Japan is in the forefront of the news with ridiculous statements such as a the sinking yen is a "Byproduct, Not a Focus" of its foreign trade policy. I have a simple question "Even if that statement is believable, what difference does it make?"
The answer is none. Regardless, statements from Japanese politicians are not believable in the first place. That helps explain the following Bloomberg headline G-20 Takes Harder Line on Currencies.
Two days of talks between G-20 finance ministers and central bankers ended in Moscow yesterday with a pledge not to "target our exchange rates for competitive purposes," according to a statement. That's stronger than their position three months ago and leaves Japanese officials under pressure to stop publicly giving guidance on their currency's value.
With the yen near its lowest level against the dollar since 2010, policy makers are attempting to soothe concern that some countries are trying to weaken exchange rates to spur growth through exports. The risk is a 1930s-style spiral of devaluations and protectionism if other countries retaliate to safeguard their own economies.
"Politically-motivated devaluations can't sustainably improve competitiveness; they don't solve structural problems and they set off reactions," Bundesbank President Jens Weidmann said yesterday. "The clear language in the communiqué underlines this unity and will allow the debate in the future to take place with a less excited tone."
Japanese officials in Moscow denied driving down their currency, arguing its fall was a byproduct -- not a focus -- of their effort to revive the world's third-largest economy.
Japanese officials aren't alone in accepting a cheaper currency as good for growth.
Bank of England policy maker Martin Weale said in a speech yesterday that although U.K. central bankers don't "target the exchange rate," there is reason to tolerate any inflation resulting from the pound's six-year decline.
Not all G-20 policy makers want a weaker currency. Bundesbank President Jens Weidmann said in a Feb. 13 interview that "the exchange rate of the euro is broadly in line with fundamentals" and "you cannot really say that the euro is seriously overvalued."
Mathematically Impossible
As I have commented numerous time recently, global currency wars are heating up as every nation believes it can export its way out of a slump.
In spite of statements by Bundesbank President Jens Weidmann, it's important to note that Weidmann does not set ECB policy. Realistically, Weidmann appears to have as much influence on ECB policy as hawks have on Fed policy (and that is not much).
The ECB wants a cheaper euro, the Fed wants a cheaper dollar, China wants a cheaper yuan, and Japan wants a cheaper yen.
Mathematical reality says that's impossible, yet that is what every country wants to achieve.
Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com
Here is an interesting video showing the ability of chimpanzees to memorize and recall random patterns of light flashes better than what one in a thousand humans could do. All chimps seem to have this recall ability.
Chimpanzees can far outperform humans in some mental tasks, including rapidly memorising and recalling numbers, Japanese scientists have shown.
At the American Association for the Advancement of Science annual meeting, Tetsuro Matsuzawa, of Kyoto University's Primate Research Institute, showed remarkable videos of chimpanzees displaying mental dexterity that would be way beyond most people.
The star performer among the institute's 14 chimpanzees, a 12-year-old male called Ayumu, has learnt all the numerals from 1 to 19. Several other Kyoto chimpanzees have learnt 1 to 9.
When the numbers flash up in random places across a computer screen and in random order, and disappear after less than a second, the apes can point immediately to the exact locations where the numerals had been, in the correct numerical order.
Prof Matsuzawa said a few exceptional people, such as those with savant syndrome, might be capable of such memory feats but they are far beyond the average human brain. "One person in several thousand may be able to do this," he said. "All the chimps I have tested can do it."
Prof Matsuzawa, who combines the study of wild chimpanzees in west Africa with research using the captive colony in Kyoto, said such a good working memory – the ability to take in an accurate, detailed image of a complex scene or pattern – was an important survival tool in the wild.
For example, the apes can quickly assess and remember the distribution of edible fruit in a forest canopy. Or, when two rival bands of chimpanzees encounter one another, they can assess the strength of the rival group and decide whether to fight or flee.
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