Japan proposes an interesting challenge to hard money economics, having embarked on seemingly massively irresponsible fiscal and monetary policies. One has to keep in mind that these lessons, as extraordinary as they are, only apply under a very specific economic situation. That is, they should certainly not be generalized, but they are interesting and very […]
Entries Tagged as 'Japan'
August 23rd, 2017 · Comments Off on Japan Defies Hard Money Economics
June 11th, 2017 · Comments Off on Buy Japanese Shares
Growth has returned to Japan’s economy, unemployment is low, and prices are peeping up again. Japanese shares are considerably cheaper compared to those of other developed markets, corporate profits are high, and Japanese corporations are sitting on insane amounts of cash. So there are good reasons for buying Japan. The most immediate risk is the […]
June 25th, 2016 · Comments Off on Is Japan Caught In A Public Debt Trap?
So far, the Japanese economy has escaped the bursting of asset bubbles 3x the size of those in the US without suffering a depression or double digit unemployment. The price they paid for that is the ratcheting up of the public debt/GDP ratio, which at 250% looms as a serious threat over Japan and the […]
June 5th, 2016 · Comments Off on Time To Fire Up Japanese Helicopters
Japan hasn’t been able to break the debt-deflationary cycle that has plagued its economy for over two decades. Monetary policy isn’t likely to achieve it either. It’s time for bolder experiments, a fiscal package directly financed by the central bank. While not without risk, the risk of doing nothing shouldn’t be underestimated either. Time To […]
March 20th, 2015 · Comments Off on Japan, A Failed Keynesian State?
It’s popular in certain circles to depict Japan as a sort of Keynesian failed state, plagued by by near insurmountable economic problems such as an insurmountable debt burden. But Japan’s problems can be traced back to the burst of epic asset bubbles, which hobbled the country for decades. While far from perfect, the policy reaction […]
February 10th, 2015 · Comments Off on The Japanese Endgame
Some argue Abeconomics has already failed. Others argue it will end in hyperinflation, or in a massive capital flight, or a bond market crash, or all of the above. Others argue that Japan won’t reach the escape velocity needed to bring its debt situation under control. While we can’t discard these risks entirely, we think […]
January 22nd, 2015 · Comments Off on It’s Too Early To Write The Obituary Of Abeconomics
Some argue that Abeconomics alredy failed (after less than two years) and make it a showcase of failed Keynesianism. It’s too early to draw conclusions though. It’s funny, because what (temparary?) derailed Abeconomics was a tax hike, under the Japanese economic circumstances the very antithesis of Keynesian policy. We should also remind people that Abeconomics […]
December 31st, 2014 · Comments Off on Japanese Shares Still Worth Considering?
The Bank of Japan provided another shot of monetary stimulus, surprising markets all around. We think that under the conditions, they didn’t have much choice, there isn’t any clear alternative. We could learn from history, in the 1930s both the US and Japan beat the depression, only to shoot themselves in the foot. The April […]
November 27th, 2014 · Comments Off on Jananese Shares are Still a Buy
We think that Japanese shares are still attractive, for a number of reasons. They are not expensive, haven’t done much this year, profits are good, big institutions are buying and the government is hell bent of getting Japan out of its deflationary funk. The main risk to us is that the recent tax hike might […]
October 12th, 2014 · Comments Off on Japan’s Lost Decades Revisited
Japan’s experiment with Abeconomics remains widely misunderstood. It is modelled on an earlier successful Japanese reflation attempt in the 1930s. Since the eurozone is plagued by similar ills which threaten the stability of the world economy, the experiment has special relevance here. Japan’s Lost Decades Revisited | Seeking Alpha