Japan more than any other economy is a real danger to world stability

In my previous and recent post I gave detailed arguments on Japan’s liquidity flood injection danger to global world economy .Overwhelming liquidity is not the answer to Japan real economic problems .
You canot level demand by simply flooding money around .
To level collapsed demand versus offer you have to either deflate prices as quickly as possible or recompose demand by reducing private debt and increase purchase power which means stimulating investments in unsaturated areas of high added value ( High richness creation ventures and companies ) while favoring the secondary market of sovereign debt placement .
That the US may be doing roughly the same canot be a justification of Japan latest monetary move .
The US is a determining player in helping the exports of main world economies and its currency happens to be world’s economy reference currency .
The fact that Japan’s liquidity policy with a terrific effect in world currency balance has being accepted ,is probably due to the critical situation of japanese economy nearing total collapse but , unless measures are quickly adopted to keep hold of the consequences of such politics , we are going to enter a situation that will place world economy in an spiral of volatility impossible to control .
Investors have to understand that after this current crisis nothing will be the same and making significant returns will just be history .
The world has to start planning a different type of life with priority attention to middle class size and health as only that may guarantee survival of cars and other durables , food , dress …distribution and industrial investments .
The problem seems to be that current political leaders are not sufficiently competent to explain this to investors and implement the necessary fiscal and credit policies to make that come true .



Published in: on mayo 11, 2013 at 12:10 pm  Comments (1)  

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