Japan To Up Funny Money Production Line
Bill Quick

Monetary “regime change” for Japan, as central bank boosts inflation target, ups asset buying – The Washington Post

TOKYO — Japan’s Prime Minister Shinzo Abe declared a “monetary regime change” Tuesday as the central bank bowed to government pressure, setting a 2 percent inflation target aimed at helping the country emerge from its prolonged bout of deflation.

“This opens a passageway toward bold monetary easing,” Abe told reporters after the Bank of Japan and government jointly announced the inflation target and plans for “open-ended” central bank asset purchases similar to the strategy followed by the U.S. Federal Reserve to keep market interest rates low.

The Japanese economy, mired in a two and a half decade depression, moves toward entering the endgame.

Posted in Economy, Japan permalink
Bill Quick

About Bill Quick

I am a small-l libertarian. My primary concern is to increase individual liberty as much as possible in the face of statist efforts to restrict it from both the right and the left. If I had to sum up my beliefs as concisely as possible, I would say, "Stay out of my wallet and my bedroom," "your liberty stops at my nose," and "don't tread on me." I will believe that things are taking a turn for the better in America when married gays are able to, and do, maintain large arsenals of automatic weapons, and tax collectors are, and do, not.

Comments

Japan To Up Funny Money Production Line — 6 Comments

  1. China. Japan. The US. Europe. Each one in turn steps up buying their own government bonds to “keep interest rates low”. It appears the best way to make money is to buy helicopter stocks because they’re going to need a whole new fleet of them to keep this round of competitive devaluations going.

    So here we are watching the greatest bubble ever, socialist government bonds, inflate ever larger. There are a lot of pins out there and indeed Japan is the most likely to be the first to go POP. It won’t be the last. I expect Japan will be the catalyst for a whole series of contagions of asset deflations in government bond markets globally.

    Endgame, indeed.

  2. It’s a vicious infinite decline. When a lot of national economies are devaluating their currencies, those that don’t, in a global economy, are at a competitive disadvantage — so the situation deteriorates. The currency wars are spreading apace: Please Welcome UK To The Global Currency Wars. And it’s not just a bond bubble, but also equity and commodity bubbles, propped up by fiat devalued currency, all ready to pop. When it happens, trillions in assets will simply disappear, in a puff of smoke.

    Japan may be first, but China is not far behind, what with ‘ghost’ apartment buildings, malls, trains, and entire cities; 10’s of thousands of ‘demonstrations’ (i.e., local rebellions) a year, more spent on internal security than the military, and a class of corrupt political ‘elites’ buying gold and moving funds off-shore: [Corrupt] Chinese Politicians Are Buying Billions In U.S. Real Estate. I have a suspicious nature, and I suspect the Chinese elites are preparing their escape.

    • China has a huge stash of US dollars – more than a trillion bucks, by many accounts. I think they aren’t about to let that become toilet paper while they hold it, so they’re trading it back to us for real property, assets, and power/influence in our domestic politics, as the Arabs have learned to do so well.

  3. That’s what I mean about contagion. I am not sure about the trigger mechanism but I think that Japan’s collapse will trigger lots of problems in China. Perhaps just from the perception that demographically China is heading down the same road as Japan. Plus if the Japanese repatriate their investments out of China that may trigger a panic in China. If China allows that. Otherwise, could that lead to war?

    The next step after China is collapsing commodity prices. That a means Aussie Dollars and their property bubble will deflate. Then other commodity producers like Canada, Brazil and Middle East oil producers get hit. Especially if the US can continue its domestic energy boom.

    The wild card then becomes government reaction and policies. Do these countries go all in on the money printing, deficit spending and Central Bank bond buying? At what point do bond holders get spooked when their bonds yield next to nothing but inflation is heating up, especially food inflation. China, Japan and the ME theocracies are very big importers of food.

    Interesting times.

  4. We already have a parallel to the Great Depression with the Great Recession, is it any surprise that the rush to devaluate pretty much follows what happened in the ’30s? Fortunately, academic/chairman Bernanke is an expert on that era and the mistakes that were made, so he’ll know exactly what to do. The only question is where he’s going to find another Hitler and another invasion of Poland to kick off the process, world war, that really cleaned up the mess – the hard way.