Monday, June 3, 2013

Will Japan's Policy of Massive Inflation Lead to Prosperity?

Paul Krugman thinks Japan's inflation is good news. I beg to differ. My thoughts are more along the lines of David Howden. In his new essay "Japan's Easy Money Tsunami" Howden explains that the ultimate consequences of monetary inflation are always the same: decreased purchasing power of money and the business cycle:

However happy people have been about higher stock prices, eventually the economic effects will be harmful; indeed the recent stock price crashes foreshadow still more troubles to come.
He notes that Mises had the analysis correct way back in 1912.

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