Indeed, should central banks get their timing right and succeed in reflating
the economy, that may simply allow governments to deflect any searching examination of the inequities that presaged overinvestment and excessive borrowing in the first place.
In the second quarter of 1998, Finance Minister Anwar Ibrahim dramatically changed course again, turning away from contractionary measures and instead reflating
the economy through spending policies designed to stem the downturn.
The BOJ has seen the first positive growth in November's core CPI (excluding fresh food), a substantially weaker yen and a strong pick up in bank lending to the real estate sector in the third quarter as strong evidences of a reflating
economy and has made clear its desire to mop up the excess liquidity that was injected into the banking system under the quantitative easing policy introduced in 2001.
While the economy is not yet in recession," Imirhe says, "it has come pretty close, which is why the government is now ready to cautiously start reflating
Suspensions can sag and need reflating
so if the car doesn't return to level within one bounce after a push on each corner look elsewhere or have it profes- sionally checked.
The return of growth: reflating
with equities and real assets - Having shunned equities for the perceived safety of fixed income in recent years, investors with long-term horizons will revisit the role of equities and other assets that offer the best ability to provide positive real returns during the continued road to economic recovery.
The mechanics of reflating
Europe and Japan will likely necessitate less expensive currencies, even from the seemingly battered levels existent today.