The Bank of Japan strongly expects that the action taken by the Ministry of Finance in the foreign exchange market will contribute to a stable foreign exchange rate formation.
In the same article RIchard Nisbett, a psychologist who wrote the very excellent The Geography of Thought, shows how people will skew the results.
The findings will undoubtedly please those parents who already send their children to good schools, drive them to violin lessons in the afternoon, and then drag them around museums at the weekend. "So you haven't wasted your time, money and patience on your children after all," Nisbett says.
A lot of parents really want to believe that nurture is really important, so they are very quick to jump to conclusions so "not raising kids in a poor, broken home is important but once you are richer nurture differences matter less" gets turned into the parenting fallacy of "this study supports nurture, and therefore you are right to do everything that common sense tells us is good for children."
Tyler Cowen linked to two posts highlighting how high monetary policy uncertainty is today due to the high levels of inflation variability. The striking thing about these posts is that at our low inflation rate, the standard deviation of inflation is just as high as it was during the 70’s.
Using the month on month changes of inflation (bottom of top chart) instead of year on year changes (top of top chart) we see inflation variability spiking in mid 2006 rather than early 2009. Furthermore, the comparison the blogs make to the 70’s glosses over that by very similar measures, inflation uncertainty was much higher in the 50’s.
Of course, this may just be due to the crazy adjustment from the post war economy, so the policy uncertainty of the 50’s was probably low despite high the variability of inflation.
The high level of inflation volatility and therefore policy uncertainty can help explain why there are deficit hawks and gold bugs with nominal ten year yields at 2.6%. Ignoring the increasing deficit, the US treasury is going to have to roll over 2.5 trillion dollars worth of debt* in the next year alone, so maybe there is something to be uncertain about.
*To look this up for yourself, go here. Download the excel file and look at marketable debt. There are over 1.7 trillion dollars worth of Treasury bills and .74 trillion worth of Treasury Notes payable in the next year. The amount of inflation adjusted notes coming due is under 40 billion and there are no long term treasury bonds coming due.