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AGgressive Metal
Administrator


USA
1937 Posts

Posted - 02/08/2010 :  08:23:55  Show Profile Send AGgressive Metal a Private Message
I was listening to a lecture the other day about how the Japanese, after their stock market and real estate crash in the early 90s, had over 10 stimulus packages totaling over 100 trillion Yen. They also cut taxes twice but didn't cut spending. They lowered interest rates down to zero. Yet with all that, they had almost no price inflation and the Yen has actually strengthened against the dollar. The demand destruction created by the recession and the Japanese people's natural propensity to save combined with who knows what else prevented inflation. Can anyone explain this in more detail?

And he that hath lyberte ought to kepe hit wel / For nothyng is better than lyberte / For lyberte shold not be wel sold for alle the gold and syluer of all the world.
-Caxton's edition of Aesop's Fables, 1484

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Lemon Thrower
1000+ Penny Miser Member



USA
1588 Posts

Posted - 02/08/2010 :  09:16:16  Show Profile Send Lemon Thrower a Private Message
i don't know the complete answer but i'll point out 3 things to you. first, their debt to GDP is off the charts. second, their savings rate was off the charts, which meant the government could rack up huge debts without ever tapping the external debt markets. this also allowed them to finance these deficits at around 1% or less. third, they will soon be a victim of demographics. for some reason, their baby boom occurred about 10 years before ours. they are no longer net savers because of retirements. so they will soon have to float bonds externally. if their cost of debt inches up even a bit, say to 2% or 3%, they will be in a lot of trouble.

Buying:
Peace/Morgan G+ at $15.00
copper cents at 1.3X
wheat pennies at 3X


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