Coming To America: Bank of Japan’s Godzilla’s Approach to Monetary Policy

Japan’s economic woes are well documented. One of the largest concerns is the challenge of attempting to build solid monetary policy, while dealing with an aging population. The central bank of Japan(BOJ) has been attempting, for decades now, to boost its economy with some loose monetary policy. The results are in: It has not worked…at all. Yet, they are continuing with the same philosophy.

In the Bank of Japan’s zeal to properly manage the yield curve, they have done something that is breathtakingly insane: The Japanese Government debt is 238% of Japan’s GDP. Yes, you read that correctly. Also, to make this accomplishment more magnificent: The Bank of Japan owns 50% all of Japan’s Government debt. Before you look upon this marvelous feat with sanctimony, please note the United States embraces a similar monetary policy, as the Federal Reserve’s balance sheet grows exponentially each day. The Federal Reserve is the largest domestic holder of United State’s Government debt. I agree with MN Gordon: The Fed will own 50 percent of US Government’s debt.

So, if you are a citizen of the United States, you can take comfort that similar tactics could be welcomed here by The Fed. Many of these central banks embrace similar highly inflationary tactics, yet economists all lament on “income inequality”. Good luck saving for retirement in this environment.

In my opinion, this article by MN Gordon is brilliantly written, and it’s highly thought provoking, as you can read it here:

Please follow and like us:

Leave a Reply