Japan. The Yen. The Hyperinflation.

[Este Nuno]

Hyperinflation is not going to happen to the Yen. Period.

They can barely inflate it with their monetary policy.

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[myrkul]

They can barely inflate it with their monetary policy.

Policies can (and do, surprisingly often) change.

[Este Nuno]

They can barely inflate it with their monetary policy.

Policies can (and do, surprisingly often) change.

True, but it would take some unprecedented policy to even come close.

[myrkul]

They can barely inflate it with their monetary policy.

Policies can (and do, surprisingly often) change.

True, but it would take some unprecedented policy to even come close.

Hardly unprecedented.
www.businessinsider.com/10-hyperinflation-stories-of-the-20th-century-2011-3?op=1

[Este Nuno]

They can barely inflate it with their monetary policy.

Policies can (and do, surprisingly often) change.

True, but it would take some unprecedented policy to even come close.

Hardly unprecedented.
www.businessinsider.com/10-hyperinflation-stories-of-the-20th-century-2011-3?op=1

The measures that Japan would have to take being the 3rd largest economy in the world would be unprecedented. None of those examples compare to Japan.

[myrkul]

They can barely inflate it with their monetary policy.

Policies can (and do, surprisingly often) change.

True, but it would take some unprecedented policy to even come close.

Hardly unprecedented.
www.businessinsider.com/10-hyperinflation-stories-of-the-20th-century-2011-3?op=1

The measures that Japan would have to take being the 3rd largest economy in the world would be unprecedented. None of those examples compare to Japan.

1. Print money
2. Notice economy improve
3. Ignore "correlation ≠ causation"
4. Print more money

Which of those steps is unprecedented? Or is it just a matter of scale? If that's all you're saying, I agree. This has the potential to be the worst economic meltdown in history.

[Este Nuno]

They can barely inflate it with their monetary policy.

Policies can (and do, surprisingly often) change.

True, but it would take some unprecedented policy to even come close.

Hardly unprecedented.
www.businessinsider.com/10-hyperinflation-stories-of-the-20th-century-2011-3?op=1

The measures that Japan would have to take being the 3rd largest economy in the world would be unprecedented. None of those examples compare to Japan.

1. Print money
2. Notice economy improve
3. Ignore "correlation ≠ causation"
4. Print more money

Which of those steps is unprecedented? Or is it just a matter of scale? If that's all you're saying, I agree. This has the potential to be the worst economic meltdown in history.

I just think there's a huge gap between them printing lots of money in order to inflate their currency and actually reaching hyperinflation. It's difficult for them to inflate the yen in general. The amount of yen that would need to be printed to reach hyperinflation would just be enormous.

[myrkul]

I just think there's a huge gap between them printing lots of money in order to inflate their currency and actually reaching hyperinflation. It's difficult for them to inflate the yen in general. The amount of yen that would need to be printed to reach hyperinflation would just be enormous.

That's kind of like saying a junkie with a high tolerance can't overdose because it would take too much of the drug.

[Hawker]

This whole conversation is too soon.  Economics is not a science - if it was we would not have had the crash in 2008. 

The Japanese are trying a Keynesian pump priming exercise after 20 years of being committed to low inflation and a strong yen.  It started in December and so far is a huge success.  But it will be at least 2 years before we know if it fixed the Japanese economy.  If in 2 years time they are still stuck in the zero lower bound trap, Keynes, Krugman and the like will be making excuses. 

But if it works, all our governments will be trying to inflate our economies the same way and the Keynesian school of economics will be as strong as it was in the 50s and 60s.

[fredtrader]

Keynesian economics is about balancing the short term fluctuations. In good times you deflate to cool down the economy if its moving too fast and in bad times you attempt to inflate to get currency moving around.

[townf]

Keynesian economics is about balancing the short term fluctuations. In good times you deflate to cool down the economy if its moving too fast and in bad times you attempt to inflate to get currency moving around.

This is called the "fleecing cycle"

[myrkul]

Keynesian economics is about balancing the short term fluctuations. In good times you deflate to cool down the economy if its moving too fast and in bad times you attempt to inflate to get currency moving around.

This is called the "fleecing cycle"

+1

[BitcoinAshley]

Keynesian economics is about balancing the short term fluctuations. In good times you deflate to cool down the economy if its moving too fast and in bad times you attempt to inflate to get currency moving around.

Yes, but neo-keynesian economics ignores the second part, "In good times you deflate to cool down..." Neo-keynesian economics are about balancing the short-term fluctuations, then noticing that your policies got your stock market buddies really rich with all the 0-interest money that got pumped into the S&P, then continuing the policies during and after the "good times," - or, having the good times never actually come, then make excuses as to why they never came, and continue with the failed Keynesian policies on and on until the inevitable happens.
What we are seeing now is not a Keynesian bubble it's a neo-keynesian bubble. Dow hitting all-time highs (not adjusted for inflation, of course) with no fundamentals behind it? Don't make me laugh at you again.

The fact that you are completely unaware of how inadequate the current inflation/etc calculations are is laughable. The fact that you are completely unaware of the alarming incidence of stealth inflation in food and consumer goods is equally laughable. What was said about NY strip to donkey meat is true except on a grand scale.

There is no conspiracy theory here, fred, dude. There are no green men from mars manipulating the inflation calculations so get those ideas out of your head. There are just men with failed policies trying to mask their failures with the "CPI" and other statistical embarrassments, and people like you essentially making the non-argument that "anything other than the official stats compiled by the good neo-keynesians is a conspiracy theory."

The Fed is talking about reducing quantitative easing, in very vague terms so as not to shock the markets. But there is no recovery and the printing (your beloved keynesian solution to short-term fluctuations) has not affected the unemployment rate which is its target. However they know that if they continue with no results, the end result will be worse than if they cut off the easy money.

[fredtrader]

Keynesian economics is about balancing the short term fluctuations. In good times you deflate to cool down the economy if its moving too fast and in bad times you attempt to inflate to get currency moving around.

Yes, but neo-keynesian economics ignores the second part, "In good times you deflate to cool down..." Neo-keynesian economics are about balancing the short-term fluctuations, then noticing that your policies got your stock market buddies really rich with all the 0-interest money that got pumped into the S&P, then continuing the policies during and after the "good times," - or, having the good times never actually come, then make excuses as to why they never came, and continue with the failed Keynesian policies on and on until the inevitable happens.
What we are seeing now is not a Keynesian bubble it's a neo-keynesian bubble. Dow hitting all-time highs (not adjusted for inflation, of course) with no fundamentals behind it? Don't make me laugh at you again.

The fact that you are completely unaware of how inadequate the current inflation/etc calculations are is laughable. The fact that you are completely unaware of the alarming incidence of stealth inflation in food and consumer goods is equally laughable. What was said about NY strip to donkey meat is true except on a grand scale.

There is no conspiracy theory here, fred, dude. There are no green men from mars manipulating the inflation calculations so get those ideas out of your head. There are just men with failed policies trying to mask their failures with the "CPI" and other statistical embarrassments, and people like you essentially making the non-argument that "anything other than the official stats compiled by the good neo-keynesians is a conspiracy theory."

The Fed is talking about reducing quantitative easing, in very vague terms so as not to shock the markets. But there is no recovery and the printing (your beloved keynesian solution to short-term fluctuations) has not affected the unemployment rate which is its target. However they know that if they continue with no results, the end result will be worse than if they cut off the easy money.

There are valid arguments that CPI may understate inflation, but not to the level claimed on that website that was posted. You can see that CPI tends to be lower than both RPI and the GDP deflator, but only by a couple tenths of a percentage on an annual basis, not by 5%+ as some are suggesting.

Central banks tend to follow monetary policy pretty well, they have successfully kept inflation at low levels both in good times and bad without involving itself too much in economic growth, monetary policy is generally not the problem.

Where Keynesian economics fail is on public spending, governments are supposed to run surpluses in good times, however due to pressure from voters they end up doing the opposite leaving no room for deficits during recessions.

People tend to forget that in most developed economics the central bank is independent of the government.

[townf]

The system has continuously degraded. It's a one way evolution that can't be reversed. It's an evolving, one way process.

The system degrades by way of bank bailouts. The major bailouts were FDR gold confiscate 1933 and repeg dollar per oz, Bretton Woods to make the dollar the world reserve currency instead of gold, Nixon abolishing gold standard totally 1971, and QE 2008 - 2???.

Each bailout has fundamentally changed the economic system and made it less of a "system". It's a joke now. There's not even rule of law. You could call the removal of "rule of law" for the financial elite the latest bailout.

You can't go back without chucking the whole thing and starting over at this point. The important thing to realize is that there is no more types of bailout available other than to let the system just burn up. As in, just arbitrarily print any amount of anything and call it "money". There is nothing left to do.

We are in new territory. We aren't in a place where you can apply any kind of phony, rosy, "this is how it's done to make all work like it's supposed to" mumbo jumbo. The moral hazard of the first bailout removed any kind of credible "this is how the system works" crap.

[townf]

You could say the first "bailout" was giving a cartel of giant private banks the exclusive monopoly of issuing money in 1913.

[Hawker]

The system has continuously degraded. It's a one way evolution that can't be reversed. It's an evolving, one way process.

....snip...

Yet life gets better and better.  Its almost as the system needed to be degraded in order for us to have a pleasant standard of living.

[myrkul]

People tend to forget that in most developed economics the central bank is independent of the government.

Interesting that "independent" now means "balls deep."

[notme]

Watch the Japanese Bond yields.  They are up 40% in the past week... if they continue to rise the extra interest due will suck up any extra capital that might lead to inflation.

[CurbsideProphet]

The biggest problem for Japan is demographics.  They sell more adult diapers than baby.  They are faced with a mountain of debt and a declining workforce, I don't see a way out and neither does Kyle Bass.  If you haven't listened to his talk, it's worthwhile.