Abe criticized over plan to force BOJ to buy government bonds

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  • 0

    papigiulio

    not even a PM yet and already criticized. You're off to a good start Abekun.

  • 2

    some14some

    ...now ask Abe why do we need BOJ? why not merge it with Finance Ministry?

  • 3

    Seirei Tobimatsu

    Aren't we having slowdown not recession? Decreased consumption, waste, garbage, pollution, overwork ... all better for work life balance? Living with parents or friends socially healthier than nuclear families and living alone. If Bhutan, much poorer, is happy without higher GDP, shouldn't Japan not aim higher ?

  • 1

    GW

    Might be time to convert some YEN, if this happens the foreign currency cud skyrocket it value & pay for my retirement if I get trapped here!

  • 6

    marcelito

    More white elephant project for cronies that the LDP wants the public to pay for ( via BOJ forced bond purchasing )...meanwhile the average Taro,s savings and buying power would go down the toilet with yen decreasing and prices of everything going up while the big business benefits . LDP sure has not changed one bit in the 3 years in opposition- crooks.

  • 6

    BertieWooster

    Abe has a death wish.

    "If I'm going down, you'll all come with me!"

    Please, please don't put this maniac in as PM!

  • 1

    Hiroicci

    Keep the central bank independence. Full stop.

  • 0

    soldave

    Impressive - we could have a PM coming to power with public support in the 20-30% region. And yet still he'll win the election.

  • 3

    japan_cynic

    They need inflation to wipe out the debts.

    Of course this also completely screws anyone who has saved responsibly. It's been basic policy in the West for the last few years.

  • 9

    tkoind2

    Abe was a hopeless PM the first time around, why would anyone expect him to have improved.

    Bottom line. The DPJ are bumbling, disorganized, self centered parasites on society's back. But only there for a few short years. The LDP are professional, seasoned bumbling disorganized self centered parasites. In my opinion probably more dangerous to the well being of working people than the DPJ. But it is a close call in any case.

    Abe's plan would fail. And yes it is pork barrel politics. So what are the options for Japanese voters?

    1. Stay with the current inept government led by the uninspiring Noda.

    2. Go with Abe and the LDP who are a clear return to the grey ineptitude of the past.

    3. Go with Hashimoto and Ishihara who would return Japan to a time that never actually existed where everyone was a rich samurai and women were all passive and kawaii. But leave your tattoos at the door.

    Bottom line. In the immortal words of the panic ridden soldier in Alien 2 "Game Over Man" "We're screwed"

    Best option for Japan? Popular political uprising to drop all three parties in Tokyo Bay and start over from scratch!

  • 3

    vctokyo

    i wonder if the government can bail out the BOJ? abe is bringing back the policies when he was in office, which didnt work...no ne should vote for this loser

  • 1

    alliswellinjapan

    One good thing is that he has made his policies clear prior to the election debate. In addition to plans for massive public spending he is also saying they are going to significantly lower corporate tax. Good or bad to criticize this others will need to prepare and propose alternative measures.

  • 1

    warispeace

    It doesn't matter what any of them does in the long run. A growth-based economy depends on an ever greater population consuming ever greater quantities of energy, which is why many xenophobic countries in Europe with aging populations accept so many immigrants. The demographics are just not in Japan's favour over the next 30-40 years, until the population stops shrinking. Of all countries, Japan especially should be pushing for a new sustainable economic/ecological model.

  • -1

    sfjp330

    Instead Abe should be saying China should not buy this much J-goverment bonds. China is drastically affecting the Japanese yen exchange rates by keeping it stronger. They are controlling Japan. China became the largest creditor of Japan after increasing its holdings of J-government bonds over 70 percent by the end of 2011 from a year earlier.

  • 0

    AKBfan

    Because all these schemes have worked so well for years and are working so well in UK, Europe and US. These goons have betweeen them destroyed the Japanese economy.

  • 0

    warispeace

    @sfjp330

    Instead Abe should be saying China should not buy this much J-goverment bonds. China is drastically affecting the Japanese yen exchange rates by keeping it stronger. They are controlling Japan. China became the largest creditor of Japan after increasing its holdings of J-government bonds over 70 percent by the end of 2011 from a year earlier.

    No need to stoke this nationalist fire. Capitalism has no face.

  • 3

    Rhino

    AKBfan: I have to agree with you on this. While I am not at all happy about Abe`s plans, it has to be said that it would be hard for any country not to do the same the US, China and now Europe are doing, without losing out big time.

    Fact is, this is a runaway train. Worldwide. All the people in charge around the world, that are supposed to be so smart, are unfortunately also very short-sighted.

    Man, I am so glad I don`t leave any kids behind.

  • -3

    oldsanno

    Abe criticized over plan

    Analysts rounded on the calls on Monday, saying they endangered the independence of the Bank of Japan and risked weakening fiscal discipline, possibly with disastrous effects.

    How many analysts were "rounded"?

    Were all analysts critical?

    What we know is that AFP found 2 analysts that had some criticism of Abe. If AFP wanted to they could find some analysts that support Abe, but that will never happen.

  • -1

    kchoze

    I don't know him well, and what I had heard thus far wasn't reassuring, but this is good news. The focus on "fiscal discipline" and "central bank independence" are recent dogmas that might have been adequate to deal with stagflation back in the 70s and 80s, when there was too much inflation. However, in the present context, with the Yen as strong as it is and continued flirtation with deflation, these dogmas are insane.

    In the economy, like in most things, the important thing is balance. When inflation is too high, yes, it's important to take measures to reassure investors and to convince them that you have fiscal discipline. But when inflation is very low, the currency is too high and the economy is depressed as a result, this isn't the time for these measures, it's the time to do the opposite, to reestablish balance for the sake of the economy.

    Those who are ready to let the world burn to uphold these dogmas are leading us to catastrophe, look at what is happening in Europe, with german intransigence destroying the economies of half of Europe, all to protect their dogma of a strong Euro.

    This is the time for loose monetary policies. The world economy is suffering from too much debt and there is not enough money in circulation to allow debtors to repay their debts. So you need to inject money into the economy to allow people to pay down their debts, and thus remove this debt burden that drags down economic activities.

  • 1

    NeverSubmit

    Every country is going to do (is doing) the same.

    Only hard assets can protect your wealth, physical Gold, Silver or Real Estate.

  • 1

    Soohwan Trass

    Replacing the current PM after one year with a former PM who lasted one year...

  • 5

    Disillusioned

    The Japanese economy is seriously doomed! Yeah, everybody knows it is in trouble, but these wombats think the policies of 30 years ago will resue it.

  • 3

    Debucho

    fascism rearing its head already and he is not even the PM yet!

  • 1

    thkanner

    the only way out is forcing BoJ to buy bonds. the people all ready buying this junk by the tons. they dont even understand its one of the biggest ponzi schemes ever.

  • 2

    globalwatcher

    Mr Abe called on the central bank to print “unlimited yen” to achieve a new inflation target. In recent weeks he has called for a 3 per cent inflation target – significantly above the current 1 per cent.

    Do not mess with BOJ. They need to stay independent for monetary policy, period. Abe is mixing up apple butter with s***. Very dangerous.

    This is a bailout for big Japanese busines tied with Keidanren at expense of the middle income Japanese and the small/middle size business of Japan.

    Abe's idea above is a threat to efforts to close the huge gap between Japanese government revenues and spending.

    If this is done, how could the fiscal discipline really be maintained? I do not know the details of the proposal, but from the essence of what I have heard I wonder whether Japan could endure it.

    Of course, the market loves Abe's idea, but its objective is to make a profit. The maket does not have a moral compass to think what is a best interest for a common good of society. I hope voters can see this through. Abe is selling out the middle class of Japan. Wake up, people of Japan. Why do you want to go back to the LDP that took you to this mess? Abe will take you to a wrong path- deeper trouble beyond repair.

  • 1

    hkitagawa

    Well, better to increase consume than increase bonds. Bonds is a way to collect the people saving to pay for government expenses that is not good since it increases debt in a long term. Consume increase is a way for government to pay expenses by collecting taxes. The better thing is increase consuming, increase the people salary, develop a way to increase consuming. High paid salary means more tax collected. Government can create more educational centers for immigrants and force companies to give equal employment opportunity. Why not create a super computer to simulate economics? It should be as important as predict climate.

  • 2

    Sensato

    Japan under Abe's rule looks increasingly similar to that of 1930s Japan.

    In Abe's probable second shot as PM it looks like he is poised to work toward chipping away at the BOJ's independence from the government. A position Japan's central bank was in before and during WWII, thereby enabling the government to force the bank to print money to finance the war effort -- and ultimately leading to hyperinflation.

    This comes after moves by Abe in his first term as PM (Sep 2006 to Sep 2007) when his administration spearheaded revision to the Fundamental Law of Education to a mandate that one goal of education is to "foster an attitude that loves the nation" (passed into law in June 2007). This revision is again similar to directives pre-WWII in having made patriotism part of the school curriculum and potentially putting teachers in danger of being at odds with the law if they teach about Japan's role as perpetrator in WWII (but not if they teach about suffering endured by the nation).

    Worrisome indeed.

  • 4

    Debucho

    Japan under Abe's rule looks increasingly similar to that of 1930s Japan.

    Yes, Sensato, you are right. Do you hear the black vans of the right wing driving around Tokyo today? They are getting ready for right-wing friendly leadership so they can run a muck and tick off China and Korea. They can't wait!

    Regular Yasukuni visits int he Abe plan as well. Fascist.

  • 2

    globalwatcher

    If the Japanese vote for Abe, they are voting for their savings becoming worthless.

    Well said, Dog. Money is already leaving out of Japan. I wonder if that's what Abe wants to do.

  • 0

    iasia

    Part of me says that we should let all of the extremists (on both sides) in all of the countries take control of the reigns for a bit. If the policies they advocate turn out to be a successful as they claim they will be, then the world will be better off in so many ways. Likewise, if the policies these people advocate turn out to be the unmitigated disasters that quite a few experts predict they will be, then the world would be in dire straights for awhile, but the extremists will be discredited with the public for quite some time to come and the world will be better for it. With these people out of the way, the moderates will be able to govern according to what's best for their respective countries and not's what's best for their party.

    Obviously what I posted is a very superficial plan, but politicians such as Abe and their supporters are going to keep claiming they are right and know better as long as they are not in power. The only way these people are going to go away is to give them the keys to the car and let them run it head on into a brick wall. Give them everything they want, give them nobody to blame but themselves and then sweep them out the door forever when they finally reap all of the bs they have been sowing.

    Idiots like 'Mr. Small Party' Kamei, 'I'm more than a TV lawyer' Hashimoto, 'Mr. Tokyo Olympics' Ishihara are only interested in what is good for themselves. They are not interested in finding a common ground among competing interests and ruling by consensus. Napoleans one and all. Let them all be PMs and seal their own fates and destroy their own legacies so that their offspring and their offspring's offspring may never again dare show their faces in the Japanese political arena.

  • -1

    ubikwit

    I don't agree with the inflation target, as that is aimed simply at propping up the value of the assets of the corrupt propertied class, to which Abe belongs.

    On the other hand, buying bonds can bring down the value of the yen, as it effectively ends the so-called "safe haven" status that attracts foreign speculators, and destabilizes the Japanese economy.

  • -1

    ubikwit

    Money is already leaving out of Japan. I wonder if that's what Abe wants to do.

    You are of course referring the ill-gotten gain of the white-collar criminal class of currency speculators that are speculating in the safe haven market? Unconstrained by the regulations that keep the "free market" "free"??

    The faster that money is gone the better, because they are not investing it in capital expenditures, only pulling down the value of the yen.

    Down with the white-collar criminal class. Incarcerate all of them.

  • -1

    uchina58

    Who sholud I vote for any good advice??

  • -1

    ubikwit

    I meant "artificially pushing up the value of the yen", not puling it down...

  • -1

    edojin

    After reading the article thoroughly, there are too many "ifs" in there to make the whole scheme a frightful idea. Isn't there a better way to get the economy rolling again? Isn't there somebody better than Abe to run this country? Somebody with an economically sound mind? I also get the feeling that the LDP is once again getting ready to pounce on our hard-earned money any way it can. Something should be done that doesn't hurt the average citizens ... and not help our greedy politicians. And on and on and on ...

  • -2

    Serrano

    tkoind: "Game over"

    LOL.

  • 0

    globalwatcher

    The faster that money is gone the better, because they are not investing it in capital expenditures, only pulling down the value of the yen.

    You have said very well, That's the reason this plan WILL fail. I have been writing about this on JT for years.

    Down with the white-collar criminal class. Incarcerate all of them.

    The market has no face, no feeling, no moral compass. Blame everyone else but yourself. Classic!!

    You are voting for yen becoming a worthless paper and war. Bwhahaha.

  • 1

    Hikozaemon

    I can see an upside to this - it will destroy the yen. Good for exporters!

    Of course, the last time a major country tried to legislate to put its hand in the piggybank and directly interfere with its central bank I believe was Hungary. And that didn't work out very well for that country's reputation or credit rating.

    It is kind of ironic to see the DPJ PM giving the bureaucratic line, and the LDP leader making impractical wild suggestions of forcing civil servants to do stuff they don't want to do.

    They had better listen. This time next month, short of a meteor strike, Mr. "Let's take over the central bank and print money!" is going to be in charge...

  • 0

    globalwatcher

    SensatoNov. 20, 2012 - 12:33PM JST

    Japan under Abe's rule looks increasingly similar to that of 1930s Japan.

    You hit the nail to head. Exactly!! Very good post, Sensantro.

  • -1

    nigelboy

    Central government's involvement in the purchase of bonds is not a new concept.

    In this case, what Abe's specifically targeting are Contruction bonds which the oustanding balance has been hovering just over 200 trillion yen for over a decade now.

  • 1

    kchoze

    Hikozaemon, for 30 years after WWII, most countries had their central banks buy their own bonds to keep debt interests low. During the stagflation of the 70s, ideological economists convinced politicians to sign away their rights to do so and preserve "central bank independence", a novel concept. They claimed it would end inflation... it did not. Inflation stayed high for years after this, and the result was that governments paid higher interests on their debts, which ballooned them. In fact, without those increased interests on government debt, most western countries would have little to no debt currently had they chosen the exact same policies.

    The idea that central banks HAVE to be independent or catastrophe ensues is a recent dogma that is not supported by the facts. Of course, a central bank can still screw up and cause a lot of damage, but there is no evidence that independent central banks are significantly better.

  • -1

    nigelboy

    I find it amuzing that those very same people who criticize the Japanese government for NOT taking "drastic actions" are criticizing an individual who is ready to do so. Their counter argument so far thus been "hyper inflation", "1930's Japan" and one wonders which individuals are actually 12 year olds.

    The DPJ and BOJ could not implement a worthwhile policy to get of the current deflationary cycle nor the high yen. It's time to inject money to the public works that has been stagnant for the last decade.

  • 0

    globalwatcher

    nigelboyNov. 21, 2012 - 12:55AM JST

    I find it amuzing that those very same people who criticize the Japanese government for NOT taking "drastic actions" are criticizing an individual who is ready to do so

    Global financial correspondence and your comment have a big descrepancy on this issue.

    Saving Japanese economy (old model) cannot be achieved unless you are willing to overhaul public spending and eliminating corruptions in bureaucrats and politicians that are alredy beyond repair. .

  • -1

    nigelboy

    Saving Japanese economy (old model) cannot be achieved unless you are willing to overhaul public spending and eliminating corruptions in bureaucrats and politicians that are alredy beyond repair. .

    Your concept of "overhaul public spending" and the sheep lawmakers of DPJ that followed this is exactly why Japan is still in a deflationary cycle. What we're talking about here in injecting money through easement of monetary policy to stimulate circulation thereby moving towards a 2-3% inflation target especially in the 3/11 restoration areas where the multiplier effect will be higher.

  • 0

    globalwatcher

    What we're talking about here in injecting money through easement of monetary policy to stimulate circulation thereby moving towards a 2-3% inflation target especially in the 3/11 restoration areas where the multiplier effect will be higher

    Please provide weblinks to back that up. Global financial analists have a different view on this.

  • -2

    nigelboy

    Please provide weblinks to back that up. Global financial analists have a different view on this.

    On which part?

  • 0

    globalwatcher

    nigelboyNov. 21, 2012 - 01:47AM JST

    Please provide weblinks to back that up. Global financial analists have a different view on this.

    On which part?

    nigelboy, if you do not mind, I need to read them all as much as I could to connect dots to see hidden points. Thanks. This is a serious issue. I am ready to spend all day for this. I want Japan and Japanese to succeed.

  • -2

    nigelboy

    nigelboy, if you do not mind, I need to read them all as much as I could to connect dots to see hidden points. Thanks. This is a serious issue. I am ready to spend all day for this. I want Japan and Japanese to succeed.

    http://trans.kuciv.kyoto-u.ac.jp/tba/images/stories/PDF/Fujii/201204-201206/other/fujii_deflation_modified.pdf

    This paper is to empirically test the theoretical hypothesis that public works would have deterrence effects of deflation under the situation that deflation-gap exists. For this empirical test, we used Japanese macro-economics data since 1991 when deflation-gap cased by the collapse of bubble economy. As a result, we found that 1,000 billions yen’s public works increases the GDP deflator by 0.6- 0.8% and increases nominal GDP by about 1,650 billions yen - 5,260 billions yen. This results support the hyposhsis that public works would have deterrence effects of deflation under the situation that deflation-gap exists. It was also found that the deflation deterrence effects by the public works was larger than that by the increase export.

    http://www.rice.or.jp/regular_report/pdf/construction_economic_report/58gaiyou.pdf

    Here, the reconstruction/restoration (復興)has a greater mulitiplier effect since unlike the typical new projects where lands are purchased from owners (which does not effect the GDP), the more sums are contributed to the GDP.

  • -3

    nigelboy

    These are the same Keita Shibayama and Takeshi Nakano who argued for more Japanese protectionsim against imports because imports cause deflation by being cheaper than Japanese made products.

    Nope.

    He stated that an "export driven" economy and to continually maintain it causes a deflationary psyche. The result of course, is people wanting cheaper and cheaper products, namely overseas. Nakano also states that many of the people automatically associate "protectionism" as evil while "globalization" as good without too much thought into it. (Case in point, here)

    I suggest you go and read something with a bit more authority and objectivity, such as The Economist or the Wall Street Journal

    Perhpas you could link some instead of using some ridiculous scare mongering "hyperinflation" BS.

  • -2

    nigelboy

    http://online.wsj.com/article/SB10001424127887323353204578128731588617520.html

    What does this article say? I'm not a member so perhaps you could highlight by copy/pasting a pertinent paragraph.

  • 0

    sfjp330

    nigelboy Nov. 21, 2012 - 03:58AM JST The result of course, is people wanting cheaper and cheaper products, namely overseas. Nakano also states that many of the people automatically associate "protectionism" as evil while "globalization" as good without too much thought into it.

    You don't have to put too much thought into inefficiencies of Japanese farmers. Japan has one of the worst farm subsidies in the world. Why continue this practice supported by J-goverment? Maybe few decades ago, this was acceptable, but time has changed. If you look at the average land that these Japanese farmers are working on, Japan farm on average of tiny 2 to 5 acres of land. If you compare with the U.S. and Australian farmers, they are 10 to 100 times bigger land space than Japan. There would be alot more benefit for Japan of importing lower price agricultural products.

  • -2

    nigelboy

    LOL Dog. Somehow, I was able to retrieve the article. The article offers nothing. It's basically similar to this particular article with usual players commenting.

    As to your "hyper inflation" scare tactic, it's so ironic that the guy who is using this in the article YOU LINKED is Noda, himself. Classic!!!!

  • -3

    nigelboy

    sfjp330

    Follow the thread for god sakes. Any farmers or industry that is receivng subsidies are by definition "inefficient". That's not what we are talking about. We're talking about getting out of deflationary spiral. Please concentrate.

  • 0

    globalwatcher

    nigelboy, please pay attention to the graph I am posting. Japanese QE did not help at all. USD Fed Chairman has suggested about 10 minutes ago that there will be no more QE while we are heading to the fiscal cliff here in US. He understands the negative unintended long term consequences.

    I am glad my kids are not left behind. There is no way my kids will not be living there by Abe, Ishihara/Hashimoto regime. i did it right.

    Mr. Shirakawa also cautioned that maintaining easy monetary policy "for an extended period" will likely yield unwelcome unintended consequences.

    http://online.wsj.com/article/SB10001424052748704444304575628403102379326.html

  • -2

    nigelboy

    globalwatcher

    Your wsj includes the following,

    "Critics say the Japanese central bank wasn't aggressive enough in launching and expanding its bond-buying program—then dropped it too soon. "

    "Others say Japan simply waited too long to resort to the policy. Tomoya Masanao, who oversees the Japanese portfolio for bond fund giant PIMCO, points out it took the BOJ two years after Japan's consumer prices started falling to launch its bond-buying program. What's important is to do it quickly and aggressively before inflation expectations start to diminish"

    "not aggressive enough", "waited too long".

    Abe is stating that he is going to do the exact opposite so what are you arguing, globalwatcher? Do you not agree with the article?

  • 0

    globalwatcher

    I do not know if you are following my posts. A while go, I did mention to ubikwit that China is waiting for a perfect storm to attack Japanese bond market. This's exactly that. I just hope you realize it, and you have no say.

  • -2

    nigelboy

    I do not know if you are following my posts. A while go, I did mention to ubikwit that China is waiting for a perfect storm to attack Japanese bond market. This's exactly that. I just hope you realize it, and you have no say.

    Perfect storm meaning what globalwatcher?

  • 0

    globalwatcher

    nigelboyNov. 21, 2012 - 06:10AM JST

    globalwatcher

    Your wsj includes the following,

    Please review it again. Underlining concept you need to grasp in this article is a foundamental and a structural economic model has to be repaired. The corruption of bureaucrats and politicians has to be reformed before doing any more QE. Japanese election system has to be reformed. Japan is not a democratic country. Sorry to say.

  • -1

    globalwatcher

    nigelboyNov. 21, 2012 - 06:28AM JST

    I do not know if you are following my posts. A while go, I did mention to ubikwit that China is waiting for a perfect storm to attack Japanese bond market. This's exactly that. I just hope you realize it, and you have no say.

    Perfect storm meaning what globalwatcher?

    I have said this. Do I have to highlight it for you?

  • -2

    nigelboy

    Please review it again. Underlining concept you need to grasp in this article is a foundamental and a structural economic model has to be repaired. The corruption of bureaucrats and politicians has to be reformed before doing any more QE. Japanese election system has to be reformed. Japan is not a democratic country. Sorry to say.

    I did. But you resort to rehashing the post stamped Nov. 21, 2012 - 01:16AM JST
    It amazes me that you link an article that basically supports Abe but you fail to realize it.

    I have said this. Do I have to highlight it for you?

    Yes. Because I do not see it in this thread. But if you're talking about a possible attack by China's 18 trillion yen JGB holding, one must question how insignificant that amount is compared to the total outstanding JGB held by Japan.

  • 0

    globalwatcher

    Yes. Because I do not see it in this thread. But if you're talking about a possible attack by China's 18 trillion yen JGB holding, one must question how insignificant that amount is compared to the total outstanding JGB held by Japan.

    Please read a history of China buying US in the past 10 years. They are the biggest financier of US.China is now controlling US. They will do exactly that against Japan. Do not under estimate what they will do. It is real.

  • 0

    globalwatcher

    I did. But you resort to rehashing the post stamped Nov. 21, 2012 - 01:16AM JST It amazes me that you link an article that basically supports Abe but you fail to realize it.

    Absolutely I am not for Abe, Ishihara/Hashimoto. I do not know if you have read this. But I will repeat this again.

    Do not mess with BOJ. They need to stay independent for monetary policy, period. Abe is mixing up apple butter with s***. Very dangerous.

    This is a bailout for big Japanese busines tied with Keidanren at expense of the middle income Japanese and the small/middle size business of Japan

    China loves this!!!

  • 3

    sfjp330

    nigelboyNov. 21, 2012 - 05:10AM JSTAny farmers or industry that is receivng subsidies are by definition "inefficient". That's not what we are talking about. We're talking about getting out of deflationary spiral. Please concentrate.

    You can call J-goverment inefficient. In recent years, J-goverment annually paid out $46.5 billion in handouts to farmers. This is a big chunk of money that Japan could be put into other worthwhile projects. J-goverment has to make hard choices to stop subsidies to farmers.

  • 0

    sfjp330

    nigelboy Nov. 21, 2012 - 01:31AM JST What we're talking about here in injecting money through easement of monetary policy to stimulate circulation thereby moving towards a 2-3% inflation target especially in the 3/11 restoration areas where the multiplier effect will be higher.

    In Japan there is no mechanism to ensure BOJ help by the purchases are stuck to promised economic and fiscal reforms. BOJ would buy bonds only if J-goverment accepted strict conditional supervision, and would stop the support if a government veered off course. To defend the yen, they have to make the intervention unconditional, set a specific cap on bond spreads and stated explicitly that if J-goverment is insolvent in the BOJ judgment, they will let it go.

  • 0

    yoyogipark

    his stupid friends want hyper-inflation so that their huge debts can go away ... that have to happen before ppl start calling em idiots

  • 0

    nigelboy

    Please read a history of China buying US in the past 10 years. They are the biggest financier of US.China is now controlling US. They will do exactly that against Japan. Do not under estimate what they will do. It is real.

    No they are not. When Japan was the biggest holder of U.S. debt for many years, did any sane person stated that "Japan controls U.S."? China's holding decreased $125 billion from September of 2011 to September 2012 in which the difference now is only $20 billion with the second largest holder, Japan.

    “They have to buy U.S. dollar assets as long as they are intervening in currency markets to hold down the value of the RMB against the dollar,”

    http://www.bloomberg.com/news/2012-09-11/china-s-u-s-debt-holdings-aren-t-threat-pentagon-says.html

    But I will repeat this again.

    ???? Seriously??!!! Keidanren as well as Rengo are very skeptical about this.

    経団連の米倉弘昌会長も「金融緩和だけでは、需要を喚起できるはずがない」

    Keidanren President Yonekura stated "Monetary Easing alone cannot spur consumer spending"

    Globalwatcher. When you make an argument, please make sure which parties are "for it" and "against it"

  • 0

    globalwatcher

    nigelboyNov. 22, 2012 - 12:13AM JST

    Please read a history of China buying US in the past 10 years. They are the biggest financier of US.China is now controlling US. They will do exactly that against Japan. Do not under estimate what they will do. It is real.

    No they are not.

    I hate to admit China is cutting my SSI check every month. Japan is different from China, hopefully.

    They have to buy U.S. dollar assets as long as they are intervening in currency markets to hold down the value of the RMB against the dollar

    Exactly that. They will do exactly that against Japan. Do not under estimate what they will do. It is real.

    They are smart enough to know Japanese QE initiated by Abe will not work. We are planning to do the same to make a profit from this situation. We can hardly wait. LOL.

    By the way, are you still for Abe's plan?

  • 0

    nigelboy

    I hate to admit China is cutting my SSI check every month

    No. It's the tax payers, Feds, banks, mutual funds and foreign countries that is cutting your SSI check every month. (Based on your argument)

    Japan is different from China, hopefully

    Definitely. Japan doesn't buy enough foreign government debts to keep it's currency low.

    Exactly that. They will do exactly that against Japan. Do not under estimate what they will do. It is real.

    Well then. You do realize that a massive sell off would in fact be choking their own necks right. (sigh)

  • 0

    globalwatcher

    nigelboyNov. 22, 2012 - 02:02AM JST

    I hate to admit China is cutting my SSI check every month

    No. It's the tax payers, Feds, banks, mutual funds and foreign countries that is cutting your SSI check every month. (Based on your argument)

    China is holding the biggest US Treasury.

    Exactly that. They will do exactly that against Japan. Do not under estimate what they will do. It is real.

    Well then. You do realize that a massive sell off would in fact be choking their own necks right. (sigh)

    China's true objectives are controlling Japan financially, buying up J. bond, land, water right, poltical voting right, you name it. What is China doing in Africa? They are trying to buy up natural resoures. Hope you get a big picture.

  • 0

    JeffLee

    but there is no evidence that independent central banks are significantly better.

    If central banks had been controlled by politicians (especially inept ones like Abe) the economy of Japan would have collapsed in 1992, the US in 2008 and the Eurozone in 2010.

    In Japan, in particular, the politicos have no right to be even near the money printing presses, where the political landscape is so chaotic and fragmented, with PMs and finance ministers changing every few months. You can't have monetary policy administered in such a milieu.

  • -1

    Hikozaemon

    You know what - I mocked Abe in my post above, but I did suggest it would at least shake confidence enough to lower the value of the yen.

    It is pretty clear that the sudden shift in the yen to 82 yen to the dollar after Abe's statement was directly connected. In that sense, to the extent that the high value of the yen is driven by foreign speculators (which it is in part, but also by a lot of repatriation of funds), acting batshit crazy like Abe is suggesting I think he is already demonstrating could be a great tool for lowering the Yen.

    I remember freaking out when the yen dropped below 100 some years ago. The economy and hopes for recovery are being killed by the high yen. I hate to admit it but Abe's "Grandpa's Gone Crazy and is Going to Nationalize the Central Bank" strategy for lowering the yen could actually be a good idea...

  • 0

    Simon Foston

    You can call J-goverment inefficient. In recent years, J-goverment annually paid out $46.5 billion in handouts to farmers. This is a big chunk of money that Japan could be put into other worthwhile projects. J-goverment has to make hard choices to stop subsidies to farmers.

    They won't do that. Keeping farmers dependent on subsidies is a good way to keep them voting for you. What's worthwhile doesn't matter nearly as much as what wins elections.

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