Posted on 04/04/2013 6:25:20 PM PDT by whitedog57
Edited on 04/04/2013 6:58:10 PM PDT by Admin Moderator. [history]
The Bank of Japan unleashed the world’s most intense burst of monetary stimulus on Thursday, promising to inject about $1.4 trillion into the economy in less than two years, a radical gamble that sent the yen reeling and bond yields to record lows.
The reaction in bond markets? The Japan sovereign yield curve fell over the past week, more than the US Treasury actives curve.
...
The BOJ plans to purchase 7.5 trillion yen ($77.8 billion) of bonds a month and double the monetary base, which includes cash in circulation, in two years. That exceeded economists’ median estimate of 5.2 trillion yen a month and is the biggest move since quantitative easing began in 2001. It’s an initiative to end two decades of economic stagnation and 15 years of deflation.
Here is a chart of Japan’s asset purchases to date. Oh, they have already been doing Fed-like asset purchases!
And Bank of Japan is even buying Japanese Real Estate Investment Trusts!
Deflation is evident in their housing prices.
I agree with Gross. Japan needs to generate aggregate demand, not just inflation. And unless Japan has aggregate demand growth, they won’t see consistent inflation of 2%.
I hope flooding the market with Yen helps Japan grow again. But like this train in the photo below, it will be a tough slog.
See charts at link.
China, EU and the USA all just print more money when needed, why not Japan?
It’s all part of the new world order!
The only people being hurt are the ordinary people who are not invloved in investment banking or government.
Ask people in Cyprus about how it all ends.
Nikkei was up 500 a bit ago while Hang Seng is down 425. Quite the divergence.
At last! The penultimate test of the Keynesian “Prime the Pump” speculation.
Ideas that never work are the lifeblood of Liberals.
Post them here.
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