It always has been. Their economy has been a shambles since the 80s and the cheap yen helps their export market compensate for reduced demand of all their manufactured products, as well as attracting investors. The downside is that it will eventually make it impossible to keep servicing their debt, which is among the highest in the world compare to GDP.
There's the saying: "If I owe you a thousand dollars, and I can't pay it back, I have a problem. If I owe you one million dollars, and I can't pay it back, YOU have a problem."
It took 17 years for the Bank of Japan to raise interest rates from 0% to 0.25% last August. The moment they did, the stock market took a tumble as everyone scrambled to unwind their carry trades.
What's a carry trade? It's when you borrow a cheap currency (like the Yen) and use it to trade another currency (like the US Dollar) so you can dump it in your own market to chase gains. If it sounds like shorting the Yen, that's because it is.
The debt manipulation games and day trading bullshit of the stock market has been a net detriment to the world. We need to go back to gold and actually investing for dividends because you think a company makes a good product. Shorting in particular is only good for gambling by economic manipulators, not good for the actual domestic economy - that shit should be illegal.
Japan is an export economy; they have intentionally kept the Yen weak for this reason. Japan also has very protective import rules, duties, and tariffs, to protect their domestic markets from external competition.
During the 1980s Japan scare, one of the proposed ideas to target scummy Japanese trade restrictions on imports was to mirror Japanese import laws against them. This is why so many Japanese car manufacturers now have plants in the US, they took this threat seriously.
That's because housing prices will either crash, or currencies will hyper-inflate to meet them, or both.
There is no 3rd outcome.
Donald Trump promising to make houses 50% cheaper isn't a pipe-dream. It's going to happen one way or another, and probably blow up the global economy when it does.
Housing prices measured by the Case-Shiller index were surging, increasing by 44.7% from the first quarter in 2003 until their peak in the first quarter of 2006.
The 18-ish year RE Cycle is well known and seems to fit, and predict, the market well.
This would predict the next cycle peak somewhere in 2024, followed by a slow decline in late 2024 and a steep fall playing over the next 3-4 years.
You're gonna have to trust me when I say that I don't give two shits what the Cato institute thinks. The peak in the housing market was prior to 2020. A new artificial peak was created off of interest rates creating a "refinance boom". Since then not only have we been seeing a litany of mortgage business collapse, several banks have refused to do new mortgages (including Wells Fargo), and I will remind you that banks were going under too.
Every mechanism, including government fraud, is being used to prop up the market. Delinquencies are up, consumer fraud is up, every indicator of a horrible housing economy is up. The housing market is dead. We are already well into the decline phase, and are going to move towards free fall when the Fed tries to do to Trump what the Bank of England did to Liz Truss. We just haven't hit the floor yet.
It always has been. Their economy has been a shambles since the 80s and the cheap yen helps their export market compensate for reduced demand of all their manufactured products, as well as attracting investors. The downside is that it will eventually make it impossible to keep servicing their debt, which is among the highest in the world compare to GDP.
Yup, all this.
Weak currencies are always intentional, and this is why every fiat currency is devalued to 0 purchasing power over time, inevitably.
Just print money faster than your debt payments come in, idiot.
Yes, I am teaching a Modern Monetary Theory class. Why do you ask?
Wait a sec, don't they own the most US debt out of any other country in the world?
Yes, but that's not how debt works. You can't just trade yours for someone else's.
Besides. Just say they decide to call in everything the US owes them on paper. How are they going to collect?
It's not really that, is there a chance another country, say China could aquire that from Japan if their economy gets worse?
Yep. But the more US debt any one country holds, the more their own economy is threatened by a possible US default.
There's the saying: "If I owe you a thousand dollars, and I can't pay it back, I have a problem. If I owe you one million dollars, and I can't pay it back, YOU have a problem."
It took 17 years for the Bank of Japan to raise interest rates from 0% to 0.25% last August. The moment they did, the stock market took a tumble as everyone scrambled to unwind their carry trades.
What's a carry trade? It's when you borrow a cheap currency (like the Yen) and use it to trade another currency (like the US Dollar) so you can dump it in your own market to chase gains. If it sounds like shorting the Yen, that's because it is.
The economy is fake and gay.
The debt manipulation games and day trading bullshit of the stock market has been a net detriment to the world. We need to go back to gold and actually investing for dividends because you think a company makes a good product. Shorting in particular is only good for gambling by economic manipulators, not good for the actual domestic economy - that shit should be illegal.
Japan is an export economy; they have intentionally kept the Yen weak for this reason. Japan also has very protective import rules, duties, and tariffs, to protect their domestic markets from external competition.
During the 1980s Japan scare, one of the proposed ideas to target scummy Japanese trade restrictions on imports was to mirror Japanese import laws against them. This is why so many Japanese car manufacturers now have plants in the US, they took this threat seriously.
The cheap housing is showing up in tons of articles.
That's because housing prices will either crash, or currencies will hyper-inflate to meet them, or both.
There is no 3rd outcome.
Donald Trump promising to make houses 50% cheaper isn't a pipe-dream. It's going to happen one way or another, and probably blow up the global economy when it does.
The 18-ish year RE Cycle is well known and seems to fit, and predict, the market well.
This would predict the next cycle peak somewhere in 2024, followed by a slow decline in late 2024 and a steep fall playing over the next 3-4 years.
Here's a Cato Institute article from 2010: https://www.cato.org/commentary/great-18-year-real-estate-cycle
You're gonna have to trust me when I say that I don't give two shits what the Cato institute thinks. The peak in the housing market was prior to 2020. A new artificial peak was created off of interest rates creating a "refinance boom". Since then not only have we been seeing a litany of mortgage business collapse, several banks have refused to do new mortgages (including Wells Fargo), and I will remind you that banks were going under too.
Every mechanism, including government fraud, is being used to prop up the market. Delinquencies are up, consumer fraud is up, every indicator of a horrible housing economy is up. The housing market is dead. We are already well into the decline phase, and are going to move towards free fall when the Fed tries to do to Trump what the Bank of England did to Liz Truss. We just haven't hit the floor yet.
Japan’s Yen level is set by two things :
The expectation of interest rates + Japanese government keeps selling USD to increase the Japanese Yen’s value.