Recently the Governor of the Bank of Japan, Mr. Kuroda, released a new round of quantitative easing, with the focus of driving the yen lower. If the easing goes according to the plan, here’s what will happen. Major companies, like Toyota, get to say they’ve earned more money this year. How? Well because they sell a majority of their cars in overseas markets and their currency is now weaker to those foreign currencies when they record the money coming home it shows that their profits have increased. At the same time the people of Japan get stabbed in the back by their bank. They still need to keep buying products that are imported but the value of the yen is now less than before so the cost of those products goes up for your average people in Japan; this is an issue that Dawn J Bennett has mentioned numerous times.
This playing games with paper currency is dangerous and erodes the trust and stability of a currency. As Dawn J Bennett has discussed before, people need to start looking to other possible sources of investment. An interesting point made in a recent interview between Bennett and Chris Martenson was the need to people in the middle class to begin investing in ways other than stocks and bonds. This means people should start looking into investments such as solar technologies, silver and gold.
Now it may seem strange to invest in these resources, but when you sit down and take a look at the big picture it will make sense. Investment in energy efficiency for your house can lead to double even triple digit savings over the lifetime of the investment and you know it won’t suddenly crater like stocks do. For gold and silver it’s all about technology. As everyone uses an increasing amount of electronic equipment the demand for these two metals will rise. Both are integral to the manufacturing of electronics and will not be easily replaced. As less of these metals are left in the earth the more valuable they will become. It is important that we make the government listen to us and realize the dangers of quantitative easing and if you are in the middle class and looking to find safe investments then it’s time to look outside the stocks and bonds markets.