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Long-term residents of Tokyo tend to be blasé about earthquakes, but this one felt different right from the start. It announced itself with a thunderous jolt
Long-term residents of Tokyo tend to be blasé about earthquakes, but this one felt different right from the start. It announced itself with a thunderous jolt
“What most likely happened was pedal misapplication.” So concluded an official of the National Highway Traffic Safety Administration, the US body which has just published its report on the spate of accidents involving Toyota cars.
S&P’s downgrade of Japan’s credit-rating raises a disturbing prospect. Is this stage two of the global credit crisis, featuring chain of sovereign defaults amongst the largest economies?
Who has survived the global credit crisis in the best shape? As Chou En Lai said about the impact of the French Revolution, it’s still too early to judge. The snap verdict that China is the big winner and the US and rest of the old G7 are big losers is already looking questionable.
Emerging markets used to be known as markets you couldn’t emerge from in an emergency. History is littered with examples of financial disasters in young fast-growing countries, from the Argentinian default of the 1890s to the Asian crisis of the mid-1990s.
By orchestrating a massive appreciation of the yen in the mid 1980s, the US condemned Japan to decades of stagnation and ended the challenge to its own economic hegemony. Effectively Japan was forced to commit financial hara-kiri.
The Japanese are doing it again. The Koreans prefer to do it when nobody’s watching. The Chinese are at it brazenly and, like everything else they do, on an enormous scale. The Swiss tried it, without much success.
The Democratic Party of Japan is about to make a momentous choice. Next week’s contest for the party leadership also decides who holds the office of prime minister. The contrast between the two candidates could not be starker.
The Greeks have got a lot to answer for. As well as roiling the markets and torpedoing the euro, they have inflicted serious damage on the debate about the global crisis and its remedies.
There are not many financial assets that are priced higher today than before the Lehman shock in September 2008. Two that have done investors proud are the yen and gold bullion.