The issue of money and its results

Emissions - an instrument to which resort the central banks when they are no longer able to lower interest rates. This technique was applied by the central bank of Japan in 2001. The issue is the printing of currency to fill the financial markets currencies. The volume of currency in circulation increases, which reduces its value and leads to inflation.

With zero interest rates, the bank had to put into practice an entirely new level of policy to overcome deflation, which struck the national economy. Deflation - a significant drop in prices during a certain period of time. Inflation can have disastrous consequences for the economy, but deflation is no better. The reason for this phenomenon lies in the fact that the buyer is so reduces the costs that sellers have to lower prices.

In the first year of issue in Japan, the ratio of the dollar and the yen rose to 18,5%. This means that yen was much weaker against the dollar. Despite the negative experience of the Japanese government, the U.S. government has regularly resorted to the issue, which increases the risks for the dollar. So online forex trading is very sensitive to any economical or political news that occur in the world and the trader must be very open and must read to get all information that help him in trading.