Why I don’t read newspapers, reason #4 trillion something: you don’t learn economic principles from reading articles such as the following. You are left as confused as before.

Thanks to the market intervention, the dollar at one point rebounded to near ¥80. The question is whether the trend of a cheaper yen will last.

via Taming the yen | The Japan Times Online.

Has such intervention worked in the past?  Has such intervention created lasting trends in the past? Why does the writer not investigate this? Given the financial crisis in Europe, the downgrading of the U.S. debt by Moody’s, and the massive damage to the Japanese economy from the earthquake/tsunami/nuclear crisis, all situations which preceded the intervention and which will continue from the foreseeable future, what do you think, dear reader? Do you think the cheaper yen trend will last?

HA! It didn’t last 24 hours! I was watching the Yen/Pound sterling rate closely. It went from 125 to 130 (briefly) before dropping to 128 where it has hovered since.

This is a currency war, with each country’s government and central bank working together to try and make THEIR currency cheaper than the others. It’s a zero-sum game.

The writer finishes with,

To dispel deflation, vigorously pushing reconstruction from the March 11 disasters is imperative.

Really? How will cheaper prices (deflation) for essential consumer and capital goods hinder reconstruction? Surely an argument can be made that it would help.