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starbucks4ever (65.15)

Idiot of the day: Japan



October 05, 2010 – Comments (5)

Monetizing debt feels great when that debt is owed to someone else. It doesn't feel nearly as great when your debt, to the tune of two GDPs, is owed to your own citizens. By using Bernanke's methods in a country of savers rather than a country of debtors, Japan is launching a two-pronged attack on its own population, eroding their wealth through inflation at home and through exchange-rate losses of purchasing power abroad. Japanese bondholders will be happy to hear the news.

5 Comments – Post Your Own

#1) On October 05, 2010 at 1:40 PM, cbwang888 (25.72) wrote:

Well, it is good for young Japanese to get jobs but not so good for older generation who saved... 

BOJ could print and buy US equities instead of US bonds ... Or if they are smart, they will follow China to buy and stockpile commodities ...

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#2) On October 05, 2010 at 1:57 PM, starbucks4ever (65.15) wrote:

"BOJ could print and buy US equities instead of US bonds ..."

Even simpler: ask Bernanke for inflation-indexed bonds, with inflation counted correctly by an independent UN commission.

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#3) On October 05, 2010 at 2:42 PM, TigerPack1 (33.60) wrote:


You are not happy with BEN's math when he counts inflation?... American investors have been programmed to believe 1+1=0, and the vast majority buy it, hook, line and sinker!

When investors wake up to the fact that 1+1=2, we are in DEEP, DEEP trouble.

Looks like today's market activity is a watershed, emotion based response to Japan's cry, EVERYONE IN THE POOL!


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#4) On October 05, 2010 at 3:25 PM, starbucks4ever (65.15) wrote:


It's well said. If everyone were rational, we would be trading at $600-700 now, mortgages would cost 8%, and China would be the world's consumption center. What I'm trying to do in real life and in Caps is to gauge the market's irrationality. But sometimes this irrationality still exceeds my wildest projections...

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#5) On October 06, 2010 at 10:33 AM, BillyTG (28.97) wrote:

Japan's actions are a biproduct of US actions. The blame for all this mess belongs squarely and primarily on the American porch.

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