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A Central Bank's Collapse Into Schizophrenia: The Complete Disconnect Between BOJ Monetary Policy And Economic Assessment
One of the more amusing side-effects of the Keynesian system's death throes are the ever greater disconnects between a central bank's lies about reality and its actions. In this case, there is likely no better recent example than the BOJ (our Fed has been less vocal in its minutes recently in extolling the virtues of the US economy, which is the primary reason why the only thing driving the market are expectations of the arrival of "QE the Saviour"). Goldman has compiled a handy table showing how beginning in September 2009 there has been a major divergence between the BOJ's economic assessment and actual policy decisions, confirming that a nation's central bank is nothing but a populist tool to preserve a political system, even as it acts completely in opposition to its convictions.
Goldman's preface:
If the real economy is showing improvement and the bank’s assessment is also improving, we would not normally expect monetary easing. However, that has been happening in Japan since late last year. The BOJ has implemented further easing while upgrading its economic assessment. It was the October 14 2009 Statement on Monetary Policy where the BOJ said “Japan’s economy has started to pick up”. The tone was maintained in subsequent statements and on August 30 2010 the stance was upgraded to “Japan’s economy shows further signs of a moderate recovery and it is likely to be on a recovery trend.” Yet, starting at a special meeting on December 1 2009, the BOJ has introduced additional easing such as special financing for the corporate sector and funding to expand existing measures and support the foundations for economic growth. These seem to exist independently of the improvement in the BOJ’s economic assessment. Interestingly, none of the easing since December was on the policy list the BOJ drew up in response to the financial crisis in autumn 2008. The BOJ does not appear to associate its recent measures with the financial crisis.
Yes, there is now no longer any cause and effect between a deteriorating global economy, which is portrayed as improving beautifully and monetary policy responses. They all just happen thanks to magical unicorns.
As the collapse of modern economics continues, we expect to see much more such examples of "Fed" doublespeak as everyone professes that the recovery is surging even as QE XYZ is implemented.
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Time to go long the YEN!
It says the BoJ has been purchasing commercial paper & corporate bonds.
Any chance of giving us a chart of Japanese money market spreads over Japanese Governments?
The Japanese are an awesome display of Fascism.
Soon enough we will be just like them.
I would say Japan is an example of Fascism lite. In order to be full bore, they must have a strong military for both foreign and domestic conquest, smoothing the way for capitalism. Though I have noted over the past 2 years that Japan has become more vocal about breaking, or should I say relaxing, it's post WW2 bans on a strong military.
The global party's just getting started.
CD, Actually Japan might be the best example of Fascism in disguise. From deep personal interaction, I can say that they are the most "superior" people (in their heads), almost "chosen" ones like. As an interesting aside, Japanese never get hangovers! It's a genetic thing! Hmmmmm....many would consider that superior and chosen eh?
And why would they need an active military when they have their Genuinely fascist but even more hidden master providing them all the "cover" they've ever needed.
So far.
Now, it really feels like the game is War Funds gathering time.
Also, given the role of the yen in the post WWII world, I think their monetary policy, for what it's worth, is driven from NY, NY and FED,DC.
Game on though, for sure!!!
ORI
http://aadivaahan.wordpress.com
It used to be said that Japan was the only place where communism worked!
As for imperialism they tried it in China and have never been forgiven....
Magical unicorns
Yeah, but you forgot to slam the media in Japan which rarely investigates these statements by the BOJ. That's how they get away with it.
Good thing our media isn't in bed with the government and large corporations like Japan's is.
Does anyone remember that case of the Japanese Guy who ate western Girls?
You'd think the Jap talking heads would revile a guy like that, but no way he's a celebrity. First of all he only ate westerners, not real people (Japs), and secondly the Japs are fascinated with cruelty, sexual or otherwise. I'm not sure how this ties in with fascism, but its' interesting.
Canadian dollar up, oil up. When CAN/USD hits 1.07/.93 watch the economies of the world collapse like a aluminum can under the slightest of pressure. My guess that will be next week sometime according to my subjective doomsday clock.
Japan is so screwed, bad debt, no spending and one giant elderly population. I'm not surprised though on the BOJ ignoring valuations though. With all fiat money fighting to be the crappiest, poorly managed, shittiest piece of paper is anyone really that surprised with what is going on?
I keep hitting the print button, but nothing but PAPER currency comes out! I need a printer that produces bread, cheese, and salami, else I starve more!