As most Americans, if not the financial media, are aware, Quantitative Easing (a euphemism for printing money) has failed to bring back the US economy.
So why has Japan adopted the policy? Since the heavy duty money printing began in 2013, the Japanese yen has fallen 35% against the US dollar, a big cost for a country dependent on energy imports. Moreover, the Japanese economy has shown no growth in response to the QE stimulus to justify the rising price of imports.
Despite the economy’s lack of response to the stimulus, last month the Bank of Japan announced a 60% increase in quantitative easing–from 50 to 80 trillion yen annually. Albert Edwards, a strategist at Societe Generale, predicts that the Japanese printing press will drive the yen down from 115 yen to the dollar to 145.
This is a prediction, but why risk the reality? What does Japan have to gain from currency depreciation? What is the thinking behind the policy?
An easy explanation is that Japan is being ordered to destroy its currency in order to protect the over-printed US dollar. As a vassal state, Japan suffers under US political and financial hegemony and is powerless to resist Washington’s pressure.
The official explanation is that, like the Federal Reserve, the Bank of Japan professes to believe in the Phillips Curve, which associates economic growth with inflation. The supply-side economic policy implemented by the Reagan administration disproved the Phillips Curve belief that economic growth was inconsistent with a declining or a stable rate of inflation. However, establishment economists refuse to take note and continue with the dogmas with which they are comfortable.
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1 comment:
The economists (in Universities) are bought and paid for propagandists for the international bankers who control the printing of currency.
They say and write exactly what they are told to say or write.
Why print currency out of thin air? Because the bankers own the governments. The governments have agreed to tax their respective citizens to "pay back" the bankers for the trouble of printing the currency.
Want to get even more mad?
The bankers get "paid back" for the fake money, PLUS they receive INTEREST on the money (which never existed prior to the printing).
Pretty good deal don't you think? The bankers create the money out of nothing, and then get paid back with interest.
Learn the truth about central banking.
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