{"id":6315,"date":"2015-03-08T08:54:23","date_gmt":"2015-03-08T13:54:23","guid":{"rendered":"http:\/\/olduvai.ca\/?p=6315"},"modified":"2015-03-08T08:54:23","modified_gmt":"2015-03-08T13:54:23","slug":"why-japan-is-not-greece-or-eu-for-that-matter","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=6315","title":{"rendered":"Why Japan is Not Greece or EU For that Matter"},"content":{"rendered":"

Why Japan is Not Greece or EU For that Matter<\/a><\/h3>\n

QUESTION:<\/strong>\u00a0Hello Martin
\nThere are a few writers who speculate the the yen will be the first currency to fall (because Japan has been tied into QE and flat interest rates for decades already, and their manufacturing is suffering).\u00a0 How do you think the currency situation will play out for Japan?<\/p>\n

thank you,\u00a0best wishes
\nM<\/p>\n

ANSWER<\/strong>: This is the classic example of people who keep touting fiat and money supply as if it was the beginning and end to everything. I have stated that\u00a0ALL<\/strong>\u00a0money is fiat even when a government fixes the price of gold for they are dictating its value. The floating exchange rate has its advantages. It is truly the check against government for money is simply the expression of confidence in the total productivity of a nation. It is not gold \u2013 it is the people.<\/p>\n

Japan rose to the 2nd largest economy with a tiny island, no gold, and no resources. It did so proving Adam Smith was correct based upon the total productivity of its people. Inflation does not correlate to money supply. If it did, thenALL<\/strong>\u00a0commodities would be higher today. Inflation is a matter of confidence and as long as people know someone else will freely accept whatever money might be at that moment, then they will accept it as well. Disturb that confidence and you get inflation all the way up the scale to hyperinflation, which also involves the collapse in confidence in banks and people spending everything as fast as they get it \u2013 the opposite of deflationary hoarding.<\/p>\n

Interest Rates are also a reflection of\u00a0INFLATION<\/strong>. You would never lend money with a rate of return\u00a0BELOW<\/strong>\u00a0the purchasing power of money at the time you expect a return. Therefore, rates have been flat in Japan because of the massive deflation that is also the hallmark of hoarding (savings).<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Why Japan is Not Greece or EU For that Matter QUESTION:\u00a0Hello Martin There are a few writers who speculate the the yen will be the first currency to fall (because Japan has been tied into QE and flat interest rates for decades already, and their manufacturing is suffering).\u00a0 How do you think the currency situation […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[951,202,279,284,309,3918,374,379,1167,426,431,452,536],"class_list":["post-6315","post","type-post","status-publish","format-standard","hentry","category-economics","tag-currency","tag-deflation","tag-eu","tag-european-union","tag-fiat-currency","tag-fiat-money","tag-gold","tag-government","tag-greece","tag-inflation","tag-interest-rates","tag-japan","tag-money"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/6315","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6315"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/6315\/revisions"}],"predecessor-version":[{"id":6316,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/6315\/revisions\/6316"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6315"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6315"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6315"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}