Disinflation and the Dollar

In this season of giving thanks, I can count among my blessings the many readers who have shared their thoughts, comments and concerns about my columns. One observation I've made is that whenever readers ask when something is likely to occur, the opposite is more likely to materialize. We all wanted to know where the top was in 1999, and everyone tried to call the bottom in 2001. That was a good use of mental capital, wasn't it?

More recently, questions about deflation and the dollar's strength have been piling up in my inbox, so I thought it might be useful to tackle these issues simultaneously from the perspective of the ongoing debacle in Japan. ...