Looking back on late 2015, it is perfectly clear that policymakers had no idea what was going on. It’s always easy, of course, to reflect on such things with the benefit of hindsight, but even contemporarily it was somewhat shocking how complacent they had become as a global group. In the US, the Federal Reserve “raised rates” for the first [...]
I for go one can’t wait for a quadrillion. Nothing could so far both implicate Economists as well as demonstrate the folly of following them like the potential for the Bank of Japan’s balance sheet to hit that mark. In the coming months, BoJ will be at the halfway point, though I doubt there will be any celebrations. The central [...]
There is gold in Asia, at least gold of the intellectual variety for anyone who wishes to see it. The Chinese offer us perhaps the purest view of monetary conditions globally, where RMB money markets are by design tied directly to “dollar” behavior. It is, in my view, enormously helpful to obsess over China’s monetary system so as to be [...]
The Bank of Japan raised its growth outlook, keeping monetary policy unchanged at its latest meeting. In the latest to be swept up in “reflation”, Japan’s central bank even trumpeted (pardon the pun) the expected Trump “stimulus” as a reason to be more optimistic. Why wouldn’t they? After all, there is no place on Earth that more appreciates government spending [...]
Just over a week ago, the world (at least in chemistry) celebrated Mole Day. Rather than acknowledge the small underground mammal that immediately springs to mind, Mole Day is in honor of Amadeo Avogadro, the Count of Quaregna and Cerreto, who lived in the late 18th and early 19th centuries and contributed one of the major international base units in [...]
Nominal disposable income in Japan fell 4.4% year-over-year in May 2016. In what can only be a sign of the times being far too familiar in Japanese, real disposable income was thus slightly better at “only” -3.9%. For all the hundreds of trillions in new Japanese bank reserves provided by so many QE’s I have lost count, “real” in Japan [...]
Ten days ago, it was reported that the Bank of Japan for the first time set aside reserves against expected losses should its massive portfolio of JGB’s finally move toward QQE success. The main part of all this “stimulus” has been the accumulation of primarily government bonds at massive premiums. If it were ever to actually work, then the Japanese [...]
Household spending in February 2016 in Japan rose year-over-year for the first time in six months. That was the sum total of any good economic news for the monetary-stricken economy, and it doesn’t really survive closer inspection. The rise in spending was due largely to “other” activities you don’t associate with strong economic rebounds. The overall figure was just +1.6% [...]
As I often write, in Japan it is far more difficult to hide the failure of “stimulus.” There are varying degrees of visibility in that regard around the QE world, but they all share negative redistribution as the base alloy. That’s why Janet Yellen may be merely uncomfortable and Mario Draghi increasingly brooding, but Haruhiko Kuroda was just pushed to [...]
As China, Japan is the definition of insanity. GDP fell 1.4% in Q4 2015, marking the fifth contraction out of the past nine quarters and yet the word “stimulus” remains attached to QQE, the Bank of Japan and Abenomics in general. At this point, how much more time and sample size is necessary before calling it a failure? In about [...]
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