Japan as number one
Why would the Japanese people tolerate the value of their currency dropping by more than half, increasing the cost of energy and other imports? The answer to that is a point that my friend Louis Gave makes time and time again, as he did in a missive this week:
With Japan in the middle of a triple-dip recession, and Japanese households suffering a significant contraction in real disposable income, it might seem at first that Prime Minister Shinzo Abe has chosen an odd time to call a snap election. But that conclusion would ignore the two iron-clad rules of investing in Japan that we never tire of repeating:
Rule #1: Never underestimate the amount of pain that the Japanese will willingly bear, as long as the pain is taken together, and is seen to be borne for the good of the community.
Rule #2: Never underestimate the willingness of Japanese policymakers to test Rule #1.