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What happened to Abe-nomics
Posted on 7/28/13 at 7:40 pm
Posted on 7/28/13 at 7:40 pm
The nikkei keeps going down, I thought Abe was supposed to make bernanke look like an amateur money printer?
3
Posted on 7/28/13 at 8:50 pm to ThaBigFella
I hesitate to link something linked at ZH on this board, but it's a guest post, so maybe a little more palatable.
LINK
LINK
Posted on 7/28/13 at 8:54 pm to ThaBigFella
pushing on a string
Posted on 7/28/13 at 9:54 pm to aaronb023
I recently took a long position in DXJ, a hedged ETF after reading these two pieces. It seems the consensus is the Yen has a lot of value to shed in the next 12-24 months and in early may when the yen was at $103, DXJ was at $54, today it's at $98 and DXJ is at $46 so if it really does hit 110-120, DXJ would probably top $60/share so there is definite upside and it seems Abe is ready to print away!
LINK
LINK
LINK
LINK
Posted on 7/29/13 at 12:56 am to ThaBigFella
Abenomics is supposed to be a 3-part approach: monetary stimulus, fiscal stimulus, & economic reform.
Adding more loans and government debt into the situation without fixing any of the real problems would be crazy, and that's what Japan has done so far, but in theory, it could work out if supply-side economic reforms are actually put in place.
Japan needs more corporate takeovers, ability to hire/fire workers over union objections, immigration, etc.
Abe's party recently won some elections that will give them more control in whatever Japan's legislative body is called, but I'd say that the chances they will pass anything that is actually significant is slim.
In my opinion, Japan needs to raise interest rates while simultaneously increasing the money supply (via direct printing of yen), and then this will allow for a bunch of supply-side measures to lower taxes and government spending, and then to deregulate the corporate economy. The chances of that happening are close to zero though.
Adding more loans and government debt into the situation without fixing any of the real problems would be crazy, and that's what Japan has done so far, but in theory, it could work out if supply-side economic reforms are actually put in place.
Japan needs more corporate takeovers, ability to hire/fire workers over union objections, immigration, etc.
Abe's party recently won some elections that will give them more control in whatever Japan's legislative body is called, but I'd say that the chances they will pass anything that is actually significant is slim.
In my opinion, Japan needs to raise interest rates while simultaneously increasing the money supply (via direct printing of yen), and then this will allow for a bunch of supply-side measures to lower taxes and government spending, and then to deregulate the corporate economy. The chances of that happening are close to zero though.
Posted on 7/29/13 at 1:17 am to Doc Fenton
quote:
Japan needs to raise interest rates
Lots of research is being presented in the fed and published about how the artificially low interest rates are causing stagnant growth. May or maynot be accurate but evidence has been showing it is worth looking into
quote:
ability to hire/fire workers
It is harder to fire a private worker in Japan than it is to fire a competent worker in our government system and that is saying something
Posted on 7/29/13 at 2:23 am to GenesChin
"The curious task of Economics is to demonstrate to men how little they really know about what they imagine they can design" - FA Hayek
Posted on 7/29/13 at 6:00 am to Libertyabides71
Nikkei has shed 8% the last 5 days and the yen strengthened 5% since may!!! Really wtf Abe this is against all you stand for
Posted on 7/29/13 at 7:02 am to ThaBigFella
quote:
yen strengthened 5% since may
It's still down 26.5% since Sept 2012. In currency terms that is a massive move. After it's steep drop from Sept 2012 to this May, a small (relative to its decline) is not unexpected.
Posted on 7/29/13 at 7:31 am to LSU0358
O no I understand, Im just curious why it is strengthening when Abe has laid out his plan and just won re-election. The 2% inflation target he seeks is only achievable one way, bernanke style. 97:1 vs the dollar won't be the answer. Just read today that a few of the biggest companies are turning higher than expected profits bc of abe-nomics
LINK
DXJ seems to be in a great great place for when tapering occurs and US interest rates rise.
seems odd the nikkei fell again last night another 2.5%!!!
LINK
DXJ seems to be in a great great place for when tapering occurs and US interest rates rise.
seems odd the nikkei fell again last night another 2.5%!!!
This post was edited on 7/29/13 at 8:25 am
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