Japan Goes “All In” On Quantitative Easing … Even though the Inventors of QE All Say It Destroys the Economy In the Long-Run

Has Japan Just Signed Its Own Death Warrant?

Japan just went all-in on quantitative easing.

Bloomberg reports:

The Bank of Japan’s expansion of record stimulus today may see it buy every new bond the government issues.

The BOJ said it plans to buy 8 trillion to 12 trillion yen ($108 billion) of Japanese government bonds per month under stepped-up stimulus it announced today.

***

The central bank is already the largest single holder of Japan’s bonds, and the scale of its buying could fuel concerns it is underwriting deficits of a nation with the heaviest debt burden. The BOJ could end up owning half of the JGB market by as early as in 2018, according to Takuji Okubo, chief economist at Japan Macro Advisors in Tokyo.

Kuroda knows when to go ALL in,” Okubo wrote in a note. “The BOJ is basically declaring that Japan will need to fix its long-term problems by 2018, or risk becoming a failed nation.”

Indeed, the architect of Japan’s quantitative easing program said that QE harms the economy in the long-run.  The original inventor of QE  – and the former long-term head of the Federal Reserve – say that QE has failed to help the economy.

Numerous academic studies confirm this.  And see this.

Economists also note that QE helps the rich … but hurts the little guy. QE is one of the main causes of inequality (and see this and this).    And economists now admit that runaway inequality cripples the economy.  So QE indirectly hurts the economy by fueling runaway inequality.

Postscript:  Japan almost appears to be acting suicidally these days.

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  • David Mowers

    Who cares about anyone but the super-rich, government employees and multinationals?

    No one matters but those.

    • Zug Zug

      Fuck Satan

      • David Mowers

        In Celto-Sumerian, “Satan,” can mean either, “Black Fire,” or the “Lord of Black.”

  • jadan

    Japan has to do something. Gorbachov said Chernobyl brought down the USSR. Fukushima is stressing Japan to the breaking point and it’s 4x worse than Chernobyl. It is the worst industrial accident in history. So Japan has to do something, and stimulating the economy is an obvious move. It depends on what bonds the central bank buys. If it buys bonds from localities trying to clean up the radioactive mess, this would be a big stimulus……

  • Zug Zug

    Get ready for the burt years coming

  • Mary Holloway

    Of course they did , We ended “OURS” and are making them take up the slack. Smoke and Mirrors people! Somebody has to loan the money to keep the fiat system going. Basically the FREE WORLD can never stop quantitative easing.

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