politics

BOJ makes contingency plans for Brexit; sees dollar squeeze, yen spike as risks

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By Leika Kihara

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“In the end, this is not something Japanese policies can influence,” said a third official. “There is not much the BOJ can do besides brainstorming to prepare for the worst.”

meaning "stimulus" is not an option at the moment ?!

0 ( +0 / -0 )

There is a TV series called "House of Cards". But rather than being about a corrupt American president, it should be about the current economies created by central banks and government policies.

We keep hearing about how our governments have saved us from the "Great Recession", but from the lack of growth since 2008, and the quadrupling of national debts incurred to give us that lack of growth, it appears as though the worst is yet to come.

And this time we cannot blame banks or corporations for the crash. Mr Obama is leaving office at a good time, I hate to be the person who is sitting in the white house, or in the leader's seat of any developed country when this house of cards collapses.

“There is not much the BOJ can do besides brainstorming to prepare for the worst.”

I wonder how they will prepare? Brainstorming only works if the people involved have brains, which are scarce in central bank committees. They can't make rates more negative, they can't really print more than they are printing, they have already spent our children and grandchildren's tax revenue. The "worst" is of course going to be a collapse of the national currency, and possibly a return to a money-based (backed by gold) system.

4 ( +4 / -0 )

things would have been a lot worse if governments had not stepped up and spent like crazy.

Worse in the short term probably, which is equivalent to "worse" for governments especially, but in the mid-to-longer term having a good clean out of the crap in the system could have left us all (except the politicians) in a far better place by now, 7-8 years later.

when the hyperinflation was countered by money tightening and deflation, the support for the Nazis dramatically increased.

Oh. So the lesson from history is to embrace hyperinflation, huh.

3 ( +3 / -0 )

Lol, moderate hyperinflation, I like that :)

2 ( +2 / -0 )

I got my wheelbarrow ready for the supermarket trip!

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@sangetsu03, things would have been a lot worse if governments had not stepped up and spent like crazy.

Things might have been worse in the short term. But in return for a little short-term relief, we are in for much greater problems in the future.

If you yourself had financial problems, like losing your job, or getting a cut in salary, what would you do? Likely you would spend less, tighten your belt, and find another job, or live more modestly until your salary was raised again. The government's massive spending in 2008 and 2009 would be like your maxing out your credit cards to maintain your lifestyle with no job or a lower salary. You might indeed continue to live well for a little while, but eventually those debts you incurred must be repaid. And if you were lucky to get a job, or a better salary, it might not make any difference, especially if you spent much more than your new job or restored salary can pay off.

The problem is that governments refuse to apply the same limits of responsibility and common sense they expect us taxpayers to live by. But it is easy to spend recklessly and without thought when the money is not theirs.

1 ( +1 / -0 )

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