However, an easy monetary policy can also stimulate the economy through the exchange rate.
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Those who see higher prices said gold remains underpinned by easy monetary policy from global central banks.
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But many strategists argue that high government deficits and easy monetary policy may produce inflation down the road.
Mr Abe has backed the central bank's ultra easy monetary policy, which calls for pumping more money into the Japanese system.
With much uncertainty looming in the economy, we expect that easy monetary policy is here to stay for quite some time.
First, extraordinarily easy monetary policy by the Federal Reserve, Europe and Japan.
Easy monetary policy, which translates into negative real rates, does not just pertain to the U.S., but to Europe and emerging markets as well.
Again, the magnitude of what has happened is a result of fundamental errors made by the Federal Reserve and its overly easy monetary policy.
Easy monetary policy in America also creates the incentive for further speculative money to flow into emerging markets via carry trades and other strategies.
It may be that other, temporary forces, such as the lack of private borrowing or the Fed's easy monetary policy, are offsetting any worries about deficits.
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But easy monetary policy, by bringing forward spending from the future to the present, means that the ultimate adjustment of borrowing and spending will be even greater.
Now, Japan is going whole hog into easy monetary policy with Prime Minister Shinzo Abe strong arming the Bank of Japan to target a 2% inflation rate.
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Most think a prolonged period of easy monetary policy and a slow release of pent-up demand for durable goods and homes can yield growth of at least 3%.
Consider the millions of pounds of paper that the Federal Reserve will need to afford its easy monetary policy, which today further earned its latest epithet: quantitative easing infinity.
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To meet that 2% inflation target, Prime Minister Abe has put forth an aggressive ultra-easy monetary policy which will pump more money into the economy and also weaken the yen.
He said in a speech that the U.S. credit markets are beginning to see signs of strains due to the very easy monetary policy of the Federal Reserve in recent years.
But for the rest, the recovery in manufacturing and housing in swing states owes more to the rhythms of the business cycle and global conditions, or to broad-based federal stimulus and easy monetary policy.
Easy monetary policy is often friendly for stocks.
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If economic data coming from the U.S. starts to trend in a stronger fashion it would also lead to ideas the Federal Reserve would have to begin to back off on its aggressive easy monetary policy.
The Federal Reserve has maintained a super-easy monetary policy in the name of reducing the jobless rate and to reflate the housing market, but this has contributed to higher food and energy prices and thus reduced real income gains.
At the other are those who side with the IMF, which last week prescribed a course of fiscal retrenchment for the world, softened with a commitment by central banks to extended easy monetary policy and perhaps even more expansion of their balance-sheets.
The European Central Bank, the Bank of England and the Bank of Japan are all expected to stick to ultra-easy monetary policy at meetings this week, following on from reassurances by U.S. Federal Reserve officials that their stimulus program remains in place.
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The problem, of course, comes when easy monetary policy fails to fuel an economic recovery, which appears to be the ongoing case in Europe and could be heading toward a similar fate in the U.S. if the much-feared fiscal cliff causes a significant decline in already-tepid growth.
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Largely because of the Federal Reserve's easy-monetary policy, "there's a high, probably artificial demand for equity, " Mr. Travis said.
Because of two factors: First, easy domestic monetary policy.
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But, Volpon points out, internal demand was boosted by easy monetary and fiscal policy.
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Some investors had hoped the Fed would steer investors into extending their views on how long the super easy and cheap monetary policy would last.
While a Keynesian focus only on interest rates caused most observers to think of monetary policy as very easy, a Milton Friedman type monetarist might have argued that monetary policy was too tight for the circumstances.
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This is mildly positive news for America and Britain, whose central banks are determined to keep monetary policy easy as austerity bites.
The past four years of very easy U.S. monetary policy have been an underlying bullish factor for the raw commodity sector, including gold and silver.
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