Death Star Economics



Fixing Japan – a bucket list

Japan is all over the news today, trying to weaken its currency (or not), stimulate growth and create jobs. It’s ambitious, to say the least. But it’s also good news for Europe. After all, new PM Shinzo Abe is planning to weaken the Japanese yen by buying euro-denominated bonds from the ESM: to save Europe, the world and its currency. Unfortunately  the world moves faster than politics and while business executives had begged for a weaker currency, they now fret that the yen could fall too far. Abe also set a 2% inflation target alongside stability and prosperity for everyone, causing Japan’s pension funds, which hold the second largest pool of retirement assets in the world after the United States, to increase their gold holdings from JPY45bn to JPY100bn. And then there is this hint of an idea to eliminate the interest-rate floor for deposits at the Bank of Japan, something the ECB has done as well to try and incentivize lending. The final policy decisions will be announced at the Bank of Japan’s meeting on 21-22 January.

In the background, Eurozone unemployment has once again broken all records, while German and Finnish exports declined. Meanwhile, Spain announced that it would have to issue €215-230bn gross debt throughout the year, which is 7.5% more than accounted for in the November budget.

Norway’s Foreign Minister Mats Persson has called on the UK to reconsider its currently rather hostile relationship with the EU to save the City of London and influence European legislation. During a trip to Ireland, Persson pointed out that Norway, while swimming in oil money, only had very marginal influence in its status as a member of the EEA (European Economic Area). read article

Follwing yesterday’s mortgage crisis-related settlement charges, Bank of America has agreed to pay $11.6bn to state-backed Fannie Mae, the Federal National Mortgage Association, which was bailed out during the crisis. The settlement regards mortgage putbacks, those loans Fannie Mae wants BoA to buy back due to their questionable nature. read article

After the American SEC took the first step in fighting services providers in December, when it opened the investigation into potentially fraudulent behavior of the big auditing companies in China, Ernst&Young is now subject of an Washington-based inquiryAllegation say E&Y lobbied on behalf of its clientscompromising its independence in auditing said corporates. In 2004, E&Y was suspended from entertaining new client businesses with publicly traded companies for six months in response to violating independence rules. read article

So long.


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4 Responses

  1. princess1960 says:

    hello ..thank you for the analyses ..
    Japan –buybond’s europe ..(nothing for lose ) just for starting good for japan gv first and the same time helping Europe
    gold exchane yen (pension) i think they know the potential..and the important they trying to help inflation (for my opininon) are wrong ..because after this what next ?when for 30 y is in standart inflation 2% ….
    i think the regulation in banking system can help for better move in lower inflation (not gold) is not solution (just if this GV thinking for the moment not for futuro.
    BOA i think this bank is full in ”crehosi” i don’t know how can survive but my logic say thay all ..have make cordination btw and this is just one small case for upcase (you see we do something)

    unemployment for 2013 will be higher
    GER export was slow this is very normal for the situation Eu is 3 y ..continue.
    UK a very strong banking system
    they have right for veto to go out from EUZ (Norwey ) and others countries (are concern) because if UK go out the EUZ will saperation (for sure) becouse is strong suporting ..
    my opinion is for UK to go out to help himself from the wors comeing ps (one group create to be famose in musice and in begining they go well after this nothing work ) so what? they saperation AND who is talent who work hart they go front who no they change ”poria” is simple ..we dont neeed to be stick some were becouse this was our plan or something ells ..(i am sure you understand what i mean )..
    europ can not go front like this metology.
    enjoy your day because i do reading your article (and others too) ..
    long or short..thing’s are the same ”AND ” is not the system they or we follow but is the people who are in ”coriphy”


    I live in South East Asia, but I do visit Japan from time to time, primarily because it a steal, destination wise. The cloud of desperation hangs low in Japan. How much more they can take is anyone’s guess.

  3. desert voice says:

    I definitely oppose any interest being paid on national debts. Borrowing must be made much more compassionate. Greece is an example how borrowing can sink a nation. What I propose is that all interest on national borrowing be paid not oin dollars, but in equivalent money dollars called bluebacks. This is much more sensible, for it will allow poorer nations unlimitted borrowing that will not sink them! The banks can use the bluebacks for bartering goods and services! If my idea is accepted, the world ecomomy will rebound to unbelievable until now heights! It will be a Renaissance as this planet has never seem before!

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