Jump to content
House Price Crash Forum
Sign in to follow this  
Realistbear

Japan Sees Continuing Deflation

Recommended Posts

http://uk.finance.yahoo.com/news/bank-of-japan-keeps-rate-near-zero-afp-3972b4de5c4e.html?x=0

Bank of Japan keeps rate near zero
Frank Zeller, 10:44, Friday 5 November 2010
The Bank of Japan held off any extra monetary easing measures to boost its economy Friday despite the US Fed's huge stimulus but the finance minister said he would keep a "very close eye" on US policy..../
BoJ Governor Masaaki Shirakawa said later that his central bank and the Fed were not competing in monetary easing, but he added that expanding the size of asset purchases was "one leading option" if conditions deteriorate.
The bank's downbeat report on the world's number three economy said: "Japan's economy still shows signs of moderate recovery, but the recovery seems to be pausing. Exports and production have recently been more or less flat."
..../
On deflation, which has long hobbled Japan's economy, the bank said
prices were still falling
"due to the substantial slack in the economy as a whole" but also said that the price drops had continued to slow.

Too much overcapcity (slack) too little demand and far too much global debt. The bubble will have to deflate unless the CBs think they can beat the market as Brown thought he could.

Share this post


Link to post
Share on other sites

Its not just the lost decade but the lost decades for Japan. You could see the same happening to the west if this asset bubble creating quantitve easing doesnt work....

Japan didn't purge its none performing loans from its balance sheet for years after their financial crisis.... have the west done theres yet?!!??! Its vital i think to the recovery over the medium term atleast.

Share this post


Link to post
Share on other sites

On deflation, which has long hobbled Japan's economy, the bank said prices were still falling "due to the substantial slack in the economy as a whole" but also said that the price drops had continued to slow.

exactly as I have outlined here:

http://liminalhack.wordpress.com/2010/11/04/water-water-everywhere-not-a-drop-todrink/

1) price drops will continue in nations doing QE until enough of the rest of the world is at zirp too.

2) price drops will be less marked for each round of QE as rates fall in the rest of the world thus reducing the differential and ensuring that with each round of QE more of the QE money stays at home.

effectively the US and japan and the BoE (and ECB, despite their protestations and obfuscations to the contray) have been making monetary policy for the rest of the world, whether they like it or not.

when rates get low enough round the world, or they raise capital inflow controls, there will be a sudden snap back that will push up domestic prices in QE source zones, at which point bernanke can relax since he will have shown up the sheeple like mish who have been banging on about pushing on a string.

Share this post


Link to post
Share on other sites

exactly as I have outlined here:

http://liminalhack.wordpress.com/2010/11/04/water-water-everywhere-not-a-drop-todrink/

1) price drops will continue in nations doing QE until enough of the rest of the world is at zirp too.

2) price drops will be less marked for each round of QE as rates fall in the rest of the world thus reducing the differential and ensuring that with each round of QE more of the QE money stays at home.

effectively the US and japan and the BoE (and ECB, despite their protestations and obfuscations to the contray) have been making monetary policy for the rest of the world, whether they like it or not.

when rates get low enough round the world, or they raise capital inflow controls, there will be a sudden snap back that will push up domestic prices in QE source zones, at which point bernanke can relax since he will have shown up the sheeple like mish who have been banging on about pushing on a string.

I'm not meaning to crawl up your ****, but it's good to have you posting here again. We have been lacking a bit of mind expanding debate recently, IMO. I've been happily pondering away on this stuff over the last few days! :)

I find this discussion on ZIRP and QE all very interesting. Originally, I thought QE1 was to deal with national issues, but the more I read and digest what you are saying, the more it becomes obvious that these actions are more about addressing international trade imbalances. It ties in with recent thoughts/conclusions I have reached and it expands it in areas which are entirely consistent.

Do you think this (using QE to solve trade imbalances) was 'the plan' all along or just an opportunity which has presented itself, due to the sequence of events and the actions of creditor states? Ofc, the sequence of events are very much the result of the actions of the creditor nations in the years running up, which makes me think this has been a plan for some time.

Share this post


Link to post
Share on other sites

Its not just the lost decade but the lost decades for Japan. You could see the same happening to the west if this asset bubble creating quantitve easing doesnt work....

Japan didn't purge its none performing loans from its balance sheet for years after their financial crisis.... have the west done theres yet?!!??! Its vital i think to the recovery over the medium term atleast.

they STILL haven't if I unerstand correctly - Japan's economy is still awash with zombie organisations that shouldn't be there??

more to the point - western non-performing loans are mostly atttributable to mortgage-debt, Japan's problem was that it included a large raft of corporate debt also, a problem (I don't think) we have??

Share this post


Link to post
Share on other sites

..but the finance minister said he would keep a "very close eye" on US policy..../

And do the opposite :lol:

They're said to be very inscrutable you know :P He doesn't want to make more of a mess of things he's got enough problems of his own.

Share this post


Link to post
Share on other sites

http://www.bloomberg.com/news/2010-11-04/hooters-shows-why-deflation-may-never-go-away-william-pesek.html

Hooters Shows Why Deflation May Never Go Away: William Pesek
By William "Willy" Pesek - Nov 4, 2010 10:34 PM GMT
Japan’s newest sensation is one of the world’s oldest: scantily clad women serving cheap booze.
Yes, Hooters Inc. has made its way to Tokyo. Normally when hundreds of Japanese men huddle in line it’s for a new iPhone or video game. These days, it’s to be served beer and chicken wings by waitresses in white tank tops and orange short-shorts. The American chain is gaining popularity in Japan.
It’s also an unlikely sign that deflation will be with Japan for a long, long time.
Anyone who still thinks falling prices are a cyclical phenomenon isn’t looking closely. It’s secular, and the sudden ubiquity of discount outfits shows how Japanese consumption has become a race to the bottom of the pricing spectrum.
Japan used to be an automated-teller machine for brands like Prada, Gucci and Louis Vuitton. Women thought little of plopping down $2,000 for the latest fashions from Milan and Paris. Men didn’t blink at paying $200 for a tie. That’s all fashion-industry history now. Sliding wages and rising job insecurity brought budget-shopping into vogue.
No matter how much yen the Bank of Japan pumps into the economy, deflation deepens.
It’s all about confidence, of which there is virtually none. Companies don’t trust that growth will return and so they avoid investing and hiring and trim salaries. Households fret about the future.

No matter how much Bernanke pumps in to the US economy deflation will deepen. You cannot beat the market, especially when its going tits up.

Share this post


Link to post
Share on other sites

No matter how much Bernanke pumps in to the US economy deflation will deepen. You cannot beat the market, especially when its going tits up.

Until it doesn't.

Weimar?

Share this post


Link to post
Share on other sites

exactly as I have outlined here:

http://liminalhack.wordpress.com/2010/11/04/water-water-everywhere-not-a-drop-todrink/

1) price drops will continue in nations doing QE until enough of the rest of the world is at zirp too.

2) price drops will be less marked for each round of QE as rates fall in the rest of the world thus reducing the differential and ensuring that with each round of QE more of the QE money stays at home.

Your point will be well proved when exported inflation causes 20% YoY prices rises yet not a single government increases their base rate.

Share this post


Link to post
Share on other sites

Your point will be well proved when exported inflation causes 20% YoY prices rises yet not a single government increases their base rate.

why 20%?

Is there some logic behind that number?

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 150 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.