The Bank of Japan is throwing its currency under the bus to save the bond market:
The Bank of Japan kept up its relentless quest to defend a key yield cap by offering to buy unlimited amounts of 10-year government bonds on Tuesday, underscoring its resolve to keep policy ultra-loose and putting downward pressure on the yen.
The Japanese yen has lost 10% of its value in the past two months and goes into freefall. It’s being dumped in favour of currencies like the US dollars.
I have been watching a very cute Japanese TV series, recently picked up by Netflix, called “Old Enough.” This series follows very young children, ages 2-4, as they run errands ALONE, requiring them to carry burdens as they navigate through their neighborhoods, sometimes more than 1 km and even up long hills and flights of stairs.
The episode I watched yesterday showed a 3 year old girl tasked with carrying her fisherman father’s lunch to him at the harbor, about 0.5 km from home. Her father then gave her 3 fish he had just caught, placed in a small foam cooler. The father had gone to the hardware store previously to buy a hand cart for about 2,500 yen. At 90 yen to the dollar, that’s about $22.50. The toddler pulled the hand cart to a nearby fish market to get ice, then uphill to get home, then up the stairs to get inside.
These Japanese kids show that youngsters are quite capable if given high expectations. They are protected along the way by the hidden camera crew, but they really do their tasks all by themselves. And the Japanese public is very kind so the kids aren’t in any danger.
I was planning to look up the value of the yen to see how much the hand cart cost, and was shocked to see the sudden fall. When the Federal Reserve is raising rates and the BOJ is cutting rates, the yen is bound to drop.
Wendy: youngsters are quite capable if given high expectations.
My family were farmers.
I had a pony, and at about 5-6 years old, my dad would be farming the “back forty”… about 1 mile away, across fields and an ephemeral creek.
I was given his lunch and a quart jar with ice and water, to take to him, riding my horse. I clearly remember taking specific care of the ice water. It was wrapped in an old towel, and tied to the saddle horn.
We would sit under a tree on the turn row, eat lunch and drink ice water.
I treasured that mission. I got to ride my horse and do some thing USEFUL for my dad.
Even at 5 or 6, I knew I was doing something that helped my family. I wasn’t just playing.
These Japanese kids show that youngsters are quite capable if given high expectations. They are protected along the way by the hidden camera crew, but they really do their tasks all by themselves. And the Japanese public is very kind so the kids aren’t in any danger.
Wendy
Hope this isn’t too OT, but our personal Japanese story:
Twenty five years ago, fly into Narita Japan, shuttle to hotel in Tokyo. DW discovers she has left her expensive 3/4 length coat back at Narita customs, abandoned in all the chaos in the process of clearing thru customs.
We call the hotel front desk, describe our problem, then depart for our first afternoon of business in Tokyo.
Late afternoon, returning to our hotel room, THERE IS THE COAT. Cleaned and neatly folded in a basket, sitting on the bed.
Only in Japan. Their integrity is complete. Grateful and dumbfounded doesn’t say it.
Perhaps children who are brought up to be conscientious, responsible and hardworking from the time they are toddlers grow up to be conscientious, responsible, hardworking adults?
The Japanese yen has lost 10% of its value in the past two months and goes into freefall. It’s being dumped in favour of currencies like the US dollars.
But just last week you told us that the US Dollar is going the way of Zimbabwe. So which is it?
Perhaps children who are brought up to be conscientious, responsible and hardworking from the time they are toddlers grow up to be conscientious, responsible, hardworking adults?
Ayup!
My sister has a slew of kids and has them well organized.
Example: When one kid is ‘promoted’ to a household chore of greater responsibility s/he is responsible for teaching the job to his/her replacement.
Divitias: Gold is money. Everything else is credit. (J P Morgan’s statement to Congress in 1912)
Gold is solid, but:
You take physical possession of bullion: You have secure storage issues. There are assay fees, sometimes both ways, taking possession and disposing.
You invest with a solid entity that holds ‘your’ gold: They issue you a statement. (Monthly?) Showing ‘your’ holdings. I have been advised that those statements may have as many as 3 or 4 people that are attached to each of those Au ounces. Works fine as long as everyone doesn’t want ‘their’ gold, all at once. Like might happen in a time of intense turmoil, when over half might be told “sorry”.
Gold coins might help. Still have the storage issue.
All fiat currencies are going the same way - the US dollar is the least dirty shirt in the laundery at the moment. I’m still buying buying gold which is money not credit:
So if I understand the “least dirty shirt” is still the “best shirt”. In order for it to become worthless, every other shirt - and it - will have to go to zero. Is that the theory?
And if every shirt goes to zero and only gold is left, then we will trade gold for groceries? Gold for cars? Gold for energy? How will that work, given that most gold is held in giant heavy ingots, and what isn’t is in gold coins of usually high denomination. How will anyone make change? Or do we have to buy 429 loaves of bread at a time?
Gold is money. Everything else is credit. JP Morgan in 1912
I wonder if JP Morgan sat on a pile of gold in his basement, or do you think he used fiat money, bank accounts, checks, and all the norms of society, all the while convincing gullible people that those things were somehow tainted?
And if every shirt goes to zero and only gold is left, then we will trade gold for groceries? Gold for cars? Gold for energy? How will that work, given that most gold is held in giant heavy ingots, and what isn’t is in gold coins of usually high denomination. How will anyone make change? Or do we have to buy 429 loaves of bread at a time?
Though I hesitate to reply to you when you are on a tear, my understanding is that theoretically with gold being soft you shave off a bit for payment. Scales of course would be used to instill a measure of fairness. Of course no real way to know what the quality of the gold is. I suspect there would be bartering of goods and services, accounts for shopping based on over payment.
I confess, I can’t even stand using cash, and would prefer having a chip in my thumb that allows me to pay for things electronically, (yes, exaggerating a bit,) so I don’t see myself going the gold route. Honestly this all seems more than a bit the wanderings of a mind that doesn’t have enough real worries to ponder, but at the same time we hold on to our cabin that could be used for homesteading if something outrageous happened.
If I can get just a bit of inside information on where your gold is located, I can take it from you in just a minute or two. With a bit of planning, of course.
Though I hesitate to reply to you when you are on a tear, my understanding is that theoretically with gold being soft you shave off a bit for payment. Scales of course would be used to instill a measure of fairness. Of course no real way to know what the quality of the gold is. I suspect there would be bartering of goods and services, accounts for shopping based on over payment.
Historically people used tokens or tally sticks that represented the value of a gold or silver coin. For example, centuries after the Roman Empire left northern Europe transactions were still denominated in denari even though the coins had stopped circulating. Similarly for centuries in England there was a general currency shortage and so merchants and farmers would issue leather or tin tokens that could be redeemed with that merchant. The tokens would then circulate just like regular money through the village.
