Explaining The Crazy Stock Market Of The Past Few Days

It’s all about Japan, and it probably shouldn’t be as worrisome for American investors as a lot of reports are making it out to be

Most of the stories I’ve been reading about the US market decline are only getting it 1/2 right.

Because here’s what’s happening in a nutshell. And it has very little to do with the US.

It’s like if there was a volcanic eruption somewhere of a long dormant peak and some ash started floating over the US and people started thinking oh, we can’t see the sun clearly for a few days so we should reevaluate our entire lives when really very little on the ground has changed.

For years, it cost nothing to borrow Japanese yen. Because the Japanese government held interest rates around zero in a futile yet remarkably stubborn effort to rekindle a moribund economy. It didn’t work. So they kept doing it because.

Remember, or maybe you didn’t already know: Japan is effectively a one-party system so stupid policies can linger for years without any real political risk.

So Japan kept at it and it continued not to work. Except to provide investment opportunity to big money players around the rest of the world who of course didn’t…