Japan Spent 60 Billion Dollars Defending The Yen!

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Over a four-day period Japan is suspected to have carried out two interventions to support the yen at an estimated cost of $59 billion dollars.
The first intervention came after the yen fell below 160 to the dollar for the first time in 34 years. The second intervention came a few days later after Jerome Powell announced that a rate hike was unlikely to be the Fed’s next interest-rate move.
The simplest explanation for the declining yen is that it is entirely driven by Japanese interest rates being low relative to other developed markets. People take their money out of the yen which is yielding 0 and put it in dollar denominated bonds to earn 5% - leading to a decline in the yen, but my friend Manoj Pradhan at Talking Heads Macro argues that this is a lazy oversimplification and that the Yen and Japanese markets are possibly the most interesting story in macroeconomics today.
Manoj Pradhan on Twitter: x.com/ManojPradhanTHM
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[@PBoyle]

Get a free 14-day trial of Odoo’s all-in-one business solution and see how it can make your life easier! Check it out at www.odoo.com/r/YQW

[@TheNeurotichi]

If one speaks of the moment against what has transpired the lens becomes a lie. Slight of hand with language is as fine as what!?!

[@abinadabagbo1603]

If only you understood how FED UP I am with the sponsored placements mid-video. I actually do fast-forward past them. Please! I am of the firm belief there are ways to get just as much, if not more revenue from your channel without disrupting tbe viewing experience so horribly.

[@mfanto1]

So the west has been in deflation for the last 20 years thanks for clearing that up

[@nitehawk86]

Interesting that Odo from Star Trek is sponsoring the video.

[@relwalretep]

@@abinadabagbo1603 personally, I'm fed up with entitled people telling creators how to earn an income but perhaps I'm just odd like that.

[@ducksupps9369]

As a 26 year old, I’m concerned by how much I love listening to Pat on quiet weekends instead of going out an making terrible life choices

[@youbetyourwrasse]

As a 59 year old, I'm concerned by how much I want a poster of Mr Boyle on my bedroom wall. :D

[@zurielsss]

Wise choice , commented from a 38 yr old

[@zurielsss]

@@youbetyourwrassenothing to be ashamed of, whether it’s due to you liking his content or you finally coming out of the closet 😂

[@asdisskagen6487]

As a 40 year old, I approve this message.

[@fat4eyes]

Don't worry, watching KZbin is already a terrible life choice.

[@patrick247two]

I'm losing sight of what value a billion dollars has.

[@Martcapt]

To me it's easier to go in steps from somewhere I understand everytime I want to get a intuitive sense. I have a intuitive sense of 1000, also of a Million. Then it's a matter of picturing 1000 Million. It works for me, at least.

[@meteorknight999]

​@@Martcaptthat was sarcasm cause how much trillion US is printing for weapons and foreign aid

[@shadmansudipto7287]

​​@@meteorknight999they stole more than they gave in aid so it's not a big deal. Millions of lives destroyed and 3 trillion$ of oil stolen from Iraq on the pretext of there being weapons of mass destruction which they later admitted doesn't exist.

[@subcitizen2012]

It's about 1/100th of an Elon. Or around 100,000 years of minimum wage. Monopoly money.

[@imooumoo4]

​@meteorknight999 thats literally nothing compared to the financial packages put out by Trump and Biden in the trillons each

[@P1nstr1p3]

You know it’s bad when people break out the Ancient Greek myths as an analog for your strategy.

[@honor9lite1337]

It's become a tale.

[@MarcosElMalo2]

I never even knew that there WAS a Japanese Diddy. Thanks for the transpacific rap news, Patrick!

[@cdwilliams1]

This is my favorite rap news channel!!

[@kakefisk]

No Diddy.

[@relwalretep]

Clearly, Patrick's AI generator is glitching. Not just the weird edits, but the use of the word "we" instead of "I", and the complete absence of rap and crypto news. I look forward to the next model release.

[@maifantasia3650]

At 23:41, the Patrick Boyle AI CGI had a glitch. I knew the knowledge of rap news and the lack of blinking couldn't have been the work of an ordinary human.

[@tob007]

def freaked me out lol.

[@ricahrdb]

It took me a moment before I understood what was going on. Looks like we got the audio of the next segment over the video of the previous segment.

[@kimberiysmarketstrategy]

Just voice over

[@3komma141592653]

@@kimberiysmarketstrategy No, the matrix had a glitch.

[@T3hderk87]

He IS the green screen!

[@Derekzparty]

Dark tie and a big city background! This video must be super important!

[@Fanta....]

moby is his stunt double

[@nitehawk86]

@@Fanta.... Wait has anyone seen Moby and Patrick in the same room?

[@jamesalias595]

Unless there is severe deflation, people do not delay purchases due to deflation only. The reason the Japanese didn't purchase has less to do with deflation but to do with economic sentiment. For example for decades the price of electronics have been falling and the quality improving, yet people still buy electronics instead of waiting for the end game. So it is not deflation that central banks should worry about but consumer sentiment, do consumers feel that they will have jobs, will the future be better, no one really cares if prices slightly go down or up in the short term. Deflation isn't the problem, it is demographics, there wasn't enough demand for the supply. Also productivity in Japan which was a world leader became a laggard during the lost decades.

[@senerzen]

Exactly. I think this "2% inflation good" talk is just an excuse to print money which means stealing savings of the commoners. When new money is printed, first receivers of that money can buy things at yet-to-rise prices. By the time new money trickles down to the common folk, prices have already risen as the new money was spreading in the markets. In short, printing money is simply wealth redistribution from bottom to the top.

[@tomi213]

Problem with deflation when it is produced by central bank interest rate manipulation is that it funnels money from those in debt to lenders(rich). So first the rich get free money and then after when the working people lose their jobs they are forced to sell their houses at distress prices. Then the rich buy the houses cheap and central bankers pat themselves on the back for winning the inflation. End result of this is that working people end up paying bigger portion of their wages for mortgage or rent so there is less to spend on goods and services. Less demand means the companies that produce stuff start firing people and the economy keeps circling down the drain. The rich that got their free lunch don't spent their newly gained money back to real economy on goods and services. Instead the keep playing the "chair game" with stocks, real estate and other assets.

[@apc9714]

Also high debt and deflation is a terrible duo

[@jeffbrunswick5511]

You are right. Deflation stopping people from living their lives, is one of many economic theory factoids. If you need a new smart phone/place to live/food to eat/holiday/book to read/clothes to wear/etc, then you're not going to wait 10 years in the hope that deflation stops.

[@aliasgharkhoyee9501]

+1, it's surprising how many economists believe in this nonsense. You buy things when you need them. You're not going to postpone your restaurant meal or birthday present or vehicle purchase etc because there's some chance the price might decline slightly in future.

[@MaximilianRaetz]

The Japanese economy is an interesting topic looking in, but absolutely terrifying when you live here. Everything has gotten more expensive and salaries aren't keeping up despite what the government hopes will happen. With housing prices rising, living in Tokyo is going to become more and more difficult.

[@johnwesely]

I can’t believe Patrick said Japan had a super Asian population…

[@GK-up6xz]

Aging! Aging! 😂

[@Fanta....]

you think thats bad? guess how many asians are in india? you guessed it, every single one

[@Itriedtobe-wq9lj]

They live beside Asia. Brish are not Europeans in the strict geographic sense

[@LoveOfLam]

Reeeceeeist

[@TastySlowCooker]

Wait is Brish a racial slur cause it should be

[@monkeydog8681]

I just vacationed in Japan. It surprised me how cheap the Yen was.

[@Picasso_Picante92]

You're welcome.

[@paullynch4021]

Economists always say that deflation is bad because buyers will defer purchases as goods will be cheaper later. Japan's deflation has been about -0.1%. Are people really putting off buying a new car, or fridge because next year it will be 0.1% cheaper? I don't think so!

[@imooumoo4]

They dont want deflation because their assets will lose value. If controlled inflation cam be considered a good thing, there is no reason to believe controlled deflation cant also have benefits

[@blackadder3388]

Still hoping one day Partick makes a yt short that is just rap news. No financial analasys this time just a man in a suit talking about rap beefs.

[@2001lextalionis]

Good topic, I live in Japan outside Tokyo and things are not so promising here. Prices are up. Salaries are low. The shelves are not as stocked as they once were. The new trucking law has put a crimp in the logistics chain too. The main issue with Japan as I see it is the tendency to defer to the aging generation to make the final decision. Its both stultifying and the elderly have very little understanding about how the modern world truly works. If I had to guess I think we see 200 yen to the USD before we see 100 yen to the USD. Hopefully I am wrong.

[@GK-up6xz]

I live in Japan too but I don’t think 200 yen will happen. As Patrick describes, increasing wages are the key to improvement but that change isn’t instant.

[@babahanuman83]

Same in EU.

[@RanEncounter]

​@@babahanuman83 Maybe you should look at the rate of Yen to Euro too.

[@brunoheggli2888]

The EU is compleat diffrent!

[@kishisetasama]

Yeah...policies still tend to favor the elderly because they make up most of the ballots in the elections

[@stacksmasherninja7266]

Patrick casually sitting in some NYC skyscraper is a vibe nothing else can match

[@PBoyle]

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[@thomas316]

It must be tempting for Japanese workers to work abroad now JPY has devalued circa 40% against USD.

[@sko1beer]

Well the work hours in japan has made it better to work abroad anyway

[@havencat9337]

thier gov its screwing them up or the sake of bi rich companies.... very sad

[@ryanshaw4250]

I just sold my multi-million dollar companies in America to move to Japan and work here.. Real businessmen doesn't play in the waters of today, they look 3 to 5 years ahead and I'm all in on Japan.

[@mennovanlavieren3885]

​@@ryanshaw4250But I guess you're not working for a salary, but are starting a new business. That is not the situation of most people.

[@fomobull4187]

@@mennovanlavieren3885 "Most people" are not businessmen, that is what he was talking about. Go for it, Ryan! The situation of "most people" will be better if you do something useful for the world.

[@altaccout]

Patrick's film making is brilliant. A lesser creator would have focused the camera on the face, but Boyle has the camera focused on the skyline to prove it is not a green screen.

[@SkynetDrone12]

Patrick your voice always helps me put my daughter to sleep in the car. Thanks for your regular updates about rap music and rap beefs

[@bananerz3167]

Must be the strong calming protective dad vibes he gives off

[@fenrirgg]

Omg poor daughter 😂

[@jeffsetter213]

It's a testament to just how warped the global financial system has become as even as someone steeped in finance & trading for 10+ years my first question when I read this title was... ""$60 billion, is that a lot?"

[@ducknorris233]

Saying they “spent” that money to support the yen gives the impression that that money is gone when in reality it’s like if they bought gold. There’s no loss unless the value of what they bought retreats and then a 100% loss would be unlikely.

[@lenowoo]

Thank for the explanation

[@xdonnix]

There is a tangible loss there.

[@xdonnix]

Also lol at equating the YEN to gold.

[@user-xr3rb6pn9m]

That is a wrong comparison. Japan can always print more yen if needed but it cannot print more dollars. So, spending precious dollars to buy back yen that you can always print anyway is not a sustainable strategy in the long term.

[@JudeTheCoolGuy]

Is it not more like buying a fiver for a tenner. Or a depreciating asset with an appreciating asset?

[@GastonKe]

A better idea for the BOJ is to have a volatility target (e.g. 3 to 5 stdev) in order to discourage leveraged bets and force speculators to liquidate positions

[@jessip8654]

I'm currently watching a slice of life anime from the 1980's (Maison Ikkoku) and it's kinda bizarre that the prices characters are paying in the show made 40 years ago are very similar to what the Japanese are paying now. Things like small apartments for 60,000 yen a month, and decent jobs paying 1300 yen an hour.

[@nitfitnit]

MoF is selling dollars at Y155-160 that it bought at Y80-100. In the interim, it collected higher yields on its USD holdings than it paid on its JPY debt. Buying low and selling high, it has been a hugely profitable trade. They've basically doubled their money, and can use the profits to help pay down their pile of debt.

[@robymaru03]

This is put the US as the big loser in this whole strategy.

[@TheGeorgeous]

​@@robymaru03not really. The demand supply of the dollar is much beyond the USA. 60 B is miniscule in the global context

[@tocreatee5736]

didnt they buy US treasury? the price on these bonds are very low now.

[@xman7695]

That's the thing I'm not really getting. Are they selling their old portfolio of low yield bonds (which is probably down quite a bit) or are they just not renewing their short term/ending bonds and using that money to buy back yen?​@@tocreatee5736

[@serriajohn]

you underestimate the wisdom of US FED.

[@mshotz1]

I have an old friend who speaks Japanese and teaches English in Japan. He says that the "service industries" in Japan is always in flux these days. Restaurants and cafes open one week and close two weeks later. A lot of young people who enter the work force via these jobs are suffering.

[@Mr-Spork]

Very informative & fascinating (as always). I've read that economies are categorized into four types: Developed. Developing, Argentina & Japan. This seems to fit that assessment.

[@MichaelWilliamz]

Great topic! I’ve been waiting for this one! Thank you!

[@PhilfreezeCH]

Switzerland tried the same thing but the other way around (making sure the Swiss Franc isn’t too strong against the Euro) and had to give up. The problem wasn‘t even that it became too expensive, our federal bank just wasn‘t able to pump enough money into the system while staying within the rules. They would have had to just straight up buy large European companies to have a large enough effect but they aren‘t allowed to do that. II wonder if Japan will run into similar limitations.

[@ryantsui2802]

If you believe the other way around is a problem it's easy to solve because the problem natually creates resources to throw at solving the problem. Your currency is strong and thus if you want to print currency you can sell it at above the value you've marked for the currency until it's resolved, + at the same time, labour from elsewhere is cheaper so there will be economical pressures encouraging imports. I haven't heard of the story, but I assume the rules were made to limit price inflation within the country from the artificial interference.

[@Nick3DvB]

I wonder how many soviet factory owners desperately tried to explain the concept of an output gap to comrade Stalin, as if their life depended on it...

[@NotMarkKnopfler]

With Stalin, their life _did_ depend on it! 😅

[@Bokto1]

> Soviet > Owners Who's gonna tell him

[@RaderizDorret]

The Party owned the factories. The people you're looking for are the managers

[@thepostapocalyptictrio4762]

Great background for this video. Bonus points if you are actually on a sofa backed to a window in an office in a large metropolitan city.EDIT: you know, one way you could increase your rap street cred is a video on the business of Cannabis(especially with the US rescheduling)

[@ianporter2446]

3:27 looks like someone forgot to do the ultra key on the subscription graphic lmao

[@Castellanocreep]

You deserve a million subs!! I can’t wait till you hit it bro!!! Awesome content

[@MrMadvillan]

The yen has been at a very big discount for the last few years with no end in sight and almost no one talks about it. I regularly buy product from japan and travel a few times a year and it's really wild how far usd goes now. I find myself buying thing just because everything is basically 20% off from what it was a few years ago. Like many options to sit down lunch and a beer for 10$.

[@josephpurdy8390]

I met a man once that wouldn't buy a PC manufactured anywhere else. Unless it was built in Japan.

[@ryanshaw4250]

FK that.. move the family here, sitting on a bunch of silver and dollars here with a pretty good yen stack and Japanese equities stack let alone crypto.. this is the only place in the world I want to be right now. I take the family out for wagyu all five of us and my tab is like 50 bucks USD all in with drinks.

[@MrMadvillan]

@@ryanshaw4250the way to go rn is living in japan getting paid in usd. then enjoy the toro plate for a third what you’d pay in California.

[@FullLengthInterstates]

​@@ryanshaw4250 no one in the world wants to admit it but Japan is performing incredibly well by objective metrics. unfortunately the one downside of having to learn Japanese offsets all the upside

[@MrMadvillan]

@@FullLengthInterstates it’s acutely much easier to speak than english and grammatically it’s far more straight forward. Writing is another story and there are very few people who will be willing to help you work through your broken Japanese.

[@Profielzondernaam]

Your presentation style and sarcasme are awesome! Subbed :)

[@shelterskelter]

Love you talks. I put them on to go to bed. I legit love it. My wife thinks Im an idiot. " You always end up snoring then waking up..then snoring." Dunno mate. Its a thing now. Keep er up.

[@jfjoubertquebec]

Then we watch again to watch the parts we missed... yup.

[@mammuchan8923]

lol me too, but I’m the wife

[@namename6459]

I do the same thing but I’m not sure it’s a compliment 😂

[@mammuchan8923]

@@namename6459 no one’s perfect 😉

[@seneca983]

"You always end up snoring then waking up..then snoring." Are you waking up because of the snoring? If so, it might make sense to consider using e.g. a CPAP device or some other similar remedy.

[@christopherdamiano4233]

Good video. Somewhat confusing how at 2:37 the figure charts went from inverted to uninverted for the same measurements. I would make them consistent between the two figures.

[@PhilippBlum]

Judging from 3:28, I guess there have been some issues when it comes to editing. Maybe they rushed it.

[@ameyapathak2008]

New Specs looking cool 😎.... Professor Patrick

[@quotidien_]

Sorry Patrick but you ignored the elephant in the middle of the room: dramatic population decline. This explains just about everything that is going wrong in Japan. It also explains why no amount of government/monetary intervention will work. What is happening now in Japan will happen everywhere in the western soon.

[@Khalid-kp1mu]

Fingers crossed

[@BenP-ue5zn]

I believe the belief is that various AI products will eliminate so many jobs that having a declining population is a good thing unless you’re producing labor intensive goods (food). I think a number of influencial entities are planning for this type of future.

[@TheReferrer72]

No, it will not in the West. 1. The West will let in immigrants. 2. The West will experiment until it arrests the decline in births, cheap housing, free child care, credits for parents staying at home. 3. eventually profits in the economy will explode when automation makes the Industrial revolution look like a child's plaything. Social unrest in The West always leads to mini revolutions.

[@neideparente1449]

Aw shucks, so much better to have a big population living on the streets half dead sacking stores to self medicate with veterinary anesthethics. Give San Bernardino my regards !

[@countrycorner9337]

thus the massive immigration in the west

[@C00lerpowa]

Great as usual Patrick. If possible, could you make a video on interest rates in general and how they are used to influence an economy? thanks! PS.: Get us a video on Portugal! (we keep hearing how the economy is growing and heading in in a great direction, while the middle class struggles more and more to even get a home)

[@dasfahrer8187]

Congress: $60B? That's it? Hold my beer...

[@USandGlobal]

Congress: good thing I’m the reserve currency

[@fyang1429]

Fed: Congress? does it set the interest rate?

[@samsonsoturian6013]

Congress doesn't have any input on currency

[@realfakemaths]

What is this? A bailout for ants?

[@superfuss1984]

@USandGlobal Not for Long anymore.... 😝

[@vicaria119]

Patrick is such a professional. I love how he boosts other channels.

[@heatherhutchinson3625]

3:27 love this part the most!

[@yellowpitch1840]

THIS is why I Subscribe!!! Thanks for sharing.

[@IamP3ngu1n]

A little over my head and outta my "Wheelhouse" but some of this kinda reminds me of that "run on the Baht" thingy that happened awhile ago.

[@dogsbecute]

Its not as over your head as you think, especially if you were able to make that comparison! Give yourself a little more credit!

[@IamP3ngu1n]

@@dogsbecute Thanks ! 👍

[@austin3853]

Great video! Would love to see an updated video on US debt itself and the international demand for USD. I feel like so much of the push for the gold standard and/or cryptocurrency is tied to a misunderstanding of US debt, institutional investors, currency creation (ex: creation through bank lending vs 'printing.'), etc.

[@tonycrabtree3416]

USA just checked into the chat...with several trillion.

[@samsonsoturian6013]

The dollar is big. Really. Really big.

[@nelsonta00]

just several trillions? Thats chump change

[@samsonsoturian6013]

@@nelsonta00 Liar

[@candycigadddict]

By 2044, several trillion dollars would be small change.

[@superfuss1984]

@samsonsoturian6013 Makes the Fall Longer & Impact Harder.... 🍿

[@ferrariscuderia4290]

Now where has Patrick broken into for this week's video? I could imagine the hotel room guests coming in and seeing Patrick in the middle of recording his video and him just continuing on completely nonchalantly. Great topic and video as always!

[@EcomCarl]

Fascinating insight into Japan's economic maneuvers! The strategic interventions reflect not only the complexity of global finance but also the critical role of policy in stabilizing markets during turbulent times. 👍

[@fredi9204]

This is a very good summing up of the problems Japan faces with regards to their currency. I do wonder if our expectations for CBs' ability to influence the economy is excessive and even misplaced. For example, currently Fed has set very high interest rates, which reduces investments and decreases housing supply during historical housing scarcity. US inflation is predominantly from rate insensitive service sector. Its major component rents are even indirectly pushed up by higher mortage rates. Fed may end up chasing its own tail by throttling residential investment. Household formation becomes collateral damage. Crushed dreams of living in a home may explain part of the stubbornly low sentiment. It's also notable that while Fed is discouraging investments, US gov is running enormous deficits partially to encourage investments to onshore strategic industries. Edit: In contrast, Japan actually builds enough homes, which supports real incomes. They probably could tolerate higher rates better than higher import prices.

[@donaldjohnson-ow3kq]

The problem was trying to get a decent job in Japan for decades. After 20 years of not hiring a segment of the population, now companies are saying they can't find workers. What they mean is - they don't want to hire those people who are now over 40 years old and never had the chance to gain experience. They can't find the 20 year olds that don't exist.

[@goddylau]

Patrick can you do a video explaining the musk compensation vote please! would love to hear your take on it and ruthless sarcasm

[@PBoyle]

Here you go: kzbin.info/www/bejne/h5zYcouFgr6qd5Y

[@davidoconnor8224]

Great video as usual, I'm still laughing about the "Linear City" video, did you mean above 1.60 to the dollar rather than below?

[@ooplesoft]

At @4:00 you have the subscribe green screen. Seems like a quick editing error to fix!

[@Blue-pk1hw]

In your description it says that you are a hedge funge manager, university professor and a former investment banker, so I was wondering if this youtube thing is a part time thing you do and maybe if that explains why you seem to take these video in different locations?

[@benjamins2458]

Deflation doesn't lead to economic stagnation historically. Only associated in some instances, whereas in others, it occurred during decades of sustained growth in the US.

[@tebitt]

I’m not sure people do defer purchases with falling prices. I purchase a laptop even though I know it’ll be cheaper and faster a year later…

[@klevisbilani]

I never understood the reasoning behind why deflation is so bad. It sounds like a made up argument. I mean if it were true the opposite also has to be true. Meaning in inflationary period people would spend all their savings to purchase a tv, fridge or whatever because tomorrow it might be more expensive. Which is not the case so why should we apply this logic to only one side of the argument?

[@justinsayin3979]

_"Meaning in inflationary period people would spend all their savings to purchase a tv, fridge or whatever because tomorrow it might be more expensive."_ That's exactly what people do when there's serious inflation.

[@klevisbilani]

@@justinsayin3979 fair enough but there has to be “serious deflation” to justify this reasoning. Saying simply deflation causes all this is painting the wrong picture. Mild deflation around 2-4% (not all the time) will not lead to such tragic economic or behavioral changes.

[@yamabiru4553]

1.Less than 20% of Japanese workers are in the companies giving raises, everyone else is seeing minimal to negative wage growth. 2. More overtime for Japanese workers, really? 3. The population is already skewed to the over 50’s , not risk takers 4. The younger population is shrinking rapidly and making 2000 USD/month 5. The weak yen is not causing any virtuous inflation whatsoever. 6. The JPN politicians and bankers are about as clueless to real reform as to what a 2 week vacation is

[@mattanderson6672]

Thank you Patrick

[@fabiohenriquesouza3325]

So if workers get paid more, they buy more things and the economy gets better?! Who would have thought?! Congrats, Japanese government, for trying the rather obvious solution to increase spending: making sure there's money to spend.

[@tlmoller]

Nice new office you got there Patrick 😊

[@TheRealStevenPolley]

23:35 - man that was a trip

[@williamwcheung]

I'm happy I'm going on holiday in Japan in a few weeks 😂

[@saes2715]

Me too !!!!

[@acommenter]

The issue IIRC in japan it's frowned upon to ask for a higher salary, It's seen as being disrespectful to your boss, furthermore switching employers doesn't work neither since you pretty much start from square 1 and climb up. This doesn't encourage wage growth very much.

[@tradito]

well, at least that building on the left is nicely in focus

[@andrewwickham4642]

Great video Patrick…. Love information… Cheers Andrew

[@neliz2k]

I love the focus on the skyline!

[@ninjaong87]

Anyone else realized the desync? I don't think many of us did since he's so monotonous anyway.. 😂 Regardless, I'm a returning viewing because of the quality content. Thanks again for the very informative share!

[@mohammedosman4902]

really interesting analysis of Japan's economy

[@existentialvoid]

I work and live in Japan (raised here) and the yen-dollar issue is a problem.

[@BrokenSymmetry1]

Why do Central Banks do this? Pointless and just burning through reserves. And this are the professionals with PhDs. God help us all.

[@weswest8666]

The camera focus was on the background and not you, my eyes are strained

[@sbeers88]

I get paid in Yen. It's been pretty painful for the last couple of years.

[@saltmerchant749]

I mean, why would central banks even hold that much FOREX reserve if not to use them to prop up their own currencies? Sure greenbacks are the medium of exchange for strategic economic resources like oil, but holding reserves of the scale that some nations do, it's pretty clear what their intention is.

[@xman7695]

The other is keeping their currency low so their exports keep being cheap.

[@seneca983]

"why would central banks even hold that much FOREX reserve if not to use them" One possible reason is that they have in the past intervened to devalue their currency which leads to accumulation of forex reserves. In that case, forex reserves aren't so much a goal as a byproduct of the policy.

[@serriajohn]

er, Japan can not say No to Fed.

[@serriajohn]

Crisis gives opportunity, it is time to purchase Japanese asset, when this is done, Japanese Yen will increase its value.

[@seneca983]

@@serriajohn The Fed hasn't ordered Japan to accumulate big dollar reserves.

[@mcs131313]

I feel like people who don’t get economics or haven’t lived in a stagnant country don’t understand how big of a deal lack of improvement is. But to the “become an emerging market” thing at the end - I think people with a low-medium amount of Econ knowledge can overplay the importance of indicators like GDP growth - and ignore the fact that it is in the grand scheme of things 1) super wealthy, 2) super Educated 3) super strong institutions 4) super safe and stable. 3 decades of stagnation sucks but let’s not forget that while there are some societal and economic issues, Japan’s absolutely one of the best countries to live or do business in by many measures. And they have an important enough location that if stuff ever got really bad - some western friends would definitely help out in exchange for continued use of some military airstrips.

[@kimberiysmarketstrategy]

Japan is stunning ❤

[@themindgarage8938]

High GDP, education and stability alone are not enough to make a market (as opposed to a country) "developed". MSCI still consider South Korea an emerging market even though it is obviously a highly developed country. Things like how truly "free" a country's exchange rates are or how easy it is for foreigners to buy stock matter a lot. This classification matters because trillions of dollars of money is held in passive funds tracking the MSCI Developed World Index, meaning an upgrade or downgrade in status would force these funds to buy or sell billions of dollars of stocks from that country.

[@mcs131313]

@@themindgarage8938 Re: South Korea there developed in the spirit of the word - MSCI has said they meet the criteria other than ease of transacting and 24/7 FX trading. In terms of Japan - yeah agree there’s more to it - but they’ve been a mature developed economy as long as most of Europe. central bank has a decent ability to control monetary policy, and The YEN is one of the most liquid currencies in the world - so they’re not getting bumped any time soon. Interestingly ETFs are a small part of the picture (only 10% AUM in the US). What matters is actively managed institutional money, ($30T AUM in the US alone). They use classifications to an extent, but people managing billions are smart enough to adjust. don’t think it would have the enormous effect you’re imagining. it would be a net inflow (speaking to korea), but EM ETFs and institutional allocations have grown a lot. - msci would signal well in advance to allow gradual rebalancing. Japan and korea would both be less impacted vs many countries since their chaebols / conglomerates are prominent and receive significant analyst / investor attention.

[@FullLengthInterstates]

this is very important! GDP is a means, not an end. There is a lot of correlation between productivity vs other quality of life indicators, but many countries have figured out you can net improve quality of life by giving up some GDP.

[@yuzuki7531]

Japans national wealth is 29 Trillion dollars plus Japans Stock Market is the 2 largest in the world, almost the size like the EU. Japan isn’t what most people think, it’s actually a huge sleeping 🐻 🎌

[@ShainAndrews]

@PBoyle Is there a country where corporations are NOT reporting record profits?

[@Picasso_Picante92]

Living in Japan 32 years now. I'm actually poorer now then when I arrived as a young man. Shit is expensive and wages make Cambodia look like New York. One thing you didn't touch on was the problem of "Shrinkflation" Japanese companies are reluctant to increase prices so they quietly decrease the size and amount of products in their packages. You see this in Restaurants too with smaller portions. Sucks, but we still have national health Insurance, clean and safe infrastructure, a polite population, beautiful women and a really cool culture. So there is that.

[@HughJass-jv2lt]

And don't forget your Nuclear Irradiated Drinking Water! 😂😂

[@Picasso_Picante92]

@@HughJass-jv2lt That's China. Not Japan.

[@HughJass-jv2lt]

@@Picasso_Picante92 🤣🤣 No EINSTEIN. Japan dumped all their *FUKUSHIMA Irradiated Water* back into their own Waters. Educate Yourself. ❤❤

[@Picasso_Picante92]

@@HughJass-jv2lt Yeah, I know. I was there. I drove emergency supplies to Tohoku as a volunteer. I saw the reactor building blow up in real time. I'm aware of the radiation leaking into the seawater. I'm also aware that levels haven't affected local produce or drinking water. Because you know SCIENCE. Unlike you I try not to believe every sensationalist thing I see online. Run along now.

[@user-sl5rq6sm4m]

Your entire bottom paragraph is subject to end thanks to immigration too btw give it a decade and revisit this comment

[@karendarrenmclaren]

Best rap channel ever. Can't stop watching.

[@LoOP-oi4qm]

i love the fact some one in this world is capable of deciding when should the market be free and when it should not be

[@gbxmusicchannel3836]

Deflation is only bad for businesses that shouldn't exist.

[@skyboundmktg]

LOLOL The sponsor copy is great marketing bs. Odoo doesn't charge for it's app, it only charges per user / per month which would be more expensive than buying a license for software in a traditional manner. I mean, respect for trying but maybe leave that sentence out of the copy.

[@Kier4n99]

"You're gonna need more people to use our software effectively" "We're gonna charge you for each new person"

[@michaelhoudecki3657]

Wait... why is it said to be falling if the fed says they're gonna cut? Because people are rushing in to buy bonds at the highest rate?

[@qwepoi222]

How big a role does Japan's trade deficit play a role in the weak Yen? It has finally turned to a surplus this March. Exports driven by the weak Yen, and no longer hindered by Covid/IC shortage, suggests surplus could continue. I remember the persistent surplus in the prior decades was the driving force for the strong Yen... could Japan be heading there again?

[@callaghandevYoutube]

Can i ask. Why does the fed choosing not to hike rates spark a drop in the japanese money markets, I get why it would if they promised to increase rates, but i thought keeping rates constant would be fine.

[@calexico66]

Japan's economy has suffered from prolonged deleveraging since the bursting of the bubble economy boom. Also the shifting of production to other places from export oriented industries, which have the highest productivity and higher wages, has meant that most jobs have been on low productivity services. And due to a cultural quirk it's accepted that employers can generally abuse their employees, this means a high number of hours and low wages per hour. In fact there are indications that although there's a decreasing percentage of working population wages have generally gone down or stagnated. This results in lower demand in the economy, either due to low investment, inability to spend due to having no free time, and low wages and economic insecurity that keeps spending down.

[@jenBaker707]

What are your thoughts on setting the price of the Yaun daily?

[@keith2366]

Can you get much growth in consumption in a country that is getting older by the day? Young people consume goods, old people not so much.

[@grimaffiliations3671]

maybe they could get rid of their 20% consuption tax?

[@samsonsoturian6013]

Not necessarily. Older people tend to make more money so they can spend a little, while younger people spend little except on a few large purchases made with borrowed money. Not sure how the math works out

[@BenP-ue5zn]

There are offsetting factors: large increases in productivity due to AI will benefit smaller populations. It is easy to reduce capacity in many cases, so societal costs can follow societal needs. But it does seem, from a global market sense, than being a front runner of population reduction is possibly troubling.

[@fenrirgg]

The old people I know spend more than they earn (huge debt). They spend mainly in gambling, restaurants and cigarettes 🤔

[@krunkle5136]

And a country where they work their young to death, sending them to the lithium mines where they need to endure dangerous conditions mining that lithium.

[@naaags]

"[...] squeezing the shorts out of their position" It's a reasonable commentary but you gotta love the phrasing

[@Jahguaar]

Knowledge supports growth.

[@unl0ck998]

Slightly out of focus, or the lens is dirty

[@PhilippBlum]

You got a greenscreen issue at 3:28. The editor missed this one. You can reupload a fix, can't you? :)

[@gotguts786]

Down jones recently hit 40k, is market overdue correction? Can you please make a video on why the stock markets all time highs?

[@user-ol7tl1vf5m]

Spending 60 Billion dollars that were invented from thin air to save their own invention out of thin air is a headline in the making.

[@Sosi288]

I don't know what's worse. As an average Joe from Europe trying to make sense of all this, I have never experienced a situation where the cost of living gets lower with time. Quite the contrary, the cost of living is nearly unbearable. I dream of a deflationary economy and lowering prices that could give me an opportunity to live comfortably without looking for pennies under the sofa cushions. From the point of view of policymakers and bankers, deflation might sound like a bad thing, but from the common folk's point of view, it's actually a good thing. Imagine a housing market so low that everybody could afford to buy a house without a mortgage that surpasses life expectancy.

[@leonardooriano5794]

That’s not how deflation works, only workers near the end of their work lives would benefit, and nearly everyone else would be worse off

[@Sosi288]

@@leonardooriano5794 How so?

[@leonardooriano5794]

@@Sosi288 because deflation causes an immediate tightening of credit, which is universally bad for anyone without cash reserves as well as most businesses. Ends up creating an economic situation where a small number of people can buy things cheaply with their now-swollen savings, and everyone else eats shit

[@TomCrockett-bl1gp]

Got a question for Patrick and the peanut gallery. Here goes. Is there a formula for or is this profitable? A fifteen year contract on a mortgage @3% from a lender that borrows the money from the Fed on a the contract @ say 5.5 or 5.75%. Is this something that is doable or profitable?

[@WeeG-bwc77]

All Fiat Returns to Zero - which is how much Fiat is actually "Worth".

[@IrrippiOntor]

Enjoyable, and informative - as usual. Just one thing: Felt compelled to share this. Nice thumbnail. But I don't think it is conducive for people checking the video out when the link appears with the subtext "Get a free 14-day trial of Odoo’s all-in-one business solution and see how it can make your life easier!.." Anyways, always enjoys your content. This was particularly good

[@walkingstick6655]

Is $60 billion meaningful to Japan? I'm not being cute, here. I know it's a wad of money, but is it meaningful outlay to Japan and/or does it have any meaningful, enduring impact? I really don't know. I see the chart presented, showing an uptick of the Yen-to-USD value, but it sort of doesn't mean much to me. Hasn't Japan struggled for about 30 years, now? Does $60 billion thrown at this, at this point in time, make any meaningful impact on adjusting deflation/inflation?

[@zurielsss]

It probably won’t make a huge dent, ultimately it’s the difference in interest rates that is tanking the yen. But Japan is too in debt 200%+ to raise interest rates. They need to write off the bad debt and lots of companies from the recession in 90s to reset for a healthier economic growth in the future

[@Luke_Stoltenberg]

Like pissing your pants in the freezing ocean to stay warm. It will work for a few moments...but sooner or later reality comes back