::::: Again we would see many Japanese electronic products available instead of Chinese products ::: Japan, the 2nd largest economy was facing many obstacle for their stronger currency value because Japan is a export oriented country. Most of the Automobile manufacturing entity and electronic good industries were in lose henceforth causing trade deficit. But now its their turn. Japan's new governor Haruhiko Kuroda launches huge asset purchasing and boosted qualitative & quantitative monetary easing for turning the country's mild deflation into 2 percent inflation. This will also make a huge impact in the world economy.... :: Lets see what happens next ::
What will happen next is that any Japanese manufacturer associated with the arms industry will see their stocks rise as Japan now needs to join in the arms race, due to the real threat imposed by North Korea. Japan has now stated that it intends to have nuclear bombs. It's ship building industry will be doing well also as Japan is feverishly adding to it's navy.
Interesting thread. CNBC this morning spent some time talking about the size of Japan's money printing undertaking. Apparently the Bank of Japan will be doubling the amount of currency in circulation over a period of two years. Basically, they will be printing the equivalent of 170-180 billion dollars a month, double what the US is currently doing with it's QEX stimulative money printing operation. I have my doubts that printing money can create prosperity, especially when you consider that the BoJ has been printing money like crazy since the Japanese economy went flat in the early 90s and Japan is still in a deflationary cycle. Before the announcement, Japan lead every other other major economy except China in the size of it's money supply, even after the US, UK, and EU ramped up their money printing operations. Apparently the Chinese are starting to get pissed off that the other major economies of the world are actively devaluing their currencies. Looks like a Chinese Century of monetary dominance could get snuffed when every other nation on the planet decides to devalue their currency as much as the Chinese already do.
Paper money be damned! Time to stock up on gold bullion (or bricks) At least the value on these is real. The Japanese Yen has dropped to it's lowest value since 2008. This is the time to trade and acquire as Japan will rebound from it's fiscal folly and recant (I hope). Then your yen will rise and then you can trade. (patience then profit) P.S. most paper money be damned, but not all.
Nice analysis! Though I'd like to denote that Chinese economy is highly export oriented ; so devaluing their currency will always be welcomed for their economy. But the other nations like in Europe would not like to follow that strategy. You know Europe is in economical recession as well as because of many debt crisis(starting from sovereign debt crisis) Euro fall against major currencies.
@ Spoiltdiva, Your view is always respected by me because of your experience. But I'm still doubting about Japan's aggressive monetary policy and I think there is no particular reason for yen's downfall to halt.
Politics my dear fellow, please compare and do the math keeping politics in mind: Bank of Japan (8301 .JA-521%).......minus BlackRock Inc.(BLK+1.46%)............plus Who do you trust? .........trade for yens *now*. "Abenomics" are and will be temporary. Devaluation has more to do with attempting to make Japanese goods cheaper to buy than reality. Either do this or get into massive public (defense) spending. The North Korea crisis now gives him his excuse. Now that he has that, the yen will soon (a year or two) be back to normal status......get it now?
Then how did china make this all happened successfully over decades by the way? Although, I already opened up a position .....as after all Yen is one of my favorite currencies.
OMG China!.........no, I'm not about to go down that long boring road. But I'm glad to read that you've wisely gone to the Yen. Let others panic ( and run) while you make profit in *the long run*.
I'm no expert but from what I can tell, devaluing your currency works in two situations. 1) If you entire economy is setup around export and you can keep other countries from levying import taxes on your goods because you are devaluing your currency (otherwise known as a trade war) or 2) If your country is big enough and resource rich enough and industrious enough to produce everything it consumes, in which case devaluing your currency simply spurs the domestic manufacturing sector. Japan may fall into the first category, only specifically because everyone else is printing money right now. Under normal circumstances, I suspect increasing your money supply over 40% of GDP would earn you some import taxes for currency manipulation. Germany too manufactures and exports, so it can benefit/is benefiting from currency devaluation, though the rest of Europe obviously is not. The US has been surprisingly resilient so far with our money printing operations, and I think that is because we fall into the second category. Mind you, we have seen inflation creep in here and there on prices of certain things, but for the most part, things cost the same and we have become a net exporter of certain things for the first time in a long time. Considering how much US Treasury debt China holds, what can they really do but suck it up and take the haircut, or devalue their currency further still. I suppose going to war is always an option. Perhaps the bigger question is, when every major economy is printing money like it is going out of style, doesn't everything sort of even out? Its like a race to the bottom. I'd hate to be a small country with no natural resources in this climate. For those folks, its probably time to get used to poverty.
As ScoobyDoo used to say, "Ruh Roh". Its almost enough to make me cheer the printing of money in the US.