Here is a case study on what NOT to do as a central banker. Despite terrible demographics the Central Bank of Japan insists on buying up stocks and suppressing interest rates to the point where Japanese industry and government debt is uninvestable. By the time this is all done, the Japanese economy could very well be gold backed.
2 questions, 1) Will all that bring the yen to appreciate or Depreciate? (Historically equity and yen are invested correlated) 2) Would you advice to play the crash of the equity markets with short ETFs?
Cincinnatuus
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@lu1977hk, Lu, you are going to determine the amount of risk you are willing to undertake. I personally am using short ETF's to make money off the markets dropping, simply from the point that your risk is limited ultimately to the money you have invested. Secondly, they don't expire like puts. Futures have both of those problems...
lu1977hk
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@Cincinnatuus, thanks but that was not my question. If your market analysis are correct, 80% of the financial stocks are gone. Will ETFs survive??? If yes, why?? You didn’t comment on the yen.
Cincinnatuus
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@lu1977hk, It's a pretty good question isn't it. In 2008, they were worried about the Money Market funds dropping below a buck. By the 80% of financial stocks are probably still insolvent... lol. Especially in Europe.