Here’s a bit of interesting news that I missed until now. It appears that countries are being effected by the changing energy market. Japan which imports 100% of the oil that it uses has managed to keep its currency devalued so that it can both buy oil and be competitive in the export market.
Much of the offshore manufacture of goods for western consumer markets only makes sense if the cost of transportation is nominal. Now that energy costs are climbing, places like China and Taiwan that have been doing much of the world’s manufacturing are going to see their economy changing. And places like Walmart that are the primary retail outlets in the West are going to have their business model radically shifted as well.
“With an historically high amount of 1.5 trillion yen, the Bank of Japan jumped into the currency market to try and shore investors confidence as they seque into a period beyond the zero interest level they have been at for years. Investors were borrowing yen and turning that zero interest into other investments, as close to a sure bet as there is, all in an effort to keep the yen valuable enough as a currency (especially to change it into *energy*) but cheap enough to fund exports, critical for japan. But, this is changing, zero interest rates there are over and set to (probably) rise slowly but surely, so the question is will Japan’s economy change enough (grow in relative terms) to compensate and hold back inflation?”