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Showing posts from November, 2014

Japan quantitative easing and trade wars?

My favourite flavour has always been geo-politics, I was never comfortable with pure economics, because economics is not really a science (sorry dad & Sis and mom too).  Using complex model that make massive behavioural assumption is a recipe for disaster...  case and point Japan. Over the past 24 months the Japanese government has begun a massive inflation drive, and a massive devaluation push.  The Yen went from 90 to 110 to the dollar, but the impact on regional currencies has been even more dramatic.  Japan's objective is to create inflation -- so far its been unsuccessful. The means has been massive quantitative easing (e.g. government prints money) and with this cash they have been buying assets -- lots and lots of assets; MBS, bonds (short and long) stocks in a nutshell the Japanese government has depressed the printing button and have been printing Yens like crazy.  In the past 12 months they have issued $750 billion in new money - sligh...