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Japan's ZIRP and its effects (or lack thereof) - Japan Series 2
2011 Jan 25, 10:13am 2,273 views 19 comments
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2011 Jan 29, 1:47pm
If you think someone making $1250 a month is going to spend most of their salary to buy a flat screen
my point is that 1.2 billion people are going to be getting 33% raises this decade as the yuan moves from 6 to 4.
They will be getting 33% more stuff for their money. The TV they do buy will be 33% bigger. They'll be burning 33% more gas than they do now. They'll be going to KFC 33% more often.
Zero summers constantly misjudge these changes.
Get back to me when oil is $500/bbl.
They will be getting 33% more stuff for their money. The TV they do buy will be 33% bigger. They’ll be burning 33% more gas than they do now. They’ll be going to KFC 33% more often
Yes, and they still won't be able to afford to buy the things that they are exporting.
Get back to me when oil is $500/bbl.
There's a pretty good chance that it'll never happen in inflation-adjusted terms, so sure. Demand for oil in the US has peaked, and it's pretty close to peaking in China. Current trends in technology just about guarantee that demand for oil in 50 years will be less than they are today.
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It is interesting to hear the reasons the BOJ (Bank of Japan) give to extend this policy which has been in effect since 2001. How long will it continue?
http://seekingalpha.com/article/228526-zirp-failed-in-japan-so-they-re-doing-it-again
http://web.mit.edu/krugman/www/bpea_jp.pdf
http://en.wikipedia.org/wiki/Zero_interest_rate_policy