Several weeks ago we alerted you to the burgeoning currency wars and the new age of desperation. If you recall, nations, in unison, are attempting to export their way to prosperity by killing their currencies. Unfortunately, if everyone’s doing it, the competitive advantage of cheap exports quickly disappears.
Still, it appears the world is heading down this path of insanity. In fact, last week brought forth new evidence that nations are preparing for the ultimate race to the bottom…
“Shinzo Abe, Japan’s prime minister, has used the phrase “regime change” to describe his hopes for a new mindset at the Bank of Japan (BoJ),” explains The Economist. “His wish may be granted sooner than expected. On February 5th Masaaki Shirakawa, the bank’s governor, announced his decision to step down almost three weeks early, on March 19th.”
Abe wants aggressive monetary easing (i.e. money printing) and a weak yen. He believes his economic policies, which are being called “Abenomics”, will boost exports and pull Japan’s economy out of a two decade slump. Will it work? Continue reading
