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The 1971 Nixon shock from an evolving Japanese perspective


Nippon.com/Tsuchiya Hideo

Repost from 8-23-2021

black and white photo of Japan's Emperor Hirohito signing document

“For the past half century Japan has consistently sought to keep its currency from rising against the dollar, fearing the effects of a strong yen on the export sector. Tokyo’s monetary policy has harmed the country, giving rise to the bubble in asset prices in the 1980s and subsequently leading to persistent deflation. As a result, we are now living in a ‘cheap Japan.’”

USAGOLD note: The financial media have been awash in retrospectives and deep-dive analysis of the Nixon shock in 1971 from an American standpoint. This article is a bit different in that it explores in detail the dollar devaluation from Japan’s perspective. Though the government deplored the move as something that would hurt Japan economically, Emperor Hirohito met with his finance minister to point out that a strong yen might indeed help the country. Fifty years later, this fascinating article ends with a timely question: “Will the day come when the people of Japan share this view?” Should Japan, by some turn of events, decide to accept his view, it could have enormous implications for the dollar and by proxy for gold ……


Image: Japan’s Emperor Michinomiya Hirohito signing a document, 1946

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