The prediction is not "crisis". It's hyperinflation and runaway depreciation of the yen.
In terms of duration: I would say they are one regular recession away from this. For the last 5 years I've been saying "next 2 years". Today I'd say 1 year. (I have no actual money involved so this prediction is worthless. But you asked for it...)
It was the same with Greece: people had months or even years to yank their money from the bank. The trainwreck was telegraphed way in advance. It's just that nobody did it because they couldn't imagine it.
It's a similar psychological process that is keeping Japanese markets disciplined for such a long time.
By contrast, in a country like Argentina people have living memories of monetary disasters and they trigger much quicker.
>In terms of duration: I would say they are one regular recession away from this. For the last 5 years I've been saying "next 2 years". Today I'd say 1 year. (I have no actual money involved so this prediction is worthless. But you asked for it...)
So what you're saying is that you've called 3 of the past 0 recessions...
The Japanese economic stagnation is complex enough that it demands more than a lone sentence concluding that it will result in hyperinflation.
As an aside, I often find it frustrating reading HN comments related to economics, as it is not an area of strength for the community. Consider how much faith you would put in an Economist's analysis of consensus objects or networking protocols. This gets especially frustrating when technical terms with specific meanings (like duration) get misused in these discussions.
1/ I'm clearly not using duration as in bonds or portfolios.
2/ I wouldn't trust an economist's analysis of network protocols. I also don’t trust an economist when he’s talking macro.
3/ When somebody asks me, I'm happy to say that I (and many others) have been expecting depreciation and inflation for 5+ years. Being wrong for the past 5 years would still have made money because the yen has already dropped so much. But true, it’s a trickle, not a flood.
4/ Japan’s near future is not really complex. Demographics are only getting worse in the next few years; and the entire world is drowning in excess capacity. In this environment, their govt is acutely running out of its traditional funding sources.
They start borrowing from the rest of the world, but then yields will rise (further increasing their already fantastic debt servicing expense, exacerbating the problem). Or they take the easy way to (nominal) growth and pass the bill to yen holders. Which is what they've been doing since 2012.
The double digit inflation prediction will have very rapid onset once we get there.
and for the record, it doesn't have to be the next cyclical recession. Anything that makes the Japanese government abandon its last shreds of fiscal credibility may seal the deal for yen holders. How about a military build-up to confront their good friends the Chinese?
In terms of duration: I would say they are one regular recession away from this. For the last 5 years I've been saying "next 2 years". Today I'd say 1 year. (I have no actual money involved so this prediction is worthless. But you asked for it...)
It was the same with Greece: people had months or even years to yank their money from the bank. The trainwreck was telegraphed way in advance. It's just that nobody did it because they couldn't imagine it.
It's a similar psychological process that is keeping Japanese markets disciplined for such a long time.
By contrast, in a country like Argentina people have living memories of monetary disasters and they trigger much quicker.