While the purposeful devaluation of the Japanese Yen is big news it isn't for the reasons proposed by OP.
1. Japan is getting militarily nervous about China and North Korea. The U.S. *is* Japan's defense policy and there is no way that they would
intentionally alienate us right now. Therefore, this new policy works for the U.S. or it wouldn't be in play right now.
2. Japan is the the largest creditor nation to the U.S. Devalue the Yen and it costs less to pay them back. The Japanese are willing to take that
hit to get the exports moving again. They are coming up fast on 20 years of hardcore stagnation. There were articles about Japan's lost generation
(as a result of long term recession) 10 years ago. The last 10 years haven't helped the situation and it is time to try something new.
3. The U.S. isn't the only country that Japan lends to. Devaluation of the Yen will make credit from country to country cheap and easy which is
widely anticipated to assist in really boosting a world wide recovery from the past four years of ick.
Slightly different topic but for those who think that a global currency is a good idea, how has the adherence to the Euro worked for everybody so far?
Greece can have austerity or a severely pissed Germany because they share the same currency everybody has their noses in everybody's business. Bad
My last thoughts are about U.S. currency.
Devaluation would work for us in terms of paying back our foreign debt. It would negate the interest and cost us less in terms of real value.
Devaluation would boost our export ability the same as it would boost Japan's. Everyone says bring back the jobs, well, this would be the way to do
Devaluation would cause inflation. That would hurt old people but it would also do more than put a bottom under the housing market. There would be a
very fast (well at least as fast as the rate of inflation) rise in home values. The underwater no longer would be. People who want to sell to trade
up would be able to again and the whole housing engine would start to work again.
I thought the poster who talked about our currency as reserve in terms of our new found (refound) fuel producing status was interesting. It has been
the "petrol" dollar for so long and it is interesting to consider what thumbing our noses at the rest of the world in terms of fiscal policy and
paying debt means if we (and we are) are set to become the number one exporter of fuel by 2020.
In closing, I think the Japanese plan is generally good for people in the U.S. and the U.S. government. Not so good for the retired who will not be
able to get income in the "new' dollars. I have suspect for a while now that the inevitable decision is going to be to let the inflation come. Let
it be high but manage the rise so as not to have extreme panic and recognize that the older folks are going to bear the brunt of it. that's why they
will get to keep social security (with the newly proposed adjustment which has **less** of a cost of living adjustment) and my generation will not get
Here's hoping 2013 is a good year for the U.S.
edit on 26-12-2012 by watcher3339 because: i ended with 2012 meant 13. i will do that for the
whole month of january!