Mental midget? 25 precent deflation!? What alternative universe do you live in? The chart shows that you are completely wrong. There was no 25 deflation in the CPI in Japan:
Schiff is a mental midget. He doesn’t even begin to grasp why Japan saw 27% deflation from 1998 through the end of 2008. Schiff stutters when asked to explain why Japan saw 6% deflation in the single year of 2003 where Japan printed an extra $53 Trillion Yen.
Not everyone on this planet understands the credit markets...a fatal flaw for anyone attempting to explain credit-based fiat economies without mentioning the destruction of credit availability.
Mental midget? 25 precent deflation!? What alternative universe do you live in? The chart shows that you are completely wrong. There was no 25 deflation in the CPI in Japan:
So exactly which Economic Think Tank or similar endeavor employs you?
Steve Keen over at DebtDeflation just published a great article on credit expansion vs monetary policy that is essential reading for anyone who wishes to understand more about this complex interplay.
To summarize his main point, it doesn't matter what the Fed does. Their ability to manipulate base money is dwarfed, by orders of magnitude, by the private credit markets. In fact, for the Fed to have any effect on inflation, they would have to expand the money supply by 50x!
We are locked in the grip of a classic debt-deflation cycle so well described by Fischer back in 1933. Neither fiscal spending nor monetary actions will have any effect until asset prices return to a sustainable level of income/debt service.