As I famous yesterday, Japan has unleashed the subsequent wave of inflation.
By fast approach of evaluation:
1) Japan’s central financial institution, the Financial institution of Japan or BoJ, is the one main central financial institution that’s nonetheless easing financial situations: each the Fed and the European Central Financial institution (ECB) are tightening financial situations.
2) On account of this differential in coverage, Japan’s foreign money, the Yen has hit a 24-year low relative to the $USD.
3) Japan imports virtually all its vitality and meals wants. On account of this foreign money collapse, meals and vitality costs in Japan are skyrocketing.
So final week, the BoJ determined to take issues into its personal palms… and intervene straight within the foreign money markets. That is an precise gamechanger.
Why?
As a result of Japan is now EXPORTING inflation to the U.S. and Europe. How lengthy do you suppose the U.S. and Europe will tolerate this?
And so… we have now entered the foreign money wars, a time wherein main nations use financial coverage as a weapon to defend their very own currencies towards others.
All of that is HIGHLY inflation.
Take into account the U.S.. If inflation hit a 40 12 months excessive at a time when the $USD was doing this:
What do you suppose occurs to inflation when the $USD rolls over because of Japan propping up the Yen?
