In economic circles, there has been a lot of buzz about Quantitative Easing of late. Basically, the U.S. Federal Reserve has lowered interest rates to near zero percent and the fear is that these cuts will not have enough effect on the willingness to lend in order to reflate the U.S. economy. Therefore, the Fed has decided to take more draconian measures, one of which is Quantitative Easing, flooding the economy with money.

Recently, deficit hawks have been pushing a nefarious line of argument that I need to debunk right here and right now. The line goes as follows: we need to spend government monies now to get the economy back on its feet. In a couple of years, we can signal all clear and then raise taxes on the middle class in order to reduce the deficit again, much as we did in 1993.

Just as Japan is starting to unwind its carry trade, a new one might be forming in the form of 1% base rates in the United States. The carry trade was very popular amongst Japanese retail investors, especially using leverage (see article – hat tip Yves Smith). But, this trade unwound in a [...]

Of the major currencies, the Japanese Yen has been the strongest in the last few months, while the Australian Dollar has been the weakest. These two currencies have also been the most conspicuous in the Japanese carry trade. That trade is now coming unstuck, precipitating changes of epic proportions.
For those of you who [...]

Although off its highs for the day, the Japanese Yen is still looking very strong against every major currency. Earlier, it pushed as high as 92 yen to the dollar. Jim Rogers was on Bloomberg saying it was headed much higher.

This does not bode well.
Japan’s Nikkei stock average slid more than 8% on Friday after U.S. stocks plummeted on fears about a global recession, while a firm yen added to the pain.
In early trade, the benchmark Nikkei had shed 673.72 points to 8483.77.-Sydney Morning Herald
Also see: Asian stocks hit after Dow plunge [...]

The Wall Street Journal has a good piece from Yuka Hayashi about lessons that can be learned from Japan’s experiences with its bank crisis in the 1990s. While I do take issue with a number of the article’s assertions, on the whole it sheds light on what Japan did in order to shore up its [...]

At the peak of the global housing bubble in 2006, I came across a post about the Japanese bubble that left a big impression on me.
As we collectively attempt to call the bottom of the housing bubble, many are cautiously wading back into markets that have seen 20-30% corrections in house prices. This brought [...]

Most Americans would have you believe that the U.S. Federal Reserve was entirely responsible for the monetary conditions which created the mother of all stock market bubbles after the LTCM bailout. Yes, the Fed was complicit in the extraordinary rise of technology in the late 1990s. However, it was the Bank of Japan [...]

We bailed out Bear Stearns. We have effectively said we are bailing out Fannie and Freddie. Who’s next? All of this is only going to increase U.S. Government debt.
Is this where we’re headed? Note the last part in red:
From 2002:
Japan’s credit rating could be lowered again soon because the country is [...]