Last week, the Japanese yen fell through the US$ : ¥150 level for the first time since 1990. It has now fallen by nearly 50% against the US$ in the past two years. The currency is behaving as if Japan were a 3rd world country – whereas it is actually the 3rd largest economy in the world. Clearly, something is very wrong.
Chemicals and the Economy
An Asian debt crisis would shake the global economy, now the ‘Presidential Cycle’ effect is over
The Presidential Cycle is now over. Instead, worries about the recession and the US debt ceiling talks are moving centre-stage. But Asian currency markets are sending a warning signal. A rising US dollar and US interest rates, and a falling yen and yuan, could soon raise the risks of a major Asian debt crisis.
Japan’s premier warns of “social dysfunction” as ageing populations challenge Western and Chinese economies
Japan has wasted trillions of yen with its failed stimulus programmes. Had it devoted even a tenth of this money to developing a proper Retraining programme for people in their 50s/60s, it wouldn’t now be facing a major debt and currency crisis. The rest of the Western world needs to rapidly learn from its mistake.
$1.8tn of stimulus later, Japan’s household spending unchanged
3 years of massive stimulus spending in Japan has had no impact on the problem it was supposed to solve. This is highlighted by new government data on household spending for 2015, as the charts above confirm – they compare 2015 data with that for 2012, before Abenomics began: Spending was almost exactly the same […]
Bank of Japan admits stimulus policy is modelled on Peter Pan
‘Peter Pan’ is one of the world’s most-loved children’s stories.But I hadn’t realised it had also become an economics textbook, at least in Japan. Yet the Governor of the Bank of Japan (BoJ), Haruhiko Kuroda, described his stimulus policy last week as follows to an invited audience: “I trust that many of you are familiar with […]
Eurozone joins Japan’s ‘currency war’ versus the US dollar
The last 10 days have seen turmoil in major currency markets: The Swiss National Bank gave up trying to devalue versus the euro, and the franc jumped 30% in minutes The European Central Bank (ECB) launched its €1tn Quantitative Easing (QE) programme, causing an immediate 3% fall in the euro’s value versus the dollar These are major moves by any historical […]
IMF says economic growth may never return to pre-crisis levels
The Great Unwinding of policymakers’ failed stimulus programmes is now clearly underway in the global economy. The headlines this week all focused on the latest International Monetary Fund (IMF) report: “IMF says economic growth may never return to pre-crisis levels.” And then, in response, the US Federal Reserve suddenly realised that the US economy was not […]
Japan’s debt now $80k for every man, woman and child
Question: Why will Starbucks reduce the menu price for its venti green-tea frappucino in Japan next Tuesday, when the price is actually going up? Answer: Because the government hopes the lower menu price will fool people into thinking the price has gone down It is, of course, a nonsense. And no doubt most Japanese will be quite annoyed that […]
Global interest rates surge as Newton’s 3rd Law continues to operate
Newton’s 3rd Law of Motion states, “To every action there is always an equal and opposite reaction“. Thus the forces of two bodies on each other are always equal and are directed in opposite directions. Policymakers forgot this Law in their response to the 2008 financial Crisis. Instead they believed that cutting short-term interest rates in the major economies to zero, […]
“A word means just what I choose it to mean”
‘When I use a word,’ Humpty Dumpty said, in rather a scornful tone, ‘it means just what I choose it to mean — neither more nor less.’ This quotation from Lewis Carroll’s great novel ‘Through the Looking-Glass‘ rather seems to sum up policymakers’ current approach to financial markets. Two recent examples highlight the issue: • […]
Jump to page: