World View: After 20 Years of Deflation, Japan's New Leader Will Try Devaluation

This morning’s key headlines from GenerationalDynamics.com

• Silvio Berlusconi, 76, to marry stunning 27 year old brunette
• Thousands of Palestinians flee Syria’s Yarmouk refugee camp
• After 20 years of deflation, Japan’s new leader will try devaluation

Silvio Berlusconi, 76, to marry stunning 27 year old brunette

Francesca Pascale with Silvio Berlusconi

European political leaders were horrified last week when Italy’sformer premier Silvio Berlusconi said that he would make a comebackand seek a fifth term as prime minister. Germany’s chancellor AngelaMerkel and France’s then-president Nicolas Sarkozy were delighted whenhe resigned last year, because they blamed him for the financialcondition of Italy, and because they felt that his “bunga bungaparties,” always attended by gorgeous women, some of whom he(allegedly) slept with, sullied the names of honorable politicianseverywhere. Now that he may return again, they can barely concealtheir disdain.

But on Monday, 76 year old Berlusconi had a different kind ofannouncement: That he was engaged to be married to a stunning 27 yearold brunette beauty, Francesca Pascale. Pascale was a founding memberof a support group called “Silvio, we miss you.” She has previouslysaid the three most important things in her life are her family,politics and Mr. Berlusconi. It’s said that she was jealous of theother women in Berlusconi’s inner circle.

Berlusconi, a billionaire, announced the engagement on Monday on a tvtalk show:

“It’s official, I have got engaged to FrancescaPascale and finally I feel less lonely. There is a 49 year agedifference between us. She is a beautiful girl on the outside andeven more beautiful on the inside, of solid moral principles, sheis very close to me, she loves me and I feel the same way. Mydaughter Marina appreciates her and loves her very muchtoo.”

Spiegel and Iconcast and Christian Post

Thousands of Palestinians flee Syria’s Yarmouk refugee camp

The Yarmouk refugee camp in southern Syria, home of hundreds ofthousands of Palestinian refugees of the 1948 Arab-Jewish war, andtheir descendants, was bombed by president Bashar al-Assad’s air forceon Sunday, as we reportedyesterday. On Monday, rumors that Syrian government forces weremassing for an attack sent thousands of residents of the refugee camprunning south across the border to Lebanon. Yarmouk residents aresplit between pro-Assad and anti-Assad forces, and there have beensporadic gunfights between the two groups for months. LA Times

After 20 years of deflation, Japan’s new leader will try devaluation

Japan’s economy has been in a deflationary spiral ever since the huge1980s real estate and stock market bubble began to crash in 1990. TheTokyo stock exchange index is still down 75% from its bubble high atthe end of 1989. Now, Japan’s newly elected leader, Shinzo Abe, plansto make a full-scale effort to end the deflation by pressuring theBank of Japan to use quantitative easing to flood the market withmoney. This will devalue the yen, relative to the dollar and othercurrencies, and make Japan’s exports cheaper on the world markets.Massive amounts of quantitative easily in the U.S. and Europe have notbeen successful in reversing deflation or in growing the economy, somany people believe that it won’t be effective in Japan either. It’sworth pointing out here that macroeconomic models have beenconsistently wrong about almost everything for the past six years.Even before that, economics did not predict and can’t explain the techbubble at the end of the 1990s, the real estate bubble, the creditbubble, the 2007 credit crunch, or anything that’s happened sincethen, and they don’t have a clue what’s going to happen in 2013. Nowthey’re going to repeat some of these same policies in Japan, whenthey don’t have the vaguest clue what’s going there either. Telegraph (London)

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