11.12.08

Japan & its politicians

Within the Developed World, politicians will intend to say whatever is needed in order to show a positive feedback. Usually, it does not matter the truth in their words.

Curiously, when related to economy, they (include here Central Bankers) say what they think it is good for people to believe. Again the truth is not important.

While in some countries, their Governments try to "shrink" the crisis, in Japan, they are doing the opposite. There is always someone saying that they are in an awful position, growth is going to be much worse in future years, they are going to stay in recession until 2011, etc... Why?

They want to save currency reserves. They want to show the financial world that its economy is in a really bad moment, so that, yen, as a reflex of the economy, will go down. They are not doing a good job on this, though. It is true that they are in financial trouble, as everyone else, but they are not that bad. Its system is cleaner and they have more cash. As the interest rate differential with other countries is targeting to close to zero, the yen is starting to become a strong currency.

12/12/2008