The world isn't in a depression. The US is in a boom.
Only Japan needs to pump. That means just give currency away free to Japanese and send out a directive to banks that they won't convert currency to demand deposits.
We don't have free trade in the world. Most trade is inhibited by tariff barriers. Notably the US has many tariffs. We don't look at them in that way because we were first in putting them up.
The trading system isn't likely to change and the elimination of floating currencies is impossible. Bretton Woods attempted to fix currencies and it failed. You can't stop free markets. Floating currencies are the most efficient way to adjudicate between nation's value output.
Cheap goods from Asia or cheap labor is the reason why Asia is causing so much perceived trouble worldwide. All nations depend upon a continuing stream of both and if Asia is having growing pains so that the supply of them is interdicted, then other nations will suffer. In particular, their labor costs will rise and make them uncompetitive. Few look at the benefit of Asian sweat shop labor from the viewpoint that it takes the heat off operators like the FED.
How does one quantify order or disorder. Trying to do that in physics is difficult enough. In economics it seems people are best off when there is the perception of disorder because people remain cautious.
Nothing happened in 1985. I know, I was heavily involved then with the markets. It was the beginning of an excellent stock market bull run. I recall the press making a lot of hay out of non-events, but so what? Currency movements of that time don't show much significance on a long term chart. The G7 didn't succeed. The charts prove it. Maybe the author thinks G7 succeeded in scaring speculation from driving currencies to wilder heights, but that's just a supposition. G7 is helpless. When the market wants to move $21 billion won't buy two days respite. Well, someone says that the Japanese got something for $21 billion sold T-bills. They didn't get the intent of the sale. They got pieces of paper that they can roll off a printing press. If they would take the yen notes, get a dump truck, haul them to downtown Tokyo, dump them on the street, and have a guy yell, "free money", then they would start solving their tempest-in-a-teapot problem. |
