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Most people on this forum agree that inflation is going to run rampant and that the West will "printy-printy" their way out of debt at the expense of the prudent. Key to this seems to be the principle that the US/Eurozone/UK own their own currency and can print it as they choose. Warren Buffett said as much last week IIRC.

The Japanese also own their own currency, they've been experiencing deflation and low growth for years, and they've been actively devaluing the Yen recently too. Why don't they just print their way out of their predicament?

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The Japanese also own their own currency, they've been experiencing deflation and low growth for years, and they've been actively devaluing the Yen recently too. Why don't they just print their way out of their predicament?

I think they already tried that multiple times and it didn't work. All that happens is that the new cash is saved by people, deposited in the post office bank and then used to buy JGBs. You can print all you like but, if people don't actually spend the cash, you don't get inflation. Until you do of course (Weimar style).

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I think they already tried that multiple times and it didn't work. All that happens is that the new cash is saved by people, deposited in the post office bank and then used to buy JGBs. You can print all you like but, if people don't actually spend the cash, you don't get inflation. Until you do of course (Weimar style).

Why don't they print cash vouchers with a 'use by date'.

I bet they would get spent pretty quickly

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Most people on this forum agree that inflation is going to run rampant and that the West will "printy-printy" their way out of debt at the expense of the prudent. Key to this seems to be the principle that the US/Eurozone/UK own their own currency and can print it as they choose. Warren Buffett said as much last week IIRC.

The Japanese also own their own currency, they've been experiencing deflation and low growth for years, and they've been actively devaluing the Yen recently too. Why don't they just print their way out of their predicament?

The problem japan has historically faced is that they have run a policy of zirp while the rest of the world wasn't. So any new money printed buggers off overseas in search of yield, no matter how much you print, it doesn't get into wages at home.

Of course now much of the rest of the world is in a similar boat, we may see some different dynamics.

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Most people on this forum agree that inflation is going to run rampant and that the West will "printy-printy" their way out of debt at the expense of the prudent. Key to this seems to be the principle that the US/Eurozone/UK own their own currency and can print it as they choose. Warren Buffett said as much last week IIRC.

The Japanese also own their own currency, they've been experiencing deflation and low growth for years, and they've been actively devaluing the Yen recently too. Why don't they just print their way out of their predicament?

They did.

Carry trade.

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Why don't they print cash vouchers with a 'use by date'.

I bet they would get spent pretty quickly

Actually, I think they tried that too! From what I recall, it had more or less no effect as people just used them to buy stuff they'd have bought anyway.

edit add: they gave them out free to all adults citizens.

Edited by tbatst2000
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Most people on this forum agree that inflation is going to run rampant and that the West will "printy-printy" their way out of debt at the expense of the prudent. Key to this seems to be the principle that the US/Eurozone/UK own their own currency and can print it as they choose. Warren Buffett said as much last week IIRC.

The Japanese also own their own currency, they've been experiencing deflation and low growth for years, and they've been actively devaluing the Yen recently too. Why don't they just print their way out of their predicament?

I dunno. Look at how the Swiss National bank is getting on. FT has a good article 'Swiss central bank battles to rein in franc' .

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The problem japan has historically faced is that they have run a policy of zirp while the rest of the world wasn't. So any new money printed buggers off overseas in search of yield, no matter how much you print, it doesn't get into wages at home.

Of course now much of the rest of the world is in a similar boat, we may see some different dynamics.

I guess my concern is that it's not the "rest of the world" that's in a similar boat, just the western world. Could we see a situation where the printing finds its way into Asia-Pacific countries, Germany (post EU exit), Scandanavia, and the expected inflation over here doesn't materialise?

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Japan has never been willing to go all the way and print and give money to the average person. They sort of follow the same playbook as the western nations have of printing to cover losses for the richest few, and the money disappears down bank balance sheets.

In Japan the very idea of giving someone money even though they didnt' put in labour is near unthinkable. The country even frowns on dividends.

Until nations are able to take a second look at that cultural stance, they will never be able to emerge from this recession in my opinion. Japan is going on 20 years and still not willing to do it.

One possible difference is culturally Westerners are not likely to simply accept no hope and no money for long. We are already seeing mass violence in many European nations.

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Japan's enormous debt pile is at a turning point. As mentioned above the Japanese have been buying their government's bonds to fund a secure retirement. This allows the government to issue debt at very low yields to fund their crazy deficit spending. However as people age and begin to retire they will want to sell their bonds for cash. So how will the government raise funding - who can they sell their bonds to?

This year, for the first time ever, pension funds are becoming net sellers of Japanese Government Bonds Pension Funds Become net Sellers

The rot has started. Soon they will have to look to foreign investors, who will require a higher yield to entice them to buy the bonds. Then Japan massive debt pile (some 200% of GDP) will quickly become unsustainable, just as Greece and Italy are experiencing now.

"The dilemma stems from years of Keynesian and Monetarist stupidity"

The sun sets on the Rising Sun. square%20japnaese%20flag.jpg

Edited by no accountant
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I guess my concern is that it's not the "rest of the world" that's in a similar boat, just the western world. Could we see a situation where the printing finds its way into Asia-Pacific countries, Germany (post EU exit), Scandanavia, and the expected inflation over here doesn't materialise?

the developing economies are adding debt at a staggering rate, in places like brazil and china - they are doing their best to catch up.

personal debt in scandanavia and other north european countries like the netherlands is nearly as bad as the UK.

the printing and low IRs of the last 10 years have already found their way into asian inflation.

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Actually, I think they tried that too! From what I recall, it had more or less no effect as people just used them to buy stuff they'd have bought anyway.

edit add: they gave them out free to all adults citizens.

Not only citizens - Some foreign resident tax payers got the dole out too. No impact whatsoever.

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  • 442 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%



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