Bernanke Choppers make an appearance…in Japan

The facetious title of this piece refers of course to US Federal Reserve chairman Benjamin Bernanke’s well known reference to dropping bundles of cash from helicopters as a last resort to fight deflation.

Edward Hugh noted in a post here that “The government…have begun distributing 12,000 yen ($125) to each resident in March to encourage spending.” I’ve found a few reactions to this monetary action by the Japanese authorities:

How to Claim your 12,000 yen and Highway Holiday Discount

12,000 yen cash handout – vast majority would rather see it spent elsewhere…WhatJapanThinks.com

Paul Krugman visits Japan…Japan Economy News

Japan clears cash hand-out bill…BBC

Mr. Aso’s Cynical ‘Stimulus’…Far Eastern Economic Review

Japan’s godzillion-yen bond and stimulus spree, but will it work?…Financial Times

Such a measly sum(per individual) seems to me to be merely a token gesture. Of course, this seems to be what Bernanke in the US has been threatening for a while; to simply print cash and hand it out to the citizenry. The Japanese action is certainly not of the scale one might imagine when thinking of the Bernanke scenario. For that reason, it seems likely to be a non-event as far as the soundness of the yen as a currency is concerned.

But given the length of time that Japan’s monetary authorities have been using all the tools at their disposal to bring the country out of near deflation/outright deflation, one has to wonder whether the yen will be unmasked as having been debased to an extreme degree.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: