They can spend a lot of money to try to slow it down, but that's all they're going to get to have a real turn in a currency.

You need coordinated intervention.

So you have to have several countries working together, ideally including the U.S.

That sends a big signal.

And you want policy moving in the same direction as the intervention.

So in this case, if they want a stronger yen, they would need to be raising interest rates by a lot more than what's currently expected in the market.

What's so important here is a multi dimensionality of the simplistic media approach is what about the Fed?

Forget about that.

They have to worry about the entire Pacific Rim.

They're getting a free lunch right now with enhanced exports.

Are you going there this summer, Paul? Everybody else is.

Going where?

Japan.

I know Warren Buffett told me about it. I know.

You can get a lot of sushi right now.

Yes, exactly.

The answer is there's a Pacific Rim impact.

What is it?

Right. So a lot of these countries compete with each other for the U.S., for Europe.

So Japan going down puts pressure on countries like South Korea, Indonesia, Philippines, Singapore, China to also have weaker currencies.

So Korea is making a lot of comments now that they're in some pain, [and] could see intervention in other countries across Asia, too.

So they're all going to be fighting against this trend, but it's a fight they can't win.

So, just keeping on top of that Japan story, we think about the U.S. exceptionalism from an economic perspective. That's been in discussion over the last 6 to 12 months here.

How unusual is it that you have a U.S. economy growing at the rate it's growing versus China versus Europe?

How unusual is that and how do you play that?

Well, it's not that unusual to see the U.S. is kind of the main engine of global growth.

And when that is the case, it is pretty normal that the U.S. equity market would be outperforming, that the dollar would be strong because foreign capital is coming here to invest in the U.S.

U.S. capital is staying here because it's more attractive.

What I think will be interesting as we look ahead to this summer, you saw the news, I'm sure, and you've already reported on, China this morning talking about having a policymaker session in July,

talking about additional stimulus elements probably before that, including rate cuts, etc.

Can they do enough?

So it's not one engine of growth, it's multiple engines of growth.

I'm skeptical.

I don't think they'll be able to pull it off, but they're going to be giving us more.

What does Japan's travails mean for American citizens?

How does it redound back to our listeners, our viewers this morning in America?

Well, again, the weak yen is a reflection of the broadly strong dollar.

The dollar is up against almost every currency around the world year to date.

So you do need to think about what is the strong dollar mean.

The strong dollar tends to be a pretty big headwind for emerging market equities.

So that's an area that already, you know, has idiosyncratic risk around China.

But now you have this broad macro risk as well.

The strong dollar is the Fed's best friend.

If the Fed is trying to get inflation back down to 2%, a strong dollar slows down U.S. growth by making our exports more expensive, less competitive overseas.

That tends to weigh on manufacturing, slowing growth, disinflationary that helps the Fed.

So again, back to intervention, the Fed doesn't want to help Japan here.

The Fed wants a strong dollar.

So it's good for getting inflation down.

It's bad for our exporters and it's bad for anyone looking at emerging markets right now for diversification.