On that basis Mr White thinks the Fed was right to pursue the first round of quantitative easing, since nominal GDP was falling, but wrong to pursue a second round with activity recovering.

Partly as result of such entrenched deflation, and the associated waning of risk appetite, nominal GDP in Japan is at its lowest level since the first quarter of 1991.

Meanwhile prime lending rates, at 7.47%, remain bizarrely divorced from nominal GDP growth, which stood at over 22% year on year in the second quarter.