[FoRK] inflation / deflation etc. (resp. to Andre)
jbone at place.org
Mon Sep 28 04:48:32 PDT 2009
On Sep 27, 2009, at 1:17 PM, Jeff Bone wrote:
> (To be honest, though, *nothing* comes close to being a valid
> analogy to what we're seeing here today. It's just too unique in
> too many ways.)
Ken asks: is this true? And references Japan...
Japan's not a good analogy for many reasons, but the biggest factors
that are unique in this situation are:
- the USD's historical role as the de facto central currency for
- the degree to which US treasury debt has been used as an
inflation sink by others
These factors, along with others, make this a truly unstable situation.
Re: Andre, I agree that the central bank's bias will change in the
future; but I worry that by the time this happens, its ability to act
effectively may already be significantly limited. It's all about
timing the tipping point --- with this one being more delicate than
previous examples, and even in those previous examples the Fed's
timing is suspect.
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