The Phaserl


Absolutely Not. Not Under Any Circumstances: Japan’s Coming Debt Collapse

by Tres Knippa, Dollar Vigilante:

As expected, the Liberal Democratic Party (LDP) won a majority in the Upper House in Japan Sunday night. The market has responded with a bit of a yawn in Yen and JGB futures. Now we get to see Shinzo Abe fire the “third arrow” of his economic plan.

For those who have not been following the day to day musings from Japan, the “Three Arrow” approach starts with a huge surge in monetary policy (check), an expansion of fiscal stimulus measures (check), and now the third arrow will be some structural changes in the Japanese business landscape (lower corporate taxes, international trade agreements, and increased market led competition in certain sectors of the economy). Let me state this clearly so there is no doubting my opinion on this matter. What is going on in Japan is an experiment. It is an experiment that has no basis in economic history.

It is taking the experiment Ben Bernanke is currently trying in the US and it is doing it on a much grander scale in Japan. It’s Kamikaze-QE!

Read More @ Dollar Vigilante

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