of the biggest U.S. hedge-fund investors have made …
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Opinions of Leading Economists on Japan and the Unholy Alliance of Kyle Bass and Shinzo Abe
We give an overview of opinions of leading economists that want to help Japan out of deflation. Paul Krugman, Richard Koo, Adam Posen and Kyle Bass.
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Japanese Currency Debasement, Part 1: Current Account and Japanese Bond Bears
In our first part on Japans currency debasement, we look on three aspects, government bond yields, current account balances and potential hyper-inflation which causes yields to rise strongly.
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Global Purchasing Manager Indices, Update January 25
Manufacturing PMIs are considered to be the leading and most important economic indicators. After a strong slowing in summer 2012 and the Fed’s QE3, this is the fourth month of improvements in global PMIs January 25th Expansion-contraction ratio: There are 15 countries that show values above 50 and 14 with values under 50. Positive-negative-change ratio: …
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Epic Shift in Monetary Policy: Japan goes SNB, Nuclear Option
According to Bloomberg, at least prime minister Abe is taking the nuclear option and is following the SNB in buying foreign assets. This is a huge change in global monetary policy.
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Same Procedure as Every Year: Analysts Shouting “The Great Recession is Over!” But It Is Not!
Or why we do not believe in the American economy. Like every year in Q4, analysts proudly present the end of the great recession: 2009: The big picture: The Great Recession is Over! Long Live the Ordinary Recession …. 2010: Mish Global Trend Analysis: The Great Recession is Over; Bad News: It Doesn’t Feel Like … Continue...
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The Biggest Bubble of the Century is Ending: Government Bond Yields
Government bond yields under 10 years for safe-havens are close to zero. In April 2013, even 20 year bond yields are less than 3%, What can explain this bubble of the century? Update August 16, 2013: So, 10-year Treasury yields have ended the day closer to 3 per cent. But not as close as they … Continue reading »
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Global Purchasing Manager Indices, Update December 17
Manufacturing PMIs are considered to be the leading and most important economic indicators. Since the Fed’s QE3, this is the third month of improvements in global PMIs after a strong slowing in summer 2012. January 25th Expansion-contraction ratio: There are as many countries that show values above 50 as under 50. Positive-negative-change ratio: 18 countries …
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May Japan face a weak yen and high bond yields?
Like often in global economic downturns, the demand for Japanese cars and electronics has fallen in Q3, especially due to European purchasers. Additionally fueled by a row with China, the current account has become negative. Is Japan doomed because the yen will fall and bond yields will rise?
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The Balance Sheet Recession: UK Q2 Housing Equity Injection Largest Since Q2 2011
The American-Taiwanese economist Richard Koo, is the chief-economist of the Nomura Research Institute. In his theory of the Balance Sheet Recession he distinguishes between the “Yang” phase of the economy and the “Yin” phase (the so-called “balance sheet recession”). In “Yang” times companies want to increase profit and people consume a big part of their pay …
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Global Purchasing Manager Indices, Update December 10
Manufacturing PMIs are considered to be the most leading and important economic indicators. Jim O’Neill, Chairman of Goldman Sachs Asset Management, believes the PMI numbers are among the most reliable economic indicators in the world. BlackRock’s Russ Koesterich thinks it’s one of the most underrated indicators. Global Purchasing Manager Indices for the manufacturing industry December 3, 2012 …
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Who Has Got the Problem? Europe or Japan?
A couple of months ago the euro traded close to EUR/USD 1.20 and the whole world was betting on its breakdown. Once the euro downtrend ended thanks to QE3, OMT and euro zone current account surpluses, the common currency did not stop to appreciate against the yen and reached levels of EUR/JPY 104 and above. … Continue reading...
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The End of Swiss and Japanese Deflation
At a time of speculations about global deflation, we show an interesting and very different aspect. Our CPI and wage data comparison among different developed countries, shows that Switzerland and Japan will see both inflation, whereas other countries like Australia will see disinflation.
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The vicious cycle of the US economy or why the US dollar must ultimately fall again
Just some simple words about the vicious cycle of the US economy and the consequences on the US dollar: A stronger USD will not rescue the US economy, quite the contrary. US companies will not hire in the US, but outsource or hire overseas. If they hire in the US, due to the high number …
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