Sunday, April 17, 2016

Japan Is Approaching Inflection Point; 
Dollar Strength Could Cause Massive 
Global Deflationary Wave: Macquarie
Article highlights Macquarie analysis that we may be close to an inflection point - "The Macquarie analysts believe a sharp depreciation of the yen and euro and sharp appreciation of the U.S. dollar would prompt an uncontrolled depreciation of Chinese currency and would cause a massive global deflationary wave. The analysts envisage two alternative courses that decision makers are likely to embark on over the next 12 months. As a first alternative, they see the Fed joining other central banks in much more robust monetary policies (such as QE4), while the second alternative involves the public sector embarking on active nationalization of capital markets and gross capital formation. The analysts believe the countries in the deepest liquidity trap (i.e. Japan, the Eurozone and China) would be the first to embark on these policies, with Japan as the most likely candidate for this policy alternative, while China, the U.S. and the Eurozone would eventually join Japan."
LINK HERE to the article

No comments: