Marc Faber : “The yen is oversold, and stocks are overbought, and the correction is
forthcoming,” Dr. Faber says. “But anytime the market would drop in
Japan and the yen would strengthen, there will be more money printing.”
“As
a result of massive money printing,” Dr. Faber continues, “the yen goes
down and the bond market in Japan collapses. This would force the Bank
of Japan to monetize even more because as interest rates go up on the
Japanese debt, it becomes a burden on the Japanese government to pay the
interest on the debt. So it would have to be met by more money
printing, and that would lead to more yen weakness.”
And on and on it goes… until the yen is worth even less than the paper it’s printed on.
Such is the fate of all paper currencies backed only by the “faith
and credit” of an untrustworthy government. The principles of “sound
money” are largely ignored or forgotten. No one practices them anymore.
They are the “Latin language” of global economics — discussed only in
“theory” by a few steadfast economists who continue to pine for their
return. - in wallstreetpit
