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>-----Original Message-----
>From: bruceb@xxxxxxxxxxxxx [mailto:bruceb@xxxxxxxxxxxxx]
>Sent: Wednesday, August 12, 1998 10:35 AM
>To: Omega List
>Subject: RE: DEFLATION CRISIS & Asia
>
[snip]
>
>As for Japan, there has been an economist (I want to say Paul Krugman, but
>I'm not sure that's right) who has been advocating that Japan start
printing
>money and induce inflation for several months now. It probably would've
>worked if they had done it at the beginning of the year, but unfortunately,
>their window of opportunity has expired. The Yen has fallen so low now
that
>printing more would cause a panic.
>
If *you* can work out that printing more Yen would now be a cause for its
further devaluation, then so can the markets. Any short term positive
effects which may have occurred if it had been done at the beginning of the
year would have been quickly reversed, resulting in the action you now think
is more likely.
If the whole financial edifice is going to deflate (due to the fact that too
much has been borrowed from the future) then it will deflate on bad news, or
it will deflate because the "good news" has been artificially contrived.
Markets can't be tricked.
Regards,
Iain Bell
iain@xxxxxxxxxxxxxxxx
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