The Motley Fool Discussion Boards
Investing/Strategies / Bonds & Fixed Income Investments
|Subject: Re: Japan to end interference||Date: 3/29/2004 6:31 AM|
|Author: splotto||Number: 9761 of 36082|
Japan, like the US, is in a bind. It can't really keep US interest rates artifically low and dollar high indefinitely, but if it stops, US interest rates go up and import prices go up (and inflation in US), squashing Japan's export economy, not to mention US economy, as higher interest rates destroy housing market, etc.
As your pessimist gurus say, at some point the piper must get paid. I'm still not really sure whether it's deflation or inflation or stagflation or stagdeflation (courtesy Kent), but in some way US consumers will not be able to live as high off the hog on borrowed time and money.
Rather then spend all that money debasing the Yen to try to keep exports going, Japan would have done better over the last 2 years to spend the money by giving everyone in Japan certificates for free Japanese made goods. They would have had the same effect.
Also, the US$ has a LONG way to fall before our products could compete here with those from Japan. I think Americans would have been a little fed up with $4 gas long before the Japanese goods surpassed ours in price.
|Copyright 1996-2017 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us|