A "Ten-Sigma" Econo-Historical Event Tuesday, July 07, 2009Defying odds that dictate a likelihood of 1 occurence in every 1 billion universes, Japan has officially become the only country in the whole world in all of history to become trapped in a "permanent" deflationary death spiral.
Now, to arrest this tailspin mid-crash and save Japan, a truly unique nation which is, to repeat, the only country ever, in the entire history of the entire human world, to become permanently (twenty years and counting... sometimes it just seems like forever!) embroiled in a deflationary meltdown, Japanese authorities and Bank of Japan economists are considering abolishing cash to assist in implementing negative interest rates to save the economy.
And the magic, negative interest rate number that will save the benighted Japanese economy once and for all? 4%.
Four-hundredths of the whole number one... the most powerful mathematical concept on the entire planet, possibly even in the universe in toto.
Of course, Japan's fall off the deflationary cliff happened in spite of its massive and similarly historically-unprecedented stimulus efforts. It couldn't have possibly been because of it.
Proposals like these are the absolute perfect example of why economics should be abandoned in favor of rereading some history lessons. When you arrive at the historically original moment and you have no clue why, you may want to check your historical premises.