On Japan, Stimulus, Currency Depreciation and Inflation

I have heard a lot of doomsday predictions regarding Japan over the last twenty years. None of them have panned out as yet. This year, we are hearing a lot more as a result of the Japanese Central Bank's intention of 'monetizing' the government's debt and because of the government's high level of debt relative to Japan's GDP. Is any of this stuff sensible investment advice?
The short answer here is no, it is not good investment advice . And the reason the doomsday scenarios are wrong is because they hinge on a faulty model of the monetary system and its implications for inflation.
The standard view is that Japan has increased its government debt so much that the country has no other option than to pursue an inflationary monetary policy to devalue the value of the Yen and precipitate a wa...


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