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> Globally we are going through a period of deflation. What? Pretty much every country has inflation [0]. > BOJ can print money ( yen ) and flood the world a

by mrep 7y ago

> Globally we are going through a period of deflation. What? Pretty much every country has inflation [0]. > BOJ can print money ( yen ) and flood the world and the value of the yen would still go up ! That is definitely not true. If they were to print 518,755,944,000,000 Yen (2017 estimate for their gdp) and flood the market with it (say by giving every citizen an equal share as a lump sum a la helicopter money [1]) the value would certainly drop. > From Softbank's perspective it's a win-win, they get to be owners of really important tech companies and at the same time Japanese companies see a demand surge for their products. So you're saying Softbank doesn't actually care about their return on investments and is really in it to boost Japanese exports? Softbank is big but there's no way any secondary effects from their vision funds investments will return more money to them than the initial investments. Not only that, but your also effectively saying that they were able to swindle 40 billion dollars from the Saudis and I say swindle because the Saudis don't care 1 bit about Japanese exports and are 100% in it for the initial return on investment. [0]: https://en.wikipedia.org/wiki/List_of_countries_by_inflation_rate https://en.wikipedia.org/wiki/List_of_countries_by_inflation... [1]: https://en.wikipedia.org/wiki/Helicopter_money https://en.wikipedia.org/wiki/Helicopter_money

5822130027 7y ago
> That is definitely not true. If they were to print 518,755,944,000,000 Yen (2017 estimate for their gdp) and flood the market with it (say by giving every citizen an equal share as a lump sum a la helicopter money [1]) the value would certainly drop. Are you sure about that ? What if there is no demand ? Japan did try helicopter money, and all their citizens just purchased bonds increasing public debt, without creating any inflation or causing the yen to drop. BOJ has been actively trying to make the yen fall. I agree if BOJ hands everybody in the world a large amount of Yen, then the yen would drop ( initially ), but suddenly every Japanese factory would have to start churning out all types of Japanese widgets - it would roar Japan back into 6% growth, and at the same time cause a world wide collapse of demand for European / American / Chinese / Korean exports ( cars, electronics. toys ). So do you see why other industrialized countries might not allow Japan to just hand Yen out to foreigners ? Japan would be "exporting" deflation to other industrialized countries. Over time as the world absorbs Japanese imports / standards and abandons everything else - there would be no demand for lets say FCC approved electronics. American students who now have access to yen might go to Japan to study programming instead of American colleges and learn Prolog. Take this to it's logical conclusion and in a decade the value of the Yen goes up in relation to the Korean Won, Euro, USD. Of course this is a fantasy, but since you started with a hypothetical, I had to point out how your conclusion might be wrong. Especially since this is exactly what the Japanese have been doing post WW2, the Americans post Bretton Woods with euro dollars, and now the Chinese are flooding the world with the RMB. > but your also effectively saying that they were able to swindle 40 billion dollars from the Saudis and I say swindle because the Saudis don't care 1 bit about Japanese exports and are 100% in it for the initial return on investment. The Saudis have been swindled already when they bought US treasuries, with QE and low yields. They could have owned assets that when up in value due to QE but guess what ? all of it was owned by Americans. This is why the Saudis have abandoned the treasuries market, so have the Chinese ( they are spending it on the Belt and Road ).

by mrep 7y ago

5822130027 7y ago

> That is definitely not true. If they were to print 518,755,944,000,000 Yen (2017 estimate for their gdp) and flood the market with it (say by giving every citizen an equal share as a lump sum a la helicopter money [1]) the value would certainly drop. Are you sure about that ? What if there is no demand ? Japan did try helicopter money, and all their citizens just purchased bonds increasing public debt, without creating any inflation or causing the yen to drop. BOJ has been actively trying to make the yen fall. I agree if BOJ hands everybody in the world a large amount of Yen, then the yen would drop ( initially ), but suddenly every Japanese factory would have to start churning out all types of Japanese widgets - it would roar Japan back into 6% growth, and at the same time cause a world wide collapse of demand for European / American / Chinese / Korean exports ( cars, electronics. toys ). So do you see why other industrialized countries might not allow Japan to just hand Yen out to foreigners ? Japan would be "exporting" deflation to other industrialized countries. Over time as the world absorbs Japanese imports / standards and abandons everything else - there would be no demand for lets say FCC approved electronics. American students who now have access to yen might go to Japan to study programming instead of American colleges and learn Prolog. Take this to it's logical conclusion and in a decade the value of the Yen goes up in relation to the Korean Won, Euro, USD. Of course this is a fantasy, but since you started with a hypothetical, I had to point out how your conclusion might be wrong. Especially since this is exactly what the Japanese have been doing post WW2, the Americans post Bretton Woods with euro dollars, and now the Chinese are flooding the world with the RMB. > but your also effectively saying that they were able to swindle 40 billion dollars from the Saudis and I say swindle because the Saudis don't care 1 bit about Japanese exports and are 100% in it for the initial return on investment. The Saudis have been swindled already when they bought US treasuries, with QE and low yields. They could have owned assets that when up in value due to QE but guess what ? all of it was owned by Americans. This is why the Saudis have abandoned the treasuries market, so have the Chinese ( they are spending it on the Belt and Road ).