We’ll stay on the theme of Japan for today. And we may even stay on a similar subject for tomorrow after we heard this quote, “All the signs look like we’re [the US] going to follow the Japanese scenario.”

But more on that – perhaps – tomorrow.

Until then, we had to laugh. Yesterday’s Wall Street Journal wrote, “Japan’s government offered a modest stimulus package Monday and the central bank took steps aimed at curbing the rising yen which – oops! – resulted in the

Japanese Yen

rising further. As you can see from the chart below:”

The mighty Yen

The mighty Yen

Source: Yahoo! Finance


To put things in perspective. To see just how, erm, successful the Japanese government and central bank have been in manipulating the

Japanese Yen

weaker, take a look at the longer term chart:

Yen bubble?

Yen bubble?

Source: Yahoo! Finance


During the past two years the

Japanese Yen

has strengthened by around 20% against the US dollar. Moving from 110 Yen to the dollar to just 85 Yen to the dollar today.

And if you look even further back the Yen has moved from over 130 Yen to the dollar just eight years ago.

As we’ve written a gazillion times before, it’s just not possible to minutely or massively manipulate the market. The market always wins and the manipulators always lose – eventually.

But barely a month goes by without the mainstream printing a story about how the Bank of Japan is going to intervene in the currency market or that the government will take measures to weaken the Yen.

Yet all the time the Yen keeps getting stronger and stronger.

And all the time we’re told that by the likes of Jesper Koll from JPMorgan Chase in today’s Australian Financial Review that “There is no magic bullet that will fight the spectre of deflation.”

It seems the mainstream may have forgotten that the reason there’s no magic bullet is because there’s no “spectre”.

As we wrote yesterday, deflation isn’t the baddie the mainstream economists and bankers would have you believe. It’s only portrayed as bad because deflation is the ultimate magic bullet that will kill off the over-leveraged and bankrupt Western system of banking.

For everyone else deflation is fine.

I mean, let’s take a look at some other numbers. Yesterday I showed you the Japanese consumer price index (CPI) that had “painfully” subjected the Japanese consumer to a 0.4% fall in prices over the last fifteen years.

In contrast Australian consumers had seen a 50% increase in prices. Seriously, which would you prefer? Come on, don’t tell me you’re happy paying 50% more for your groceries today than you did fifteen years ago…

But what about those other numbers? We’ve been told that Australia is a great and vibrant economy for having near full employment. That the unemployment rate is a miniscule 5.2%. Aren’t we good, and up yours to the United States with their 9.9% unemployment rate.

But what about our pals in Japan? You know, the economy that’s moribund, the economy that’s struggling against the “spectre of deflation”?

Erm, well, apparently, according to the Japanese Ministry of Internal Affairs and Communications, as of July 2010, the unemployment rate was a whopping… 5.2%: while the Japanese Yen gets stronger

Source Money Morning Australia