Thursday, December 10, 2009

Japan Printing Money?

Just had a sudden through today - perhaps I haven't though this out enough yet, but why does Japan not print some more Yen? Look at the "crisis" it is complaining about - deflation, soaring value of the Yen, giant debt. What does printing money do? It causes inflation, devalues the currency, and give the government more money to play around with - as long as the value of the money doesn't crash. If Japan prints Yen in controlled lots, making it clear to the world that it is only going to print Yen to devalue it to a certain point, it seems like it could be a beneficial move for the country and the government. What am I missing? Why are they not printing more Yen?

Edit: I realise that the national bank in Japan may be "printing" money in that it is buying up government bonds, but what I am talking about is just printing and giving the money to the government. This should be even more effective, as this money becomes "permanent" in that there is no obligation to return and destroy the money later on.