Japon Quiebra Ingles
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Publicado: 21 de enero de 2013
THE JAPAN DEBT TRAP AND DISASTER HORIZON...
Guillermo Barba/Goldsilver.com
A few weeks ago the Bank of Japan announced its latest round of monetary stimulus, the third in four months, and thefifth of 2012.
The Bank of Japan (BoJ) declared a monetary expansion of 10 trillion yen, putting its cumulative asset purchases and holdings at a whopping 101 trillion yen.
This is to a degree,Japan's version of the Federal Reserve's Latest Program (QE4), announced last month.
Through QE4 the Fed will be printing (debasing) a scheduled 85 billion dollars a month through the purchase ofTreasury bonds and mortgage-backed securities (MBS). It is worth noting that if applied as stated, the Fed's balance sheet will approach $4 trillion by the end of 2013.
The BoJ's recent measure, ofcourse, is nothing new, but it does allow us to foresee the Fed's own path: once you fall into the trap of monetary creation, you cannot escape its fate. Governments will follow the same path to theend, which needless to say, will be severe for unsuspecting majority.
The same applies to the "cancer" of fiscal deficits: If the combination of deficit spending and monetary stimulus were the answer,Japan would have a robust economy and not have fallen victim to two "lost decades" continuously. Further evidence to the Keynesians and monetarists (for whom the hole is never deep enough) that thefiscal and monetary exit will not go unpunished.
A few data points suffice to show this trend. By September last year, the BoJ held a 11.1% of the total outstanding Japanese government bonds,according to its own figures. For the first time in history, its holdings of government debt alone exceeded a record 100 trillion yen.
In practice, 11 out of every 100 yen in Japanese debt werecreated out of nothing by its own central bank to finance a rapidly growing deficit and cover the government's borrowing costs. The trend has only accelerated over the past years.
The BoJ has attributed...
Guillermo Barba/Goldsilver.com
A few weeks ago the Bank of Japan announced its latest round of monetary stimulus, the third in four months, and thefifth of 2012.
The Bank of Japan (BoJ) declared a monetary expansion of 10 trillion yen, putting its cumulative asset purchases and holdings at a whopping 101 trillion yen.
This is to a degree,Japan's version of the Federal Reserve's Latest Program (QE4), announced last month.
Through QE4 the Fed will be printing (debasing) a scheduled 85 billion dollars a month through the purchase ofTreasury bonds and mortgage-backed securities (MBS). It is worth noting that if applied as stated, the Fed's balance sheet will approach $4 trillion by the end of 2013.
The BoJ's recent measure, ofcourse, is nothing new, but it does allow us to foresee the Fed's own path: once you fall into the trap of monetary creation, you cannot escape its fate. Governments will follow the same path to theend, which needless to say, will be severe for unsuspecting majority.
The same applies to the "cancer" of fiscal deficits: If the combination of deficit spending and monetary stimulus were the answer,Japan would have a robust economy and not have fallen victim to two "lost decades" continuously. Further evidence to the Keynesians and monetarists (for whom the hole is never deep enough) that thefiscal and monetary exit will not go unpunished.
A few data points suffice to show this trend. By September last year, the BoJ held a 11.1% of the total outstanding Japanese government bonds,according to its own figures. For the first time in history, its holdings of government debt alone exceeded a record 100 trillion yen.
In practice, 11 out of every 100 yen in Japanese debt werecreated out of nothing by its own central bank to finance a rapidly growing deficit and cover the government's borrowing costs. The trend has only accelerated over the past years.
The BoJ has attributed...
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