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Japan’s PM prepares to print money for the whole world
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Japan’s PM prepares to print money for the whole world

December 18, 2012 by · Leave a Comment
Filed under: Currency News 

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Looks like the Japanese Yen carry-trade will be getting a fresh boost by Japan’s Prime Minister Shinzo Abe.  Instead of allowing deflation and defaults happen to get debt levels down to sustainable levels, instead we are going to crank them up to unprecedented levels.  In the end this will not work because your debasing your currency and it is a race to the bottom that ends in making a formerly valued currency, valueless.   Enter in, a new currency.

Here are a few interesting quotes I wanted to point out:

We think this could be the beginning of a fresh reflation cycle for the global system, combining with the US recovery to mark a turning point in the crisis

And

It is tremendously important for global growth, and markets are starting to take note

I read the second quote to say, we have to have more credit creation or we will face debt deflation which we want to avoid at all cost.  It will not be pretty when the music stops.

The Telegraph – Japan’s incoming leader Shinzo Abe has vowed to ram through full-blown reflation policies to pull his country out of slump and drive down the yen, warning Japan’s central bank not to defy the will of the people.

The profound shift in economic strategy by the world’s top creditor nation could prove a powerful tonic for the global economy, with stimulus leaking into bourses and bond markets – a variant of the “carry trade” earlier this decade but potentially on a larger scale.

“We think this could be the beginning of a fresh reflation cycle for the global system, combining with the US recovery to mark a turning point in the crisis,” said Simon Derrick from BNY Mellon.

“It is tremendously important for global growth, and markets are starting to take note,” said Lars Christensen from Danske Bank.

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