Re: Is Bernanke Behind The Rallies? Query to Barkley

[Warren Mosler <mosler@xxxxxxxxxxxxxx>]

--- "Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx> wrote:
> My point is that lowering the exchange rate of the
> yen will only
> contribute to deflation because it increases the
> dollar denominated
> trade surplus which Japan must reinvest in dollar
> assets, thus shrinking
> the yen economy.

The way I see it, when the boj buys $US, for example,
it increases net yen denomimated financial assets of
the non govt sector, just like any other form of net
govt. spending.  It also increases its net savings of
$US, so the process
in fact could be said to be importing US 'inflation'
or exporting Japan's 'deflation?'

warren


=====
Warren Mosler, www.mosler.org
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Primary email contact:  mosler@xxxxxxxxxxxxxx

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