4 ms·

So as someone who has assets in Japan, what can I do to protect myself and maybe profit from the looming financial crisis? (reading those kind of articles makes

by gommm 17y ago

So as someone who has assets in Japan, what can I do to protect myself and maybe profit from the looming financial crisis? (reading those kind of articles makes me realize that I really need to read up on economy)

spamizbad 17y ago
I'd take what the author says with a grain of salt; he has a history of making stuff up from whole cloth.
- Fixnum 17y ago
  For example?
- alanthonyc 17y ago
  Can you provide some references please? I'm unfamiliar with his work.
  - dhoe 17y ago
    He blows stuff out of proportion, and writes trollish articles that are popular on link hubs due to their provocativeness. I see a headline predicting doom for any non-British country and a telegraph URL and I know it's him again. His main function seems to be to reassure the Brits that it's much, much worse everywhere else.
    - Keyframe 17y ago
      Not to mention Yen has been the strongest currency for recent period and Japan is actually fighting deflation. If there is one currency I'd be worried about - it's GBP and less so USD. UK still has not shown any positive fundamentals out of the recession, while others have.
  - mschy 17y ago
    He published a book that claimed Clinton was the head of the Arkansas drug trade, and that the Oklahoma City Bombing was an FBI/DOJ operation. I'd call him a nutter, but I don't think that's true. I think he's a smart fellow who recognizes that editorials that take extreme stances sell better than ones that don't... and hey, even a stopped clock is right twice a day.
    - deleted 17y ago
      [deleted]
- fauigerzigerk 17y ago
  Japan's government debt is awfully high. He hasn't made that up. The demographic situation is also real. And he has mentioned that Japan's debt is mostly domestic debt, which is one reason why Japan has not defaulted yet and why any default could be a stealthier thing than what we know from Latin America or Russia. He also said that it could go on like this for years. So I'm not sure what you find so suspicious about what he says in this article.
  - deleted 17y ago
    [deleted]
cwan 17y ago
I did a quick search - I thought what they've been talking about in Zimbabwe was fascinating: http://www.newzimbabwe.com/pages/markets14.17028.html http://www.newzimbabwe.com/pages/markets14.17028.html. The basic idea if you believe that a hyperinflationary environment is coming, you borrow money to invest in hard assets and selected stocks. Hyperinflation will cause the value of the currency to fall dramatically, driving up the value of assets relative to that currency. This is why whenever you see countries devalue their currency to reflect rampant inflation (e.g. most recently Venezuela), people run out to buy whatever they can including TVs, disposable goods because these hold value better than cash. Of course, if you're wrong and the opposite happens (e.g. deflation where currency rises in value but assets fall), you lose money. That said, I'd agree with the general fundamentals Evans-Pritchard describes - but also as he describes, it's basically unknowable when the crash will happen. (By way of warning, when it comes to applying theory to practice, be careful when playing between various currencies - e.g. http://www.moneyweek.com/investments/what-is-the-carry-trade.aspx http://www.moneyweek.com/investments/what-is-the-carry-trade... - which is basically what happened when the markets started unravelling in North America)
- sailormoon 17y ago
  I'd do that, since I want to buy an apartment in Tokyo. But the problem is, I also believe an earthquake is coming ...
Flemlord 17y ago
A passive way to protect yourself is to buy commodities like gold, silver and oil. Gold in particular is considered a great hedge against inflation. If JPY begins to inflate, its exchange rate against other currencies will rise and gold prices (as measured in JPY) will increase. You will "profit" in the sense that you can sell your gold to repurchase yen after the inflation stops. FYI, investing the GLD ETF is the best practical way to buy gold: http://finance.yahoo.com/q?s=gld http://finance.yahoo.com/q?s=gld
- djcapelis 17y ago
  There is a gold bubble right now exactly because too many people are giving exactly this advice. Do you not recognize how often people used to say the same thing about US real estate before 2005? If you want to hedge against inflation then might I suggest US currency? It's remarkably stable and inflates by only a 3-6 points most years: http://www.inflationdata.com/inflation/images/charts/Annual_Inflation/annual_inflation_chart.htm http://www.inflationdata.com/inflation/images/charts/Annual_...
  - patrickgzill 17y ago
    By what mechanism or algorithm have you determined that gold is in bubble territory?
    - djcapelis 17y ago
      That problem is undecidable and bubble is not well defined[1], but you only have to look at the price of gold to see that there's evidence for a claim that gold is in a bubble. Certainly the idea that gold is immune to inflation, overvalue or a bubble is entirely absurd and outright dangerous to the people who might fall into the trap of believing it. [1] If someone had such an algorithm Wall Street financial firms would be making untold amounts of money off of it, most trading algorithms are just rough heuristics that happen to work, but rarely work for extensive periods of time or any specific claims.
  - minsight 17y ago
    That's entertaining advice. The US dollar's value is dropping (and will continue to drop) sharply since they are printing them like mad. If the value of the dollar drops, the value of things relative to the dollar rises (like gold). There isn't a gold bubble, there's a dollar devaluation. The dollar may have been stable in the past, but those days are almost certainly over.

by gommm 17y ago

spamizbad 17y ago

I'd take what the author says with a grain of salt; he has a history of making stuff up from whole cloth.

Fixnum 17y ago
For example?
alanthonyc 17y ago
Can you provide some references please? I'm unfamiliar with his work.
- dhoe 17y ago
  He blows stuff out of proportion, and writes trollish articles that are popular on link hubs due to their provocativeness. I see a headline predicting doom for any non-British country and a telegraph URL and I know it's him again. His main function seems to be to reassure the Brits that it's much, much worse everywhere else.
  - Keyframe 17y ago
    Not to mention Yen has been the strongest currency for recent period and Japan is actually fighting deflation. If there is one currency I'd be worried about - it's GBP and less so USD. UK still has not shown any positive fundamentals out of the recession, while others have.
- mschy 17y ago
  He published a book that claimed Clinton was the head of the Arkansas drug trade, and that the Oklahoma City Bombing was an FBI/DOJ operation. I'd call him a nutter, but I don't think that's true. I think he's a smart fellow who recognizes that editorials that take extreme stances sell better than ones that don't... and hey, even a stopped clock is right twice a day.
  - deleted 17y ago
    [deleted]
fauigerzigerk 17y ago
Japan's government debt is awfully high. He hasn't made that up. The demographic situation is also real. And he has mentioned that Japan's debt is mostly domestic debt, which is one reason why Japan has not defaulted yet and why any default could be a stealthier thing than what we know from Latin America or Russia. He also said that it could go on like this for years. So I'm not sure what you find so suspicious about what he says in this article.
- deleted 17y ago
  [deleted]

cwan 17y ago

I did a quick search - I thought what they've been talking about in Zimbabwe was fascinating: http://www.newzimbabwe.com/pages/markets14.17028.html http://www.newzimbabwe.com/pages/markets14.17028.html. The basic idea if you believe that a hyperinflationary environment is coming, you borrow money to invest in hard assets and selected stocks. Hyperinflation will cause the value of the currency to fall dramatically, driving up the value of assets relative to that currency. This is why whenever you see countries devalue their currency to reflect rampant inflation (e.g. most recently Venezuela), people run out to buy whatever they can including TVs, disposable goods because these hold value better than cash. Of course, if you're wrong and the opposite happens (e.g. deflation where currency rises in value but assets fall), you lose money. That said, I'd agree with the general fundamentals Evans-Pritchard describes - but also as he describes, it's basically unknowable when the crash will happen. (By way of warning, when it comes to applying theory to practice, be careful when playing between various currencies - e.g. http://www.moneyweek.com/investments/what-is-the-carry-trade.aspx http://www.moneyweek.com/investments/what-is-the-carry-trade... - which is basically what happened when the markets started unravelling in North America)

sailormoon 17y ago
I'd do that, since I want to buy an apartment in Tokyo. But the problem is, I also believe an earthquake is coming ...

Flemlord 17y ago

A passive way to protect yourself is to buy commodities like gold, silver and oil. Gold in particular is considered a great hedge against inflation. If JPY begins to inflate, its exchange rate against other currencies will rise and gold prices (as measured in JPY) will increase. You will "profit" in the sense that you can sell your gold to repurchase yen after the inflation stops. FYI, investing the GLD ETF is the best practical way to buy gold: http://finance.yahoo.com/q?s=gld http://finance.yahoo.com/q?s=gld

djcapelis 17y ago
There is a gold bubble right now exactly because too many people are giving exactly this advice. Do you not recognize how often people used to say the same thing about US real estate before 2005? If you want to hedge against inflation then might I suggest US currency? It's remarkably stable and inflates by only a 3-6 points most years: http://www.inflationdata.com/inflation/images/charts/Annual_Inflation/annual_inflation_chart.htm http://www.inflationdata.com/inflation/images/charts/Annual_...
- patrickgzill 17y ago
  By what mechanism or algorithm have you determined that gold is in bubble territory?
  - djcapelis 17y ago
    That problem is undecidable and bubble is not well defined[1], but you only have to look at the price of gold to see that there's evidence for a claim that gold is in a bubble. Certainly the idea that gold is immune to inflation, overvalue or a bubble is entirely absurd and outright dangerous to the people who might fall into the trap of believing it. [1] If someone had such an algorithm Wall Street financial firms would be making untold amounts of money off of it, most trading algorithms are just rough heuristics that happen to work, but rarely work for extensive periods of time or any specific claims.
- minsight 17y ago
  That's entertaining advice. The US dollar's value is dropping (and will continue to drop) sharply since they are printing them like mad. If the value of the dollar drops, the value of things relative to the dollar rises (like gold). There isn't a gold bubble, there's a dollar devaluation. The dollar may have been stable in the past, but those days are almost certainly over.