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Re: Japanese deflation & the Yen
Karim,
Search through and look at some of bart's and Finster's work.
What you'll find is that Japan did not print as much as people seem to think. Certainly nothing like the 12%+ of GDP which the US has done.
Secondly Japan did not want monetary inflation. Their goal was simply to sit on the problem until it died of old age...which strategy is still ongoing. The yen carry trade was a phenomena that cropped up because of the duration of ZIRP in Japan and the fact that at the early stages it pushed the yen when the Japanese government wanted it to go. Now of course Japan has been trapped with the unwinding of the yen carry trade hanging like the sword of Damocles over the Japanese economy.
Thirdly interest payments/diverted cash when interest paid is 0.0x% is miniscule. And the debt is owed to the Japanese people, not to the government itself.
This makes perfect sense if the Japanese government never intended to default on its debt. The normal historical thread, on the other hand, is for all governments to eventually default on their debt.
Defaulting on debt is really difficult if it is your own people - that's how government get tossed out on pitchforks.
Defaulting on foreigners, on the other hand...
Originally posted by karim0028
Search through and look at some of bart's and Finster's work.
What you'll find is that Japan did not print as much as people seem to think. Certainly nothing like the 12%+ of GDP which the US has done.
Secondly Japan did not want monetary inflation. Their goal was simply to sit on the problem until it died of old age...which strategy is still ongoing. The yen carry trade was a phenomena that cropped up because of the duration of ZIRP in Japan and the fact that at the early stages it pushed the yen when the Japanese government wanted it to go. Now of course Japan has been trapped with the unwinding of the yen carry trade hanging like the sword of Damocles over the Japanese economy.
Thirdly interest payments/diverted cash when interest paid is 0.0x% is miniscule. And the debt is owed to the Japanese people, not to the government itself.
This makes perfect sense if the Japanese government never intended to default on its debt. The normal historical thread, on the other hand, is for all governments to eventually default on their debt.
Defaulting on debt is really difficult if it is your own people - that's how government get tossed out on pitchforks.
Defaulting on foreigners, on the other hand...
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