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  • fuckedgaijin ‹ General ‹ Gaijin Ghetto

What's up with the value of the YEN?

Groovin' in the Gaijin Gulag
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Postby Greji » Wed Aug 03, 2011 5:58 pm

2triky wrote:It was a completely manufactured crisis that need not have even happened let alone averted.


Exactly. The Bammer and his people were attempting to set up issues that would feature in next year's election. The Repubs, especially Tea Party'ers, did not want to play and so it became another disaster created by Bush by which the nation was going to sink into the sea. Fighting to the wire over taxing the wealthy, taking the paycheck from grandma and getting another stimulus.

The one thing that was interesting, is that the Dems and even Obama, who heretofore have always insisted that Social Security would never be an issue as it has its own account and is separate from government spending and other revenue. It is solely based on each person and their employers payments to that paticular account.

If this is true, why during the current fiasco, did they consistently claim that all plans by the Repubs would cut these particular entitlements? Even the Bamster claimed that if the Government shut down, or the debt ceiling was not raised, it was not certain that social security checks would go out this month, thus strangling grandma. Strange words for a fund that he and his people were alleging to be be completely separate from other government monies. Were they finally admitting after all this time, that the government has been dipping into social security funds? Incidentally, Social security checks arrived in Japan over the weekend before the deal was cut.....

However, this is all very strange coming from a party that has not submitted a budget in almost three years in office and does not appear to be on the verge of doing that before the next national election.

Everytime the Repubs have submitted anything, it's been labeled a political ploy, or like with Ryan's budget plan, an attempt to strangle grandma again. Be it right, or wrong, it would seem the Dems should submit something, other than basking in the so-called glory of a half-assed health bill that may never come to light.

It is Obama this and Obama that. Well, to remind those that forget, the Pesident cannot write or pass legislation. He also cannot spend any money of the US treasury. The laws are written and passed by the Houses of Congress, as well as the approval for budgets. When the Bamster came in so did the Dems and they controlled both houses of Congress, but it remains that nothing was done because it was the Republicans fault. Now that the 'pubs control the House, it is again their fault that nothing can be done. If the Dems couldn't do it when they controlled everything, and now, while they control two of the three branches of government, why should we expect them do anything now, or in the future? Oh, I forgot, it was Bush's fault. The next election will be four years and yet they claim that only more taxes and massive spending can clean up the mess?

Ya'll can keep harping, but it should be becoming more and more clearer. Great ideologies sound great, but the more you see some of them in practice, the more you gotta wonder.....
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Postby Russell » Sat Aug 06, 2011 10:59 am

Greji wrote:Exactly. The Bammer and his people were attempting to set up issues that would feature in next year's election. The Repubs, especially Tea Party'ers, did not want to play and so it became another disaster created by Bush by which the nation was going to sink into the sea. Fighting to the wire over taxing the wealthy, taking the paycheck from grandma and getting another stimulus.

[...]

It is Obama this and Obama that. Well, to remind those that forget, the Pesident cannot write or pass legislation. He also cannot spend any money of the US treasury. The laws are written and passed by the Houses of Congress, as well as the approval for budgets. When the Bamster came in so did the Dems and they controlled both houses of Congress, but it remains that nothing was done because it was the Republicans fault. Now that the 'pubs control the House, it is again their fault that nothing can be done. If the Dems couldn't do it when they controlled everything, and now, while they control two of the three branches of government, why should we expect them do anything now, or in the future? Oh, I forgot, it was Bush's fault. The next election will be four years and yet they claim that only more taxes and massive spending can clean up the mess?

Ya'll can keep harping, but it should be becoming more and more clearer. Great ideologies sound great, but the more you see some of them in practice, the more you gotta wonder.....
:cool:

Dunno what point you are actually trying to make, but it appears that you want to blame the Dems. Not a big fan of the Dems either (Obama is a BIG disappointment after all), but the current high government debt is mostly caused by Repub policies starting with Reagan. Take a look at this graph showing US Gross Federal Debt as Percent of GDP by President.

Image

Starting with Reagan, all presidents have seen their debts rise, the exception being Clinton, a Dem. Obama is actually the first Dem president since Rooseveld under which the debt increased. Most Americans apparently do not understand that debt is just delayed tax, and that all those "tax-friendly" policies of the Repubs actually increase their tax in the long run.
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Postby pheyton » Sat Aug 06, 2011 11:38 am

So is this the thread in which we talk about the S&P US Credit Downgrade?

Unfucking believable that they would do this shit on a Friday after the markets close. Even more unfucking believable coming from an agency that rated CDO's AAA during the housing bubble.

I understand that our political system is completely fucked, but to downgrade our credit rating? Really? If our interest rates change come Monday look the fuck out. Either S&P is going to be history or the world is going to eat on the biggest shit sandwich ever.
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Postby tone » Sat Aug 06, 2011 11:47 am

wtf - its like they want full on 2012/nostradomus style collapse

would you guys get out of the dollar first thing monday?

this shit is bullshit. i feel like im getting burned for a shit show i had no part in creating
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Postby Russell » Sat Aug 06, 2011 1:12 pm

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Postby Coligny » Mon Aug 08, 2011 12:01 pm

pheyton wrote:So is this the thread in which we talk about the S&P US Credit Downgrade?

Unfucking believable that they would do this shit on a Friday after the markets close. Even more unfucking believable coming from an agency that rated CDO's AAA during the housing bubble.

I understand that our political system is completely fucked, but to downgrade our credit rating? Really? If our interest rates change come Monday look the fuck out. Either S&P is going to be history or the world is going to eat on the biggest shit sandwich ever.


Seems it was amateur week at S&P

http://www.businessinsider.com/the-story-behind-sps-downgrade-2011-8
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Postby FG Lurker » Mon Aug 08, 2011 1:54 pm

Coligny wrote:Seems it was amateur week at S&P

http://www.businessinsider.com/the-story-behind-sps-downgrade-2011-8

You're giving them WAY too much credit by limiting it to only a week.

Seems business as usual really -- have no fucking clue, rating things with random dice rolls. "Worthless mortgages? AAA all the way!" "US economy? Meh, downgrade."
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Postby Coligny » Mon Aug 08, 2011 2:53 pm

FG Lurker wrote:You're giving them WAY too much credit by limiting it to only a week.

Seems business as usual really -- have no fucking clue, rating things with random dice rolls. "Worthless mortgages? AAA all the way!" "US economy? Meh, downgrade."


Don't know, this time they worked with the wrong data, issued an analysis to justify a downgrade.

Once given the proper datas, they change the analysis to fit the previous downgrade.

It's quite a bit of a new -really deep- low... Even a highschooler would not escape unharmed from this kind of bullsh1t
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Postby Kuang_Grade » Mon Aug 08, 2011 3:42 pm

Greji wrote:The one thing that was interesting, is that the Dems and even Obama, who heretofore have always insisted that Social Security would never be an issue as it has its own account and is separate from government spending and other revenue. It is solely based on each person and their employers payments to that particular account.

If this is true, why during the current fiasco, did they consistently claim that all plans by the Repubs would cut these particular entitlements? Even the Bamster claimed that if the Government shut down, or the debt ceiling was not raised, it was not certain that social security checks would go out this month, thus strangling grandma. Strange words for a fund that he and his people were alleging to be be completely separate from other government monies. Were they finally admitting after all this time, that the government has been dipping into social security funds? Incidentally, Social security checks arrived in Japan over the weekend before the deal was cut.....

Very simply, because nothing like this has ever happened before and it was unclear exactly what legal authority there was in choosing some spending over others or would be it money comes in/checks go out in order of creation. While some of this was political FUD, shifting the US government to a cash accounting basis would likely been fairly rough...esp when social security's surplus funds are invested, wait for it....US Government bonds.....I believe society security may paying more out than it is currently taking in (it was in 2010...I'm not sure for 2011)....no money to cash out T bills means no money to cover the difference between what SS takes in and pays out which means somebody is going to get shorted....Even if SS was running in the black on cash basis at the moment, SS payments are made monthly while the payments mostly collected biweekly, so it would possible that some payments would have be delayed until payments and collections were in sync enough to cover the checks.
However, this is all very strange coming from a party that has not submitted a budget in almost three years in office and does not appear to be on the verge of doing that before the next national election.

Everytime the Repubs have submitted anything, it's been labeled a political ploy, or like with Ryan's budget plan, an attempt to strangle grandma again.

The office of management and budget (OMB), which is part of the executive branch, puts out a budget proposal every year. You might want to check the constitution and see how many times it mentions or implies 'political party' in it. The fact that you are saying a party should be putting out a budget is a sign of just how bad things are.

And maybe if the republicans could put out a budget plan that was nothing but a lots of words and then some totals at the end (Ryan's proposal is 60 pages text and 8 pages of totals with highly informative classifications as "security" and "non-security" as budget categories...Shit, I've written more detailed business plans for start up firms than Ryan's proposal for the entire US federal budget) the country might be in better position than it is now....but I guess it is a bit too much to expect republicans to actually try to lead with any actual fleshed out proposals when it much easier to simply sit back and purposely fuck up the economy for their own political purposes. I mean, it takes a special level of assholeness to push for the extension of the bush tax cuts and then weeks later turn around and talk about how the budget deficit is destroying the country, which is being fueled in no small part by the extension of those tax cuts (previous deficit projections, including those from the bush era, assumed they wouldn't be renewed.)

But back to the matter of hand....all ratings are relative to their situation...a kick in the balls is much more preferable than getting your limbs cut off....even if the US isn't AAA any more, it still a much safer bet than most of the EU, and light years ahead in security and transparency compared to the BRIC economies.
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Postby Russell » Tue Aug 09, 2011 12:35 am

Kuang_Grade wrote:Very simply, because nothing like this has ever happened before and it was unclear exactly what legal authority there was in choosing some spending over others or would be it money comes in/checks go out in order of creation. While some of this was political FUD, shifting the US government to a cash accounting basis would likely been fairly rough...esp when social security's surplus funds are invested, wait for it....US Government bonds.....I believe society security may paying more out than it is currently taking in (it was in 2010...I'm not sure for 2011)....no money to cash out T bills means no money to cover the difference between what SS takes in and pays out which means somebody is going to get shorted....Even if SS was running in the black on cash basis at the moment, SS payments are made monthly while the payments mostly collected biweekly, so it would possible that some payments would have be delayed until payments and collections were in sync enough to cover the checks.

Yep, Social Security (including retirement) makes up a huge chunk (more than 40%) of the US creditors, as compared with China's 8% chunk.

Image

Kuang_Grade wrote:The office of management and budget (OMB), which is part of the executive branch, puts out a budget proposal every year. You might want to check the constitution and see how many times it mentions or implies 'political party' in it. The fact that you are saying a party should be putting out a budget is a sign of just how bad things are.

Excellent observation!

Kuang_Grade wrote:And maybe if the republicans could put out a budget plan that was nothing but a lots of words and then some totals at the end (Ryan's proposal is 60 pages text and 8 pages of totals with highly informative classifications as "security" and "non-security" as budget categories...Shit, I've written more detailed business plans for start up firms than Ryan's proposal for the entire US federal budget) the country might be in better position than it is now....but I guess it is a bit too much to expect republicans to actually try to lead with any actual fleshed out proposals when it much easier to simply sit back and purposely fuck up the economy for their own political purposes. I mean, it takes a special level of assholeness to push for the extension of the bush tax cuts and then weeks later turn around and talk about how the budget deficit is destroying the country, which is being fueled in no small part by the extension of those tax cuts (previous deficit projections, including those from the bush era, assumed they wouldn't be renewed.)

Spot on! Also see the following article: Is the U.S. Credit Rating a Victim of GOP Sabotage?

Kuang_Grade wrote:But back to the matter of hand....all ratings are relative to their situation...a kick in the balls is much more preferable than getting your limbs cut off....even if the US isn't AAA any more, it still a much safer bet than most of the EU, and light years ahead in security and transparency compared to the BRIC economies.

Let's see what the future brings. The only reason the US appears in a better shape than the other blocks / countries is that they can print free dollars. This will work until they loose their reserve currency status...
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Postby 2triky » Tue Aug 09, 2011 3:32 am

FG Lurker wrote:
Seems business as usual really -- have no fucking clue, rating things with random dice rolls. "Worthless mortgages? AAA all the way!" "US economy? Meh, downgrade."


No shit. It wasn't too long ago for people to forget they gave Lehman an A rating right before the entire bank collapsed...and then right after they publicly stated they did nothing wrong in their analysis.
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Postby tone » Tue Aug 09, 2011 7:55 am

i think its a myth that its my fault because i was a voter during bush and obama... i was feeling a strong none of the above for all three of these elections - and worse i get this feeling like it doesnt matter. that there are forces like the fed and defense industry that know how to take care of their own needs, no matter if the public chooses pepsi or coke

saying that this is obama's fault gives too much power to him, dude is a shoe salesman
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Postby matsuki » Tue Aug 09, 2011 2:30 pm

tone wrote:i think its a myth that its my fault because i was a voter during bush and obama... i was feeling a strong none of the above for all three of these elections - and worse i get this feeling like it doesnt matter. that there are forces like the fed and defense industry that know how to take care of their own needs, no matter if the public chooses pepsi or coke

saying that this is obama's fault gives too much power to him, dude is a shoe salesman


THIS...but it is our fault we let the system get this way :confused:
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Postby Jack » Wed Aug 10, 2011 10:44 pm

With the USD at 76.4 yen now is this at or near an all time record high for the JPY?
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Postby FG Lurker » Thu Aug 11, 2011 4:14 pm

Using the CIA World Factbook I came up with the following numbers:

Total 2010 PPP GDP for main European economies + PIIGs: US$11.42 trillon
Total 2010 debt for main European economies + PIIGs: US$9.89 trillion
Percentage: 86.62%

Total 2010 PPP GDP for Japan: US$4.31 trillion
Total 2010 debt for Japan: US$9.74 trillion
Percentage: 225.80%

The CIA World Factbook provides only percentage debt/GDP ratios so using PPP GDP I calculated an estimate of total debt for each country. The actual numbers may be off slightly but not that much. Considering how much the yen has strengthened since the 2010 numbers were calculated Japan's debt will now exceed that of the EU countries listed.

The debt situation in Europe is one of the reasons the markets are freaking out. For some reason though the debt situation in Japan (which is FAR worse) has been mostly ignored and the yen is considered a "safe haven."

Seriously, What. The. Fuck!? The markets are in no way reflecting fundamentals.

* Included European countries: Italy, Greece, Ireland, France, Germany, UK, Spain, Portugal.
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Postby FG Lurker » Thu Aug 11, 2011 4:19 pm

Jack wrote:With the USD at 76.4 yen now is this at or near an all time record high for the JPY?

All time high was 76.25 just after the quake back in March. This entire situation is fucked. No sane person should consider Japan's currency a "safe haven". Whoever came up with this idea should be committed.
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Postby matsuki » Thu Aug 11, 2011 4:38 pm

FG Lurker wrote:All time high was 76.25 just after the quake back in March. This entire situation is fucked. No sane person should consider Japan's currency a "safe haven". Whoever came up with this idea should be committed.


I'm sending all my extra funds to my business account in the U.S. Not sure that the dollar is all that much better but at least I'll have access to it and fuck letting it sit in a bank here while the Yen gets devalued.
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Postby Taka-Okami » Thu Aug 11, 2011 6:35 pm

FG Lurker wrote:Using the CIA World Factbook I came up with the following numbers:

Total 2010 PPP GDP for main European economies + PIIGs: US$11.42 trillon
Total 2010 debt for main European economies + PIIGs: US$9.89 trillion
Percentage: 86.62%

Total 2010 PPP GDP for Japan: US$4.31 trillion
Total 2010 debt for Japan: US$9.74 trillion
Percentage: 225.80%

The CIA World Factbook provides only percentage debt/GDP ratios so using PPP GDP I calculated an estimate of total debt for each country. The actual numbers may be off slightly but not that much. Considering how much the yen has strengthened since the 2010 numbers were calculated Japan's debt will now exceed that of the EU countries listed.

The debt situation in Europe is one of the reasons the markets are freaking out. For some reason though the debt situation in Japan (which is FAR worse) has been mostly ignored and the yen is considered a "safe haven."

Seriously, What. The. Fuck!? The markets are in no way reflecting fundamentals.

* Included European countries: Italy, Greece, Ireland, France, Germany, UK, Spain, Portugal.


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Postby FG Lurker » Thu Aug 11, 2011 7:22 pm

Taka-Okami wrote:The market can remain irrational longer than you can stay solvent.

Yeah, yeah, mindlessly repeating something that appeared sometime in the 90s makes you look super smart.

Here's another one you can add to your repertoire, "The definition of insanity is doing the same thing over and over and expecting different results."

Both are often incorrectly attributed to various people, Keynes for the first one and Einstein (and others) for the second.

The market will work itself out over time. As much as you like to babble on about the end of the world it's not going to happen.
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Postby ketchupkatsu » Thu Aug 11, 2011 7:53 pm

FG Lurker wrote:Using the CIA World Factbook I came up with the following numbers:

Total 2010 PPP GDP for main European economies + PIIGs: US$11.42 trillon
Total 2010 debt for main European economies + PIIGs: US$9.89 trillion
Percentage: 86.62%

Total 2010 PPP GDP for Japan: US$4.31 trillion
Total 2010 debt for Japan: US$9.74 trillion
Percentage: 225.80%

The CIA World Factbook provides only percentage debt/GDP ratios so using PPP GDP I calculated an estimate of total debt for each country. The actual numbers may be off slightly but not that much. Considering how much the yen has strengthened since the 2010 numbers were calculated Japan's debt will now exceed that of the EU countries listed.

The debt situation in Europe is one of the reasons the markets are freaking out. For some reason though the debt situation in Japan (which is FAR worse) has been mostly ignored and the yen is considered a "safe haven."

...


Since most of the debt is owned by the Japanese (i.e. local pension funds) many inventors believe there is little chance that the Japanese government will default on their own citizens.
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Postby FG Lurker » Thu Aug 11, 2011 7:58 pm

ketchupkatsu wrote:Since most of the debt is owned by the Japanese (i.e. local pension funds) many inventors believe there is little chance that the Japanese government will default on their own citizens.

70% of US debt is domestic too. I don't know what the numbers are for Europe, I'd be interested in finding out though.
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Postby ketchupkatsu » Thu Aug 11, 2011 8:08 pm

FG Lurker wrote:70% of US debt is domestic too. I don't know what the numbers are for Europe, I'd be interested in finding out though.



Maybe they feel the J Government wouldn't screw over their citizens, the U.S. Government not too sure:)
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Postby FG Lurker » Thu Aug 11, 2011 8:29 pm

ketchupkatsu wrote:Maybe they feel the J Government wouldn't screw over their citizens, the U.S. Government not too sure:)

Yeah, Fukushima should give them so much confidence in the j-gov't not fucking over their citizens... :confused:
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Postby Jack » Thu Aug 11, 2011 8:39 pm

FG Lurker wrote:All time high was 76.25 just after the quake back in March. This entire situation is fucked. No sane person should consider Japan's currency a "safe haven". Whoever came up with this idea should be committed.


The Yen is a safe haven. Because of the economic stagnation in Japan most Japanese companies expanded internationally for growth. The result being they are rapatriating all the profits they make in overseas markets. This situation is unlikely to abate anytime soon. The debt to GDP ratio has no bearing on the value of a currency. With Japanese personal savings at just over $15 trillion, there is a lot of room to absorb additional debt.
Japanese government finances are fucked, don't get me wrong. But Japan and Switzerland are viewed as the only blue chip countries in the world.
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Postby FG Lurker » Thu Aug 11, 2011 10:28 pm

Jack wrote:The Yen is a safe haven. Because of the economic stagnation in Japan most Japanese companies expanded internationally for growth. The result being they are rapatriating all the profits they make in overseas markets. This situation is unlikely to abate anytime soon.

More and more production is being moved out of Japan and profits end up being reinvested offshore. Companies get cheaper labour, lower taxes, and don't have to deal with the strong yen. Japan gets fewer and fewer jobs, lower tax revenue, and loses production capacity both present and future. Once the money has been spent to move a factory offshore it is extremely unlikely it will ever return. Detroit is an extreme example of how this sort of thing plays out over time. There are already areas of Japan that are similar (industry has left, now there is nothing). I expect we will see more and more of this.

Jack wrote:The debt to GDP ratio has no bearing on the value of a currency.

Then why are people freaking out over debt & deficit ratios in Europe that are far lower (and with much higher taxes in place to service the debt), resulting in panics and massive currency losses? Japan has a higher debt ratio, a more fucked up population situation than most of Europe, no immigration, a stagnant domestic economy, and is spending 2x tax revenues every year. Europe is freaking out over 10% deficits, Japan has a 50% deficit!

Jack wrote:With Japanese personal savings at just over $15 trillion, there is a lot of room to absorb additional debt.

The overall savings rate is now negative. Younger people (<40) aren't saving much at all and baby boomers are starting to live off their savings. Until that starts to accelerate there is money for bonds, but the end result is still the same: It has to be paid back.

Jack wrote:Japanese government finances are fucked, don't get me wrong. But Japan and Switzerland are viewed as the only blue chip countries in the world.

Japan's disastrous finances don't seem to get a lot of international news coverage. Like many things about this country I think people have developed an image of Japan's currency that is not based on reality, but how they imagine it should be. Japan as a safe haven makes no sense, the fundamentals are not there to back it up when compared to Europe or the US.
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Postby ketchupkatsu » Fri Aug 12, 2011 5:05 am

Spoke with a forex trader and this was his theory...

Because of the stagnation of the Japanese economy, the yen has enjoyed a relatively stable value. He claims that what a 100 yen could buy several years ago in Japan remains the same today, and lately with the deflation in the Japanese economy your purchasing power could actually grow. Thus if there is no other place to park your funds, parking it in the yen would at least theoretically maintain the value of your assets.

Not sure if this makes sense, maybe someone here with more knowledge of the forex markets could elaborate.
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Postby Jack » Fri Aug 12, 2011 8:33 am

ketchupkatsu wrote:Spoke with a forex trader and this was his theory...

Because of the stagnation of the Japanese economy, the yen has enjoyed a relatively stable value. He claims that what a 100 yen could buy several years ago in Japan remains the same today, and lately with the deflation in the Japanese economy your purchasing power could actually grow. Thus if there is no other place to park your funds, parking it in the yen would at least theoretically maintain the value of your assets.

Not sure if this makes sense, maybe someone here with more knowledge of the forex markets could elaborate.


This makes sense and this is how purchasing power parity is calculated. If you compare two currencies, the relationship would be currency of Japan J + the rate of inflation (i) over the currency of U.S. plus its rate of inflation. J(i)/US(i). This ratio would favour the country with low inflation.

However, the rise in the yen has been too strong in relation to other currencies to explain the inflation rate differential.
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Postby Jack » Fri Aug 12, 2011 8:44 am

FG Lurker wrote:Japan's disastrous finances don't seem to get a lot of international news coverage. Like many things about this country I think people have developed an image of Japan's currency that is not based on reality, but how they imagine it should be. Japan as a safe haven makes no sense, the fundamentals are not there to back it up when compared to Europe or the US.


Investors are pretty sophisticated and certainly not emotional. When moving billions of dollars around they check their emotions at the door. They are looking at the hard numbers and Japan stacks up much better than other countries. You mentioned European countries, but although they may have a lower debt level to GDP than Japan, they are maxed out on their ability to increase revenues. They are taxed to death. The U.S. has a lot of room to increase taxes but Republicans are refusing to go that route. I quickly calculated that if the U.S. raised its gasoline tax to the same level as in Canada, where the current fuel price is the equivalent of 96 yen per litre, so not a big stretch, the U.S. would have no deficit. If they institute a VAT-type tax of only 5% they would eliminate their deficit also.

So from a revenue perspective, Japan, too, has a lot of room. The national sales tax is only 5%. Income taxes are pretty low. Tobacco and liquor taxes are very low as well. A pack of cigarettes in Canada is 800 yen, not 410 yen like in Japan.

It has been evident for almost a decade now that Japan needs inflation. If you can figure out how to do that the BOJ would love to hear from you. They have tried everything to create inflation without success. The more they are printing money the yen keeps chugging along upward. Investors are no fools, they know Japan has a lot of room on the revenue side that is not exploited.

You say that the savings rate is declining, which may be true. But the total household savings of $15 trillion is still there. That number may not be growing and in fact shrinking but no other country in the world has that kind of savings. No one. I don't know this for sure but I would speculate that all of Europe put together does not have that kind of household savings tossed in the closets.
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Postby 2triky » Tue Aug 16, 2011 3:03 pm

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Postby damn name » Tue Aug 16, 2011 5:12 pm

And in other news, experts are predicting the Earth will revolve around the Sun through the rest of this year...
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