The Japanese economy sank yet again, more than suggesting there is no recovery from the “inflation”-led recession that began six months before any tax change. Almost right from the start of QQE, Q4 2013, Japan’s GDP has either been contracting or barely rising. The net result is the monetary hole left behind by so many flawed theories. Primary among them, [...]
China’s economy is sliding and nobody can really tell where that downturn will end (though it doesn’t stop the media from proclaiming a bottom at each individual upward variation). Brazil’s economy is in the worst shape in decades, with both volume problems coinciding with the real’s sharp devaluation hammering consumer prices. The country’s central bank has managed to make it [...]
With base comparisons out of the way moving past the calendar months of Japan’s tax change last year, the continuing recession re-emerges. Real wages fell 2.9% year-over-year in June despite “inflation” remaining far below (thankfully for the Japanese) Bank of Japan’s intentions. Contractual earnings nominally were slightly higher but “special cash earnings” fell 6.5% after rising 25% in May. That [...]
The old cliché is that everything of significance in life is a marathon rather than a sprint. In Japan, such sentiment strains all reason as there is no way that any marathon, economic or otherwise, could possibly be expected to last more twenty-five years. But here it is in 2015, thirty years after the Plaza Accord and BoJ’s first massive [...]
Japanese household spending increased 5.5% in nominal terms in May; 4.8% in real spending growth. That was the first monthly increase since November and since it was a positive number, and not as typically close to zero, it is being hailed as another great sign of QQE success. With Q1 GDP revised up to nearly 5%, economists are back to [...]
At some point in the middle of the last century, economics of money shifted to economics of psychology. When Milton Friedman wrote his 1963 book, A Monetary History, it was an effort that uncovered the role of money in the collapse of the Great Depression as he and his co-author, Anna Schwartz, saw it. Whether or not it was a [...]
The Japanese have been encouraged today by the notion that their economy might actually be finding a recovery – as economists see it. As with so many other things in this QE period, the very definition of recovery seems to be up for debate in sharp contrast to accepted economic standards not all that long ago. The issue, really, is [...]
For Japan, the comparisons for March 2015 estimates are going to be tough as the yearly look-back aligns to March 2014 and the great surge prior to the tax increase. The distortive base effects make it more difficult to figure out just how little was gained (or lost) in spending and income. So the large granular declines are not suggestive [...]
Japan continues to provide the best refutation of monetary policy as anything other than destructive. With its economy stripped bare of dynamic essentials after thirty years of the Bank of Japan’s “lead”, marginal changes are left as remnants of nothing more than monetary transmission. In the space of QQE, that has used up and destroyed what was left of Japan’s [...]
For the first time since June 2012 Japan has attained a trade surplus. It is, however, premature to interpret that as an end to the impoverishment the island has undertaken these past three years, the last two under QQE. There are various reasons for the end of the negative trade imbalance, but the most significant surround the Chinese New Year. [...]
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