politics

Gov't adviser not worried about temporary slowdown in inflation

16 Comments
By Stanley White and Yuko Yoshikawa

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16 Comments
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When government advisors say they are not worried when the phenomenon they predicted is not occurring, then it is time for Japanese to be worried. And so should Americans, Koreans, Chinese, and Europeans. The world needs an economically dynamic Japan. Please deliver it, Abe-san.

6 ( +6 / -0 )

Get those wages up...or don't give the companies a bigger tax break.

3 ( +5 / -2 )

When government advisors say they are not worried when the phenomenon they predicted is not occurring, then it is time for Japanese to be worried.

liarsnfools -- spot on. Translation -- "We've been selling you all on a target of 2% inflation in two years now, and are not going to even come close, but have faith in us anyway as we continue to spend like drunken sailors, and burden your kids and grandkids with even more debt".

The government has already admitted that it will not meet its target of returning to a primary budget surplus in fiscal 2020, which excludes debt servicing costs and bond sales.

So, the one thing in can say with certainty is that it still will be having to issue new bonds just to cover the primary budget for at least the next 5 years. Now that you can take to the bank.

1 ( +5 / -4 )

Japan’s debt burden is the worst among industrialised economies

Blatantly false statement. It is not "debt", it is not a "burden", and it is not the "worst", as Japan is the currency issuer not the currency user as are countries in the Euro Zone. What they think is debt is in fact the supply of Japanese yen. Try to reduce the "debt" by reducing the yen in circulation through spending cuts and tax hikes and here comes next recession. Like clockwork.

0 ( +3 / -3 )

Blatantly false statement. It is not "debt", it is not a "burden", and it is not the "worst", as Japan is the currency issuer not the currency user as are countries in the Euro Zone. What they think is debt is in fact the supply of Japanese yen. Try to reduce the "debt" by reducing the yen in circulation through spending cuts and tax hikes and here comes next recession. Like clockwork.

Guy -- really. Why don't you take a minute and research what percentage of the Japanese annual budget has to go to the servicing costs on this non-existent debt? And then tell me by what definition it is not debt?

-3 ( +3 / -6 )

jerseyboy - Oh, believe me I've researched it. The MOF figures for debt servicing includes the principal as well as interest payments. You'll have to ask them their motivation for putting out such a fraudulent number. Also, all interest payments on bonds held by the BOJ and the Post Office bank are paid back to the Ministry of Finance. Cost to the government is zero. And it is money not debt because you obviously can't buy a bond until the Japanese government injects the money for you to buy it with

0 ( +3 / -3 )

What was the point of stating a timeframe if its not important to adhere to it. I don't remember anyone saying as such two years ago.

0 ( +1 / -1 )

Also, all interest payments on bonds held by the BOJ and the Post Office bank are paid back to the Ministry of Finance. Cost to the government is zero. And it is money not debt because you obviously can't buy a bond until the Japanese government injects the money for you to buy it with.

Guy -- huh? What about the over 60% of the Japanese debt held by insurance companies, banks, etc? Do those folks not expect to be paid back -- both interest and principal? Sorry, but you are mistaken -- it is debt.

-2 ( +3 / -5 )

Guy_Jean_Dailleult,

Blatantly false statement.

He was dead right.

What they think is debt is in fact the supply of Japanese yen.

There is a normal level of base money that is needed to support economic growth, but the massive increase in base money that the BOJ has provided recently through assets purchases is far in excess of what the economy requires.

Try to reduce the "debt" by reducing the yen in circulation through spending cuts and tax hikes and here comes next recession. Like clockwork.

The Japanese economy has shrunk in nominal terms over the past 20 years from above 500 trillion yen to under 500 trillion yen, and you are worried that doing something different for a change might cause a recession? What do you call the past 20 years?

-1 ( +1 / -2 )

Japan was a baby, grew and became a teenager, then got married. Now she is an old lady. Whatever BOJ or MOF do, will not change the reality an old lady eats less, work less, entertain less, rest more, will be slower and probably has less materialistic desires.

2 ( +2 / -0 )

Blatantly false statement. It is not "debt", it is not a "burden", and it is not the "worst", as Japan is the currency issuer not the currency user as are countries in the Euro Zone. What they think is debt is in fact the supply of Japanese yen.

Wrong. Japan raises money to pay for expenses by selling bonds (otherwise known as "issuing debt"). Now Japan is issuing currency which it uses to buy bonds from itself, and of course ends up charging interest to themselves for money they create and borrow from themselves for themselves. Does nothing look wrong with this picture?

Since these bonds must be paid for over time, and currently debt servicing costs amount to 26% of all revenue collected in Japan. This is a burden of epic/fantastic/phenomenal proportions, and this burden is still growing steadily.

-2 ( +2 / -4 )

"Gov't adviser not worried about temporary slowdown in inflation"

Why should he? His income will remain stable, no matter what happens...

3 ( +3 / -0 )

Temporary as the article stated.

1 ( +1 / -0 )

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