Comments on: Is Japan next on the road to quantitative easing? http://www.creditwritedowns.com/2009/01/is-japan-next-on-the-road-to-quantitative-easing.html Finance, Economics and Markets Fri, 10 Feb 2012 00:37:00 +0000 hourly 1 By: mL http://www.creditwritedowns.com/2009/01/is-japan-next-on-the-road-to-quantitative-easing.html#comment-2622 mL Sat, 17 Jan 2009 12:37:05 +0000 http://www.creditwritedowns.com/?p=4826#comment-2622 1. a. After yen are up more than 90, a lot of dirt will appear. I expect many hedge funds bet yen could have gone up than 90. b. Yen will still go up to 70. (I believe) 2. China will not depreciate rmb at least not much. Reasons: a. depreciate rmb won't increase china's export competitiveness. It is the buyers lack of money to spend not because of china's product prices lack of competitiveness. b. if rmb depreciates too much, hot money will flee from china, which will hurt china economy more. However, China will be the protectionists primary target anyway. 3. The speed of increase in M2 is not too much faster. It is the circulation speed slows down. Multiplier smaller. 3b. We are going to see deflation, strong deflation. Ed, forget about inflation before the idea of inflation poisons your mind. mL 1. a. After yen are up more than 90, a lot of dirt will appear. I expect many hedge funds bet yen could have gone up than 90.
b. Yen will still go up to 70. (I believe)

2. China will not depreciate rmb at least not much.
Reasons: a. depreciate rmb won't increase china's export competitiveness. It is the buyers lack of money to spend not because of china's product prices lack of competitiveness.
b. if rmb depreciates too much, hot money will flee from china, which will hurt china economy more.
However, China will be the protectionists primary target anyway.

3. The speed of increase in M2 is not too much faster. It is the circulation speed slows down. Multiplier smaller.
3b. We are going to see deflation, strong deflation. Ed, forget about inflation before the idea of inflation poisons your mind.

mL

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