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Do you think the Bank of Japan can get the economy out of deflation?

8 Comments

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No, ofcourse not.

-2 ( +1 / -3 )

That's not the difficult part. Creating inflation is easy. All you've got to do is print enough money. The difficult part comes when there's TOO MUCH inflation, and in order to tone it town, you've got to reduce the money supply. This will necessarily increase interest rates, which will make the INTEREST on government debt more than yearly revenues.

This is the kind of thing that makes economies and societies go the way of mad max.

These dudes are really playing with fire here.

2 ( +3 / -1 )

Qute possibly, but at what ceventual cost to Japan's economy? Printing money by BoJ coupled with deficit spending by LDP will destroy the current safe haven status.

-1 ( +0 / -1 )

Like gaijinfo said, creating inflation is the easy part - just print money. The more concerning issue is whether wages will grow in tandem. Considering that median wages have fallen back to the levels of the early 2000's, it's not looking good..

1 ( +1 / -0 )

These dudes are really playing with fire here.

gaijinfo -- spot on. Creating inflation merely by printing more money, like you said, and spending wildly on pork-barrel projects is not a long-term solution. It simply masks the underlying problems in the Japanese economy that caused deflation in the first place and does not create the pressure needed to re-structure the economy. So in two years or so, the country'sdebt to GDP ratio will be well over 250%, and the cost of needed imports, like fuel and food, will have gone sky high due to the weaker yen. Which will eat into people's already razor-tight budgets. Then what do they do?

-1 ( +1 / -2 )

Just Google Kyle Bass and you can get a good idea of what can happen if inflation and maintaining the economy does not work out...

Of course, take it with a grain of salt and also listen to what Jesper Koll has to say.

0 ( +0 / -0 )

If these idiots in the BOJ get inflation happening they may not be able to stop it & it wont take much & the costs to service debt will SKYROCKET 100 of percent becuase the interest is so low now.

But honestly Japan seems like it headed to self destruct whichever way it goes as its NOT tackling the real problems just ignoring them, they dont seem to understand that doing NOTHING about problems is in fact DOING something ie NOTHING still has consequences!

-1 ( +0 / -1 )

Just Google Kyle Bass and you can get a good idea of what can happen if inflation and maintaining the economy does not work out...

Kyle Bass's Japan fund is off 60 percent. He's been burning through investors' cash big time ever since taking a short position on Japan. They call him "the widow-maker."

Constantly Bass been predicting Japan's collapse, and then when it doesn't happen, he just pushes back the date. I'm baffled as to how he gets away with it, seeing that so much of other people's money has been lost.

-1 ( +0 / -1 )

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