I still maintain that there are elements of ponzi in what’s going on in Japan and that they’ve essentially put the cart before the horse. Driving asset prices “higher than they otherwise would be” creates the potential for a very dangerous disequilibrium that ultimately creates the risk that people’s assets fluctuate with great uncertainty thereby resulting in reduced economic activity as the uncertainty causes spenders to freeze….
Tonight’s 5.5% decline in the Nikkei has become the norm for Japanese savers who are simply trying to diversify their savings across a spectrum of assets that includes stocks. Is this rollercoaster really helping people plan for the future, spend prudently and help expand the economy? Call me extremely skeptical….