Japan to auction Y155.1 tril in JGBs

I hope JT follows up and tells us how the auction went. The last one was oversubscribed by a factor of 3.7, at the world's lowest rates!! So much for Japan's economy is collapsing, eh?

Sure but who were the main buyers? BOJ, Post Office, National Pension? A revolving door can only turn so fast or handle so many people, otherwise accidents happen and thing jam up. 2014?

"Sure but who were the main buyers? BOJ, Post Office, National Pension"

Great point. That means the gov't owns...its own debt. Chew on that one for a while. How can Japan have trouble paying back its debt to itself... in a currency it issues? That's why japan ain't Greece and isn't in any danger of a debt crisis.

There is a difference, the BOJ is printing money, giving it to the institutions, who then buy JGBs , and prop up the bond market as well as the entire national budget. Sooner than later it will break down. If printing money was the key to success why did Japan need to go through the 60's , 70's ,and 80's , with huge industrial expansion? They could have just printed their way to success instead? This is exactly what they are doing now, printing to keep the game going.

"Sooner than later it will break down."

How and why? It's been going on for 13 years with no signs of faltering.

"as well as the entire national budget."

Nope. Private consumption is what drives Japan's economy.

"If printing money was the key to success why did Japan need to go through the 60's , 70's ,and 80's , with huge industrial expansion?"

Because the economic circumstances are now vastly different than before. Market mechanisms are no longer enough to sustain growth, as they were back then. Mainly because our multinationals are in a process of transferring their industrial capital out of our countries and giving it away to China. We need the govt stimulus to compensate for this outflow of productive capital.

Call me old fashioned but I don't buy into this brave new world stuff of a government eating through reserves or debasing its currency to basically purchase bonds fro itself with printed money, that drops the value of the currency, causing those low on the pole to suffer. If consumer spending drives the economy, and spending is down while prices are up, this does not provide the necessary tax revenues to justify either the bond purchases or the stimulus programs , ie, QE. Yes there will be an uptick in sales due to the consumption tax rise, but by mid 2014 , the average housewife will tighten the apron strings and spending will drop dramatically, just like it did last time they tried the exact SAME thing.

Tax revenues surge whenever there's growth in GDP. The trick is to get sustainable GDP growth to pay down the debt. Trying to balance the budget during slow growth is suicide, as can be seen from the European experience.

QE saved the world from a destructive downward spiral, as in the 1930s or Japan in 1989. Why do so many people (anti-Obama Americans in particular) refuse to acknowledge that?

What I'm saying is QE is the lazy way out. Real reform of wasteful spending would solve the biggest problems. It's mind boggling that every little town has a multi-billion yen publicly funded tourist trap monstrosity, yet the schools and hospitals are dingy, dark, freezing, mold encrusted.

Pay down the debt is not going to happen. How do you pay back the fact that 50% of all spending is now the interest on the debt. Inflating away the debt will happen. You know how that works, high inflation, then bond crisis.

What I'm saying is QE is the lazy way out.

The central bank has a responsibility to do whatever takes to get the economy going again in times of recession, especially 20-year long recessions!

"Real reform of wasteful spending"

Spending is a fiscal issue. QE is a monetary issue. Those policies are separate and carried out by different people. Youre right, the government spending has been wasteful, but blame the politicians for that, not the BOJ, which basically saved Japan from going right down the tubes after 2008.