As a preface to this discussion, we would like to reiterate that this article is a purely academic discussion. Exchange Rates An exchange rate is, in simplest terms, the price at which one country's currency can be used to purchase another country's currency.
One of the most important races in recent years is well underway. And the stakes are high. So high, in fact, that entire national economies Revaluation of japanese yen on the line. But the strange thing about this race is that it is not a race to win; it is a race to lose.
It is not a race to the top; it is a race to the bottom. For some four years now, governments everywhere have been spending tax-payer money to prop up their economies.
Now they want their money back. But there is one more thing they can do to really boost their income… devalue their currencies. They would be paid more of their own, cheaper currency for the goods and services they sell abroad. Well if you think that is smart, then the Japanese are brilliant.
And more of the nation's money will be rolling back in with each shipment leaving the ports—bonus cash, which the country can use to either pay down some debt or reinvest into the economy. With such a great plan, you would think more countries would be implementing it.
But be careful what you wish for. More countries are doing it than ever before, to the point of it becoming a futile exercise of who can devalue their currency the fastest. And the race is indeed on, this wonderfully bizarre race to the bottom—the only race I can think of where the objective is to lose.
But can you see the futility?
So the runners call a time-out and huddle together to discuss this sudden emergence of poor sportsmanship. But it has to come as a consequence of other economic policies. We''ll keep you on top of all the hottest investment ideas before they hit Wall Street. Become a member today, and get our latest free report: How to Profit from Gold's Bull Run" It contains full details on something incredibly important that''s unfolding and affecting how gold is classified as an investment.
It is very interesting to note that Japan is a member of the G The Japanese replied to these accusations by saying the recent decline in the yen was simply a normal retreat to previous lower levels, coming as a consequence of fair economic stimulus policies.
What is expected to be addressed is how exchange rates can be directly affected by strategic bond purchases, which has been common practice for many central banks including the U.
Focus will also be given to measures that can be implemented by countries to draw more investment to create jobs and update infrastructure.
So is a currency war raging in the background of all this? If it is, no one seems to be calling it such. No one really wants stiffer penalties on running yellow lights, for we all take the liberty from time to time. In each issue, you'll get our best investment research, designed to help you build a lifetime of wealth, minus the risk.
Plus, by signing up, you'll instantly receive our new report: Surviving the Coming Economic Collapse.But this masks the essence of the first stage: participants' perceptions are smashed hard enough for the Japanese yen to lose the unconditional, knee-jerk safe haven asset recognition.
Apr 12, · The U.S. Treasury Department said it will press Japan to refrain from competitive devaluation while stopping short of accusing it of manipulating the yen in a report on exchange rates. After a revaluation, the exchange rate between the affected currency and another currency increases, equating to an increase in value of the revalued currency.
Conversely, after a devaluation, the exchange rate between the affected currency and another decreases, equating to a .
Revaluation of Japanese Yen, a historical lesson to draw: analysis Recently some Japanese politicians have been busily engaged in activities here and there, with an intention to reach an agreement similar to the "Plaza Agreement", which resulted in forcing the Japanese yen to revalue, in order likewise to corner the Renminbi (RMB) yuan to revalue now.
Professor Jiang Ruiping, Chairman of the Department of International Economics, at the Beijing-based Foreign Affairs College had an article in the People’s Daily in September 25, , titled, “Revaluation of Japanese Yen, a historical lesson to draw: analysis.” He addressed those questions for us back in But this masks the essence of the first stage: participants' perceptions are smashed hard enough for the Japanese yen to lose the unconditional, knee-jerk .