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teacher4life
Joined: 22 Apr 2012
Posts: 121
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 Posted: Tue Feb 05, 2013 11:57 pm Post subject: yen facing collapse? |
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| Not a pretty picture lately! |
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stumptowny
Joined: 29 May 2011
Posts: 310
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| Posted: Wed Feb 06, 2013 2:05 am Post subject: |
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did you see the "the yen is doomed" topic?
scroll down... |
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rxk22
Joined: 19 May 2010
Posts: 1629
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| Posted: Thu Feb 07, 2013 1:12 am Post subject: |
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The recent historical yen to dollar rate was a bit over 100� to $1, please stop the chicken little act.
Thank you |
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timothypfox
Joined: 20 Feb 2008
Posts: 492
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| Posted: Thu Feb 07, 2013 1:59 am Post subject: |
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In the international economy, currencies and economies and increasingly tied to one another and so it would not be in anyone's interest to see the yen collapse as such.
The yen in fact has gone down in value primarily because Abe's government deliberately tinkered with the Japanese bank rate to increase exports. A lower yen means cheaper Japanese goods and overall more business for Japanese companies. Better for the Japanese stock markets.
The secondary causes of a deflated yen might concern issues over a collapsing youth demographic and resulting shrinking tax base compounding into to higher and higher internal debt levels. Also, there is been a slow decline profits by major corporations. We will have to wait and see if these issues over time trumps bank rate tinkering.
Umm... love to hear from someone who knows more about this. Any economists out there who can discuss this beyond what they've read in the news? |
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Pitarou
Joined: 16 Nov 2009
Posts: 1116
Location: Narita, Japan
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| Posted: Thu Feb 07, 2013 2:50 am Post subject: |
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| timothypfox wrote: |
| Any economists out there who can discuss this beyond what they've read in the news? |
This is a typical case of people reacting strongly to short term fluctuations, and missing the bigger picture. This plot should give you a little more perspective. If you can find a graph that goes back 50 years, rather than just 10, you'll be even more unimpressed by recent fluctuations. |
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qwertyu2
Joined: 13 Mar 2012
Posts: 93
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| Posted: Thu Feb 07, 2013 3:29 am Post subject: |
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| timothypfox wrote: |
| Umm... love to hear from someone who knows more about this. Any economists out there who can discuss this beyond what they've read in the news? |
I don't claim to be an expert, but I don't see how Japan deals with its debt without printing like crazy or defaulting. |
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Pitarou
Joined: 16 Nov 2009
Posts: 1116
Location: Narita, Japan
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| Posted: Thu Feb 07, 2013 3:55 am Post subject: |
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| qwertyu2 wrote: |
| timothypfox wrote: |
| Umm... love to hear from someone who knows more about this. Any economists out there who can discuss this beyond what they've read in the news? |
I don't claim to be an expert, but I don't see how Japan deals with its debt without printing like crazy or defaulting. |
By devaluing its currency. |
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fat_chris
Joined: 10 Sep 2003
Posts: 3198
Location: Beijing
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| Posted: Thu Feb 07, 2013 7:39 am Post subject: |
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| rxk22 wrote: |
| The recent historical yen to dollar rate was a bit over 100� to $1, please stop the chicken little act. |
I agree with the above quote. The dollar is around 94 yen at the moment? 93.56 yen? No need for panic here.
When I arrived in Japan on Sunday, July 29, 2007, the dollar was pegged at 118.56 yen. Five years later when I left on Thursday, August 2, 2012, the dollar was pegged at 78.16 yen. That worked out well for sending money back to the US.
I am visiting Japan next week. For me the current rate works out. OTOH, I know it can suck though if one lives in Japan and is sending money overseas at the moment.
http://forexblog.oanda.com/20130206/a-yen-for-your-thoughts/
I like this website because one can check what the exchange rate has been in the past: http://www.oanda.com/currency/converter/
Sorry for the diversion.
Warm regards,
fat_chris |
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Apsara
Joined: 20 Sep 2005
Posts: 2142
Location: Tokyo, Japan
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| Posted: Thu Feb 07, 2013 11:14 am Post subject: |
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| The yen has been through this value on the way up or down I think three times now since I first arrived in Japan in 1995. Pretty sure that at least half of the time I have been here it has been over 100 yen to the USD. I don't see why there's any reason to panic this time, or is something different? |
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qwertyu2
Joined: 13 Mar 2012
Posts: 93
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| Posted: Thu Feb 07, 2013 12:58 pm Post subject: |
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| Pitarou wrote: |
| qwertyu2 wrote: |
| I don't claim to be an expert, but I don't see how Japan deals with its debt without printing like crazy or defaulting. |
By devaluing its currency. |
Yes, that's what I meant by "printing like crazy." It is the printing which devalues the yen.
| Apsara wrote: |
| I don't see why there's any reason to panic this time, or is something different? |
The first worry is the risk of serious inflation. The second is that the government may bungle things and trigger an increase in bond rates on an unmanageable amount of debt. |
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Pitarou
Joined: 16 Nov 2009
Posts: 1116
Location: Narita, Japan
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| Posted: Fri Feb 08, 2013 4:15 am Post subject: |
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| qwertyu2 wrote: |
| Pitarou wrote: |
| qwertyu2 wrote: |
| I don't claim to be an expert, but I don't see how Japan deals with its debt without printing like crazy or defaulting. |
By devaluing its currency. |
Yes, that's what I meant by "printing like crazy." It is the printing which devalues the yen. |
In the language of economics they are not the same thing.
"printing like crazy" is called seigneurage, and leads to currency depreciation. Devaluation happens when the government changes the currency's value by direct administrative fiat. (And, since it's bound to come up, quantitative easing is, arguably, a less "obvious" form of seigneurage.) |
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Pitarou
Joined: 16 Nov 2009
Posts: 1116
Location: Narita, Japan
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| Posted: Fri Feb 08, 2013 4:30 am Post subject: |
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| Apsara wrote: |
| The yen has been through this value on the way up or down I think three times now since I first arrived in Japan in 1995. Pretty sure that at least half of the time I have been here it has been over 100 yen to the USD. I don't see why there's any reason to panic this time, or is something different? |
You're absolutely right that these short-term fluctuations are a storm in a teacup. I had to chuckle at fat_chris's exchange rate history link -- it only goes back five years!
However, the long term trends are extremely disturbing. For now, government debt is sustained by Japan's high savings rate and relatively primitive investment market. So, for example, if you have a Japanese savings account, your bank probably used a large chunk of the cash you put in there to buy government bonds. But Japan is ageing fast, and as people retire they withdraw their savings.
Still, there's a long way to go before the shit hits the fan. For example, Japan inc. has a boatload of US Treasure Bills. |
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teacher4life
Joined: 22 Apr 2012
Posts: 121
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| Posted: Fri Feb 08, 2013 5:36 am Post subject: |
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This time it's different. The next phase of the global economic crisis is the global currency wars, which will eventually lead to major global military wars.
Russia, Europe, China, USA, Japan, the Middle East and South America all scrambled in a crazy state of alliances/treaties which will be broken as often as respected.
Get the hell out of Japan and learn how to grow your own food ASAP. |
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fat_chris
Joined: 10 Sep 2003
Posts: 3198
Location: Beijing
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| Posted: Fri Feb 08, 2013 6:44 am Post subject: |
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| Pitarou wrote: |
| I had to chuckle at fat_chris's exchange rate history link -- it only goes back five years! |
Haha. Yeah, those are the only five years that I personally know regarding the USD-JPY exchange rate.
Hmm, all of this is making me think that perhaps I don't want to return to Japan to work. 
Time will tell.
Warm regards,
fat_chris |
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Pitarou
Joined: 16 Nov 2009
Posts: 1116
Location: Narita, Japan
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| Posted: Fri Feb 08, 2013 7:22 am Post subject: |
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| teacher4life wrote: |
| Russia, Europe, China, USA, Japan, the Middle East and South America all scrambled in a crazy state of alliances/treaties which will be broken as often as respected. |
And how is this different? |
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