(NY Times) The U.S.-Japan inflation correlation chart–Following Japan's Trajectory Thus Far
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I would have thought that Japan as a major industrial power was dependent on imports, and that the rising price of raw materials and energy would counter-act the tendency to deflation. Clearly this is not happening. I have another query: surely inflation as a result of QE II will feed into prices and cause the US graph to return to an upward trajectory?
[blockquote] surely inflation as a result of QE II will feed into prices and cause the US graph to return to an upward trajectory? [/blockquote]
Only if QE 2 is big enough, but all indications are it isn’t. Extra help from fiscal policy would help, but given the incoming Congress, that ain’t gonna happen.