Japans economic problem
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The term kabuki, taken from the American Heritage Dictionary of the English Language, means "a type of popular Japanese drama, evolved from the older No theater, in which elaborately costumed performers, nowadays men only, use stylized movements, dances, and songs in order to enact tragedies and comedies." In relation to the article entitled Currency Kabuki one can only assume that Hubbard is referring to the economic drama that Japan has been going through. Policymakers in Japan are the performers who utilize economic tools to impose a tragedy upon their nation. The Japanese are using currency intervention to make sure that the yen does not appreciate for the fear that it will eliminate any sort of recovery from occurring.
The problem seems to be that the policy they have undertaken is too tight. The ensuing problem from the stringent monetary policy has been, and continues to be, deflation. Hubbard suggests that deflation "can be an economic cancer." In other words, it can provoke deeper economic problems than the ones occurring now. A continuous period of deflation would severely hurt the expansion that Japan is in dire need of. Kobayashi Keiichiro says that the "rebuilding of the Japanese banking sector requires resolution of both the stock and flow problems surrounding banks, accumulation of non-performing loans (NPL's) on the stock side, and low profitability of the banking business on the flow side (Keiichiro)...