Japan still doesn't get it!
| TOKYO (AP) -- Japan's new finance minister is wasting little time making waves, jolting the foreign exchange market Thursday by calling for a weaker yen as doubts surface about his ability to guide a recovery in the world's No. 2 economy. In unusually explicit remarks for a Japanese finance minister, Naoto Kan vowed to work closely with the central bank to steer the currency toward an "appropriate" level around 95 yen to the dollar. He welcomed the yen's recent retreat from the 14-year high of 84.83 to the dollar hit in November but indicated it hadn't fallen far enough. "I hope currency markets correct themselves further, weakening the yen," he said. |
Trying to export your way to prosperity in a world that is no longer on a gold standard is dumb! All you do is lower the standard of living of your citizens.
Weakening the yen involves deficit spending. That spending would be used in a far better way, with greater results, if the Japanese government spent on goods and services and on policies that would increase domestic wages.
This is a dumb strategy, but you know what? I am a forex trader, so I don't care. I am short the yen. I advise you do the same!
CAN SOMEONE PLEASE CALL PHIL'S GANG ( ON BIZRADIO ) AND LEARN THEM ON HOW THE CHINESE DO NOT LEND ANY OF THERE CURRENCY TO US VIA AN EXCHANGE ?
ReplyDeleteHE KEEPS SAYING THAT THEIR POOR WATER BUFFALO FARMERS SAVE ALL THEIR YUAN AND LOAN THEIR WEALTH TO THE USA.
IT IS THE OPPOSITE - WE GIVE THEM ACCESS TO OUR MARKETS AND THEY OPEN UP A TREASURY ACCOUNT AND GENERATE MONEY FROM THE EXPORTS THEY SEND TO THE USA ( OUR IMPORTS ). THEY ARE SAVING IN USA DOLLARS BY EARNING IN USA DOLLARS BY PURCHASING IN USA DOLLARS.
THE CHINESE WOULD NOT FAIR BETTER BY LETTING THEIR YUAN APPRECIATE BECAUSE ALL THEIR WEALTH IS IN DOLLARS.
THEY DON'T LIKE A LOW DOLLAR SINCE THEY ARE GENERATING AND INSULATING THEIR ENTIRE ECONOMY IN LOW WAGE PRODUCTION WHICH APPEARS ON THE OTHER SIDE OF THE PACIFIC AS USA DOLLAR EARNINGS WHICH ARE SAVED IN TREASURIES.
IT IS IMPOSSIBLE FOR THEM TO LOAN US FROM THEIR SIDE OF THE PACIFIC, AND IT IS IMPOSSIBLE FOR THEM TO RETRACT FROM THE CURRENT SITUATION.
THE ONLY WAY THEY LOSE IS IF THEY APPRECIATE THE YUAN, AND THEY WILL NEVER STOP "LOANING" TO THE USA UNLESS THEY STOP SELLING TO THE USA
Japan has an extremely high savings rate owing to the fact that this is an inherent Asian cultural trait. Add in a rapidly aging population thanks to low birth rates and a close door immigration policy. None of the above is conducive to building an economy based on domestic consumption which is why they focus on exports. I like sushi so go Japan!!!! Just saying....
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