Expectations that Mr. Abe's Liberal Democratic Party, which came to power in December, would implement an aggressive monetary policy to end 15 years of deflation sent the currency tumbling.
Expectations that Mr. Abe's Liberal Democratic Party, which came to power in December, would implement an aggressive monetary policy to end 15 years of deflation sent the currency tumbling, a boon for exporters that had been struggling with a strong yen.
"I'm not sure you can break Japan out of deflation with just moving the currency, " said Jan Dehn, co-head of research at Ashmore Investment Management Ltd.
So why not then break free of the euro and have that deflation as a currency devaluation rather than an internal devaluation of wages?
FORBES: Yes, Of Course Cyprus Should Leave The Euro. Why Do You Ask?
Wanniski says the first wave of deflation to hit the U.S. was a result of the currency crisis in Thailand that spread to the rest of Asia in 1997 and severely affected U.S. commodity producers like hog farmers and oil drillers.
Three months later, Kan is faced with the dilemma of trying to spur growth without pushing those debts even higher, with the added complications of a surging currency and continuing deflation.
The price level can only be altered through a change in the value of money itself, and with the dollar at near all-time lows against gold and nearly every foreign currency, the presumption of deflation promoted by Sumner is laughable, and also sad.
FORBES: Scott Sumner, Gold, the Dollar, and Anti-intellectualism
Currency devaluation largely avoids dealing with the short-term negative consequences of debt deflation in favor of prolonging the period time that the bad debts remain embedded in the system.
However, because the Fed and ECB have both proclaimed that they are on hold from debt monetization and currency debasement, the same monetary environment that led to the pronounced deflation that occurred during fall of 2008 has arrived once again.
And for those who wish to avoid both inflation and deflation, what about a digital currency programmed to maintain stable prices, avoiding mischief by central bankers as well as the possibility of deflation?
WSJ: The Weekend Interview With Gavin Andresen: Bitcoin vs. Ben Bernanke
应用推荐