Sunday, March 27, 2011
SOS What happen to Yen since 1989?
One must be wondering what happen to the Japanese Yen since the 1989 crash. It depreciates at the initial stage of bust in 1989, and then over the next 5 years, it actually appreciates from about 150 to about 80, rebounded to 130 and up to today 2011 March, it is about 82. Over the entire crash, about 21 years, yen has appreciated from 150 to 80 per US Dollar even with the public debt increase up to 2 times the GDP. Who could have thought that? Does that mean, printing money will eventually makes the yen worthless? Will US dollar facing the same problem, so far, not. Or not yet? Perhaps, USA is more resilient. Who would have tought, with a same Yen today held from 1989, a Japanese can buy twice as much as Nikkei which drop from 1989 to 2011, from 39000 to 9000. MyView It may be worth studying what was faced by Japan against USA today. Both are going through immense bubble (different intensity) burst, and also post bubble stimulus. Funnily, up to today, USA is doing better than Japan. Japan bubble created from 1985 to 1989, stock market tripled. Property also tripled. The only difference, Japan export was good during the post bubble. The trillion dollar question, can the credit deflation makes the stimulus look like a drop of blood in the ocean, and the deflation wave would wipe the stocks and property markets. Only time will tell.
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