Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Bank of Japan, in a Surprise, Adopts Negative Interest Rate

nytimes.com

Post reply on HN
Print view View original

61–70 of 250 posts

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#61

Post by cbowal »

chillydawg wrote: post #10
wrong_variable wrote: post #3

I do not understand this. Japan imports almost all of its oil and commodities. Shouldn't low price of oil and commodities result in a massive surplus for a country that sells high value added goods ? Buy iron for cheap and sell robots for a high price. Now the argument many people will make is that the people who are buying the high-value added goods won't have money anymore - but the argument can be made in the oppo…

Stable prices with a gentle growth are better for everyone. It's not important if oil is cheap or expensive in the long run, what matters is that you can make sensible forecasts and do long range planning without having to worry about one of your main inputs wildly fluctuating in price and causing havoc across the board.

No everyone - there's a lot of money to be made from volatile price swings.

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#62

Post by green7ea »

akerro wrote: post #48
singham wrote: post #43

Earlier quoted context omitted.

Most likely cheap oil is put Russia in place.

, Norway, Turkey and ISIS.

Honest question: why Norway? I thought it was more about Russia, Iran, Venezuela, ISIS and that Norway was simply collateral.

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#63

Post by hackerboos »

Cthulhu_ wrote: post #56
dzdt wrote: post #44

The backstory here is demographics. Japan has a shrinking, aging population and almost no immigration. With fewer people there are naturally less things bought, sold, and produced. Japanese authorities have been trying to pump the economy by deficit spending (central government borrows money and spends it), quantitative easing (central bank buys long term private debt, increasing the money supply for short term spend…

Wouldn't it be acceptable to just accept a shrinking economy and change policies in such a way to deal with it? i.e. shrink the police and armed forces, public services, cut needless spending, etc. Become more frugal as economy allows.

The key phrase here was 'aging population'. If the majority of Japan's population are retired then there will still be a huge deficit.

Japan needs to bite the bullet and accept immigration as part of its economic strategy.

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#64

Post by EGreg »

Instead of pushing people to reinvest into the economy, there is a more sustainable way:

1. R&D AND ROBOTS

2. TAX AUTOMATION

3. BASIC INCOME FOR ALL, growing as tax revenues grow

This will let a shrinking population be more productive and align the resources more usefully for everyone - including old people - to spend on their needs.

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#65

Post by marcosdumay »

wrong_variable wrote: post #3

I do not understand this. Japan imports almost all of its oil and commodities. Shouldn't low price of oil and commodities result in a massive surplus for a country that sells high value added goods ? Buy iron for cheap and sell robots for a high price. Now the argument many people will make is that the people who are buying the high-value added goods won't have money anymore - but the argument can be made in the oppo…

People don't want to use the phrase "worldwide depression", so they call it by another phenomenon that is highly correlated to it: low oil price.

Just substitute them. Economists are not this bad.

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#66

Post by marcosdumay »

narrator wrote: post #18

This is going to be great for the U.S economy: http://useconomy.about.com/od/glossary/g/yen_carry_trade.htm > Definition: The yen carry trade is when investors borrow yen at a low interest rate. They exchange it for U.S. dollars or any currency in a country that pays a high interest rate on its bonds. They receive a low-risk profit when they receive high interest on the money invested, but pay low interest on the mon…

Normally, sudden financial movements are bad for all involved parties.

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#67

Post by woodpanel »

Maybe OT:

Isn't this just proof that Japan needs to let go of it's biggest barrier to growth? By which I mean it's non-existing immigration?

I've been recently to Japan and despite my fears Tokio was a really affordable place (leaving out the hotel prices of course). I thought this was due to the lack of growth and the recent quantitative easing and other government measures. Measurements that seem to be failing at the moment (thus the negative rates).

So cheap Tokio-Sushi is nice for European tourists, sure, but just a sign of how much growth Japan has lacked over the past years/decades that it suddenly becomes a tourist destination.

In contrast to that: I could imagine Japan, with its still high quality of living and modern, orderly society as a real draw for young and skilled talent from abroad if it were to open it's borders (and society).

Think about it in the terms of Gentrification: It's an artificially undervalued "part of town". One which value and (currently) cheap prices would sureley be appreciated by the pioneers this country needs.

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#68

Post by tosseraccount »

hackerboos wrote: post #63
Cthulhu_ wrote: post #56

Earlier quoted context omitted.

Wouldn't it be acceptable to just accept a shrinking economy and change policies in such a way to deal with it? i.e. shrink the police and armed forces, public services, cut needless spending, etc. Become more frugal as economy allows.

The key phrase here was 'aging population'. If the majority of Japan's population are retired then there will still be a huge deficit. Japan needs to bite the bullet and accept immigration as part of its economic strategy.

Maybe Japan thinks it can benefit more from less congestion and higher wages.

"Poor Fiscal policy" is likely a better explanation.

If they need to "bite the bullet"; how about balancing the budget?

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#69

Post by atmosx »

Cthulhu_ wrote: post #56
dzdt wrote: post #44

The backstory here is demographics. Japan has a shrinking, aging population and almost no immigration. With fewer people there are naturally less things bought, sold, and produced. Japanese authorities have been trying to pump the economy by deficit spending (central government borrows money and spends it), quantitative easing (central bank buys long term private debt, increasing the money supply for short term spend…

Wouldn't it be acceptable to just accept a shrinking economy and change policies in such a way to deal with it? i.e. shrink the police and armed forces, public services, cut needless spending, etc. Become more frugal as economy allows.

You sure you realized what's the problem?! Because the solutions you're proposing will only going to make it worse (really quickly, really fast).

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#70

Post by vetinari »

hackerboos wrote: post #63
Cthulhu_ wrote: post #56

Earlier quoted context omitted.

Wouldn't it be acceptable to just accept a shrinking economy and change policies in such a way to deal with it? i.e. shrink the police and armed forces, public services, cut needless spending, etc. Become more frugal as economy allows.

The key phrase here was 'aging population'. If the majority of Japan's population are retired then there will still be a huge deficit. Japan needs to bite the bullet and accept immigration as part of its economic strategy.

Immigration will not solve the problem of aging population. In a generation or two, the immigrants would face exactly the same problem.

Because with immigration, you didn't solve the underlying cause of why people don't have kids. You just muddled the observable status for a while.

Post reply on HN