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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: pater tenebrarum who wrote (60988)1/23/2001 7:23:05 PM
From: KyrosL  Read Replies (4) of 436258
 
A Japanese type deflation is not assured in the US. I used to believe this a couple of years back, but after watching the Fed in action, I no longer think so. One clue is that some US economists are advising Japan to create deliberate inflation to get out of its liquidity trap. I think these economists will have a much larger influence in the US, when deflation threatens. Also, the US consumer culture and relatively young work force make a Japan-like deflation much less likely. So, I believe that a more likely outcome in the US is inflation. After all, right now the US has become a debtor nation, so inflation may be regarded as less of a problem than it was back in the eighties. Of course, this will debase the dollar as a reserve currency, but that's a problem to be faced by the next generation.
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