Meanwhile in Asia…

Nob Akimoto

Nob Akimoto

Nob Akimoto is a policy analyst and part-time dungeon master. When not talking endlessly about matters of public policy, he is a dungeon master on the NWN World of Avlis

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15 Responses

  1. Avatar Tom Van Dyke says:

    The Atlantic: ” The Japanese government needs to issue debt amounting to 59.1 percent of GDP; that is, for every $10 that Japan’s economy generates this year, the government will need to borrow $6.”

    Whoa.

    http://www.theatlantic.com/magazine/archive/2012/10/the-next-panic/309081/Report

    • Avatar Kolohe says:

      The difference is Japan holds most of that debt internally, which is actually one of the causes of their malaise, but by the same token makes cascading, catastrophic failure less likely. And Japan’s yield curve is still the lowest in the world (30 yr at less than 2%). (and the Yen is still at the high end of longterm trading pattern, at 79 to the dollar and 103 to the Euro. ‘par’ is about 25 yen higher for each)

      In other words, nobody in the world is pricing that there’s a problem, so I don’t think there’s a problem. Boom, markets.Report

      • Avatar Tom Van Dyke says:

        So as a senior Japanese saver, I owe myself my pension? Snake eats its tail.Report

      • Avatar Kim says:

        by that measure, the US debt isn’t a problem either.
        Do you see the markets pricing in the Carry Trade as a problem?Report

        • Avatar Kolohe says:

          And it isn’t in the short/medium term. (entitlements are another matter).

          Carry trade was a thing in the mid 00’s when the Yen was weirdly cheap (120 to the dollar) and the Euro was getting super strong. Don’t think it’s a thing now with most of the characteristics and directions reversed. (and money just about everywhere being super cheap with current lending rates).Report

          • Avatar Kim says:

            SS can be fixed by eliminating the interest deduction on second homes. Medicare is a different story (but hell, obamacare’s supposed to fixt hat).Report

  2. Avatar Will Truman says:

    I love these Asia posts. Keep them coming.Report

  3. Avatar Reformed Republican says:

    I wish our inflation in the US was only 1%.Report

    • Avatar Troublesome Frog says:

      Why?Report

      • Avatar Reformed Republican says:

        Because I would prefer having my money hold it’s value instead of being worth less and less over time.Report

        • Avatar Kim says:

          bu… bu… bu… what about JOBS! And GROWTH!

          More seriously, “not wanting your wealth to degrade over time” is why people buy assets like houses, which tend to inflate like the general US does, because people are generally willing to pay X% of income for houses.Report

          • Avatar Reformed Republican says:

            What about jobs and growth? Do employers no longer need workers when there is no inflation? If growth is only coming about because of inflation, it is illusory growth.

            And we see how well buying houses worked for people who bought earlier in the decade. That really helped them hold value. To me, a house is and always will be a consumer good if it is a residence. It is only an investment if it is being rented to tenants and generating income.Report

            • Avatar Kim says:

              That’s arse backwards. A house is an asset that appreciates at roughly the same speed as inflation. Makes a great inflation hedge, so long as you aren’t a blasted idiot and buy in the middle of a bubble (and housing is the bubble of last resort).

              Know a friend of a friend who got rich buying in the past decade. He sold at the top, and promptly rented.Report

            • Avatar James Hanley says:

              Do employers no longer need workers when there is no inflation?

              If there is too little money chasing too few goods, it becomes more expensive to borrow to invest in the things that make jobs. Harder to borrow money to build a house (thus employing carpenters, masonry guys, electricians, roofers, etc.). Harder to borrow money to buy capital equipment. Harder to borrow money to buy that long-empty restaurant and make into a new family owned steak joint, etc.

              At the outside you risk deflation, which sounds good–shit becoming cheaper–until you realize that when folks understand there’s deflation they start delaying their purchases, because they can get it for less six months from now. Then suddenly we have a surplus of goods, warehouses are full, assembly line workers and sales clerks are laid off, and they buy fewer goods, etc. etc.

              We walk a fine line with inflation. Neither too much nor too little is desirable.Report