The Phaserl


The Experiment that Will Blow Up the World

from ZeroHedge:

Japan’s aging population needs rising prices like a hole in the head. The more “successful” Mr. Kuroda becomes in forcing prices up, the less money people will have to spend and invest. The economy will weaken, not strengthen, as a result. The advantages the export sector currently enjoys are paid for by the entire rest of the economy. moreover, even this advantage is fleeting. It only exists as long as domestic prices have not yet fully adjusted to the fall in the currency’s value. If one could indeed debase oneself to prosperity, it would long ago have been demonstrated by someone. While money supply growth in Japan has remained tame so far, the “something for nothing” trick implied by the BoJ’s massive debt monetization scheme is destined to end in a catastrophe unless it is stopped in time. Once confidence actually falters, it will be too late.

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1 comment to The Experiment that Will Blow Up the World

  • rich

    For Whom Are the Japanese Leaders Kuroda and Abe Making Their Monetary and Fiscal Policy?

    The expansion of the BOJ asset purchase program was timed to start with the end of the Fed’s asset purchase program. I mean, come on. Could it have been any more obvious?

    There is no big question that the Bank of Japan has been acting in concert with the Fed for the better part of this century at least. And politically, Japan is a client state of the US.
    And reader know that I have a long standing observation that one of the great difficulties in recovering from the long period of Japanese economic stagnation since the collapse of their great real estate and stock market bubble has been the inability to clean up their interlocking financial system dominated by industrial combines called keiretsus and a closely associated political system run by a surprisingly well connected minority of insiders.

    Beyond that I wondered why was Japan pursuing the purchase not only of domestic equities and non-sovereign paper, but foreign equities as well with their very large pension fund? Are these intended as ‘investments?’ Or are they a form of cross subsidies in support of a more global agenda?
    Here is a thoughtful discussion of Japanese quantitative easing from just a few weeks ago from Sober Look. As you can see, the consensus was running heavily against an expansion, making the surprise from BOJ the day after the Fed taper even more of a surprise.

    “With wage growth remaining sluggish (particularly for non-union workers), rising import costs could undermine consumer demand – particularly in the face of higher consumption taxes. Given these headwinds, there may be sufficient political pressure to put the BoJ into a holding pattern.”

    I am not sure of all the specifics of what is happening in Japan, but I am becoming increasingly persuaded that the Anglo-American financial cartel and some of its client states are engaging in an intensifying currency war with regard to the international dominance of the dollar.
    This extends not only to the dollar as the primary benchmark for international valuations, but also to the more compelling power that such an instrument, in the hands of a single governmentally affiliated entity, provides to those who wield it to set international and domestic policies that go far beyond mere terms of trade.

    So I think it is fair to ask for whom the Bank of Japan and their political leadership are making some of their policy decisions. And further, it is incredibly naïve not to ask the same questions about the Federal Reserve and the political leadership of the US.
    Money power is political power, in every sense of the word.

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