5 ms·

>Less of the "anyone with an ounce of sense" type language, please. Not everyone who disagrees with you is stupid. Not stupid, but brainwashed perhaps. The fac

>Less of the "anyone with an ounce of sense" type language, please. Not everyone who disagrees with you is stupid. Not stupid, but brainwashed perhaps. The fact remains that these predictions of Japanese hyperinflation using the EXACT same argument as yours have continued for two whole decades. When are the predictions going to cease? How many more decades of zero inflation / deflation are needed before it becomes clear that continued deficit spending DOESN'T inevitably lead to hyperinflation? Three decades? Four decades? A century? At what point do you start to consider your model broken and your predictions useless? >And it would be completely true. They tried that in Zimbabwe, didn't they? ABSOLUTELY WRONG. What they tried in Zimbabwe was borrowing a currency they DIDN'T print (US dollars). They were then reliant upon foreign food imports (because they ruined their farm indsutry) and had no real resources to service their FOREIGN debt. So they printed money and tried to exchange it for USD with predictable consequences. Japan did not borrow USD. It will NEVER borrow USD. It will NEVER end up like Zimbabwe. Not now. Not in ten years with 300% debt. Not even with a trade deficit and 500% debt. NEVER. Weimar was like Zimbabwe (its debts were denominated in Gold). Argentina was like Zimbabwe (it pegged its currency to the USD). Greece was like Zimbabwe (it can't print Euros any more than it can print gold). Japan is NOT like Zimbabwe. It controls its debt. It controls its currency. >I'm wall aware that Japan has a few magic charms Japan has no magic charms and its trade balance is irrelevant to its capacity to borrow. It borrows in its own currency so it can borrow as much as it likes at whatever interest rates it likes. End of story. For it to escape its economic rut this idea that it has to first pay off its huge debt needs to die. It actually needs to ramp up spending on jobs, just like the US did at the end of the great depression. People need to stop seeing sky high Japanese debt as the cause of its stagnation and start seeing it as the result of its stagnation. Cause and effect flows the other way.

Pitarou 12y ago
> Not stupid, but brainwashed perhaps. > ... End of story. End of story indeed. I'm obviously too "brainwashed" to have anything of value to say. But I would like to point out that I never said government debt was the cause of Japan's economic stagnation.
- crdoconnor 12y ago
  >I'm obviously too "brainwashed" to have anything of value to say. That depends. Do you still think that hyperinflation is even a remote possibility in Japan? >But I would like to point out that I never said government debt was the cause of Japan's economic stagnation. Nope, you didn't, but austerianism IS still the default economic mode of thought these days amongst Japanese and western elites, and it is strongly linked to the belief in impending hyperinflation.
  - ekianjo 12y ago
    > austerianism IS still the default economic mode of thought these days amongst Japanese and western elites, austerianism?? Where? Japan is overspending by large amounts every single year and I have yet to hear any Japanese politician (apart from Hashimoto) talking about making economies. Abe's program is all about spending to death.
    - crdoconnor 12y ago
      >austerianism?? Where? Japan is overspending by large amounts every single year Where is this opinion being held? Right ^^^ fucking ^^^ here. Where is it being implemented? Here: http://www.bloomberg.com/news/2013-01-29/japan-s-government-proposes-first-spending-cut-in-seven-years.html http://www.bloomberg.com/news/2013-01-29/japan-s-government-... And the consumption tax hike. Many among the Japanese elites (not to mention American and European) feel the same way as you. Even among the neoconservatives they're somewhat schizophrenic about spending.
      - ekianjo 12y ago
        > Here: http://www.bloomberg.com/news/2013-01-29/japan-s-government-.. http://www.bloomberg.com/news/2013-01-29/japan-s-government-.... And the consumption tax hike. Haha. That's not austerianism. Austerity is when you cut down to the levels of spending you can afford. What Japan (and many other countries around the world) are calling "austerity" is just digging the hole a little less fast. But they are still actively digging the hole, year after year, producing more and more debt. Austerity is just an over-abused media buzzword to say you are cutting a small piece in your obese amount of spendings. Nothing to do with the actual meaning of the word. The tax hike will have nil effects on the fact that there are deep changes in Japan's structure to stop overspending, without mentioning the fact that increasing tax will bring diminishing revenues (and lower consumption) after a certain limit.
J_ 12y ago
One could argue that you're the one that's brainwashed. >Japan's currency will never inflate because it's always been that way I think you're going to change your tone very quickly over the next year or so. Japan's government has never set targets for inflation until now. They are sitting on the largest debt stack to gdp in the world right now at ~245%. They spend almost half their revenues on debt service ALONE. What happens when inflation hits two percent? What do you think all of these people holding JGBs bringing in 60bp are going to do? They're going to run, not walk. There was a day and a half when not a single person bought a Japanese government bond because the government wasn't purchasing. The government is buying ALL and I mean ALL the bonds right now. They are printing as much money as the fed in an economy that is a third our size (~70 billion USD per month). They are going to double the monetary base in two years. This is clearly unsustainable and the yen is in for some serious devaluation in the very near term when people start running from JGBs.
- Pitarou 12y ago
  Is Kyle Bass standing over your shoulder? ;-) I think it's more like 25% of revenues, not 50%, but otherwise you're spot on. BTW, the bond futures market froze up last week, too. But what you're forgetting is that our friend crdoconner has no problem with the idea that the government can print money and then lend it to itself at whatever interest rate it chooses. (Either that, or he doesn't understand the difference between benchmark interest rates and government bond prices.)
  - J_ 12y ago
    Hehe. I love Kyle. He's really good at explaining himself. I think you would have been right a couple years ago. Japan is projected to spend $257 billion on debt service this year. They bring in about $500 billion in revenues.
- crdoconnor 12y ago
  >>>Japan's currency will never inflate because it's always been that way Why are you quoting me? I NEVER said this. In fact, I said the OPPOSITE - inflation is already rising in Japan and it is likely to continue to rise. It's hyperinflation that I ruled out. >This is clearly unsustainable No it isn't. It's been said that it was unsustainable 20 years ago as I said above. This is why the ratings agencies IDIOTICALLY predicted Japanese default in 1997. Cue 20 more years of zero percent interest rates. They were a little bit wrong. It wasn't unsustainable then which is why it continued for 20 more years. And it's not now either.

Pitarou 12y ago

> Not stupid, but brainwashed perhaps. > ... End of story. End of story indeed. I'm obviously too "brainwashed" to have anything of value to say. But I would like to point out that I never said government debt was the cause of Japan's economic stagnation.

crdoconnor 12y ago
>I'm obviously too "brainwashed" to have anything of value to say. That depends. Do you still think that hyperinflation is even a remote possibility in Japan? >But I would like to point out that I never said government debt was the cause of Japan's economic stagnation. Nope, you didn't, but austerianism IS still the default economic mode of thought these days amongst Japanese and western elites, and it is strongly linked to the belief in impending hyperinflation.
- ekianjo 12y ago
  > austerianism IS still the default economic mode of thought these days amongst Japanese and western elites, austerianism?? Where? Japan is overspending by large amounts every single year and I have yet to hear any Japanese politician (apart from Hashimoto) talking about making economies. Abe's program is all about spending to death.
  - crdoconnor 12y ago
    >austerianism?? Where? Japan is overspending by large amounts every single year Where is this opinion being held? Right ^^^ fucking ^^^ here. Where is it being implemented? Here: http://www.bloomberg.com/news/2013-01-29/japan-s-government-proposes-first-spending-cut-in-seven-years.html http://www.bloomberg.com/news/2013-01-29/japan-s-government-... And the consumption tax hike. Many among the Japanese elites (not to mention American and European) feel the same way as you. Even among the neoconservatives they're somewhat schizophrenic about spending.
    - ekianjo 12y ago
      > Here: http://www.bloomberg.com/news/2013-01-29/japan-s-government-.. http://www.bloomberg.com/news/2013-01-29/japan-s-government-.... And the consumption tax hike. Haha. That's not austerianism. Austerity is when you cut down to the levels of spending you can afford. What Japan (and many other countries around the world) are calling "austerity" is just digging the hole a little less fast. But they are still actively digging the hole, year after year, producing more and more debt. Austerity is just an over-abused media buzzword to say you are cutting a small piece in your obese amount of spendings. Nothing to do with the actual meaning of the word. The tax hike will have nil effects on the fact that there are deep changes in Japan's structure to stop overspending, without mentioning the fact that increasing tax will bring diminishing revenues (and lower consumption) after a certain limit.

J_ 12y ago

One could argue that you're the one that's brainwashed. >Japan's currency will never inflate because it's always been that way I think you're going to change your tone very quickly over the next year or so. Japan's government has never set targets for inflation until now. They are sitting on the largest debt stack to gdp in the world right now at ~245%. They spend almost half their revenues on debt service ALONE. What happens when inflation hits two percent? What do you think all of these people holding JGBs bringing in 60bp are going to do? They're going to run, not walk. There was a day and a half when not a single person bought a Japanese government bond because the government wasn't purchasing. The government is buying ALL and I mean ALL the bonds right now. They are printing as much money as the fed in an economy that is a third our size (~70 billion USD per month). They are going to double the monetary base in two years. This is clearly unsustainable and the yen is in for some serious devaluation in the very near term when people start running from JGBs.

Pitarou 12y ago
Is Kyle Bass standing over your shoulder? ;-) I think it's more like 25% of revenues, not 50%, but otherwise you're spot on. BTW, the bond futures market froze up last week, too. But what you're forgetting is that our friend crdoconner has no problem with the idea that the government can print money and then lend it to itself at whatever interest rate it chooses. (Either that, or he doesn't understand the difference between benchmark interest rates and government bond prices.)
- J_ 12y ago
  Hehe. I love Kyle. He's really good at explaining himself. I think you would have been right a couple years ago. Japan is projected to spend $257 billion on debt service this year. They bring in about $500 billion in revenues.
crdoconnor 12y ago
>>>Japan's currency will never inflate because it's always been that way Why are you quoting me? I NEVER said this. In fact, I said the OPPOSITE - inflation is already rising in Japan and it is likely to continue to rise. It's hyperinflation that I ruled out. >This is clearly unsustainable No it isn't. It's been said that it was unsustainable 20 years ago as I said above. This is why the ratings agencies IDIOTICALLY predicted Japanese default in 1997. Cue 20 more years of zero percent interest rates. They were a little bit wrong. It wasn't unsustainable then which is why it continued for 20 more years. And it's not now either.