This page has been archived and commenting is disabled.
Hyperinflation Doesn't Scare Kuroda But Ex-BoJ Chief Says "Quit While You're Ahead"
Apparently under pressure from some members of Japan's parliament (who are likely being screamed at by the firms and people that bought and voted for them) as they question the possibility of JPY dropping to 170 per USD, BoJ Chief Haruhiko Kuroda proclaimed yesterday that "monetary policy can prevent hyperinflation," but don't worry because he "doesn't think Japan will experience hyperinflation." Well that's a relief because all his other predictions about how well Abenomics would work have been utter failures. Perhaps Kuroda should listen to ex-BoJ chief economist Hideo Hakayawa who stunningly suggested, The BOJ should start paring its unprecedented easing soon or risk hurting people, "it’s important to quit while you’re ahead."
Bank of Japan Governor Haruhiko Kuroda says doesn’t expect yen weakness to go that far when asked in parliament today about possibility of currency dropping to 170 per dollar...
- *KURODA: WEAK YEN IN LINE WITH FUNDAMENTALS IS POSITIVE OVERALL
- *KURODA: WEAK YEN CAN DEPRESS NONMANUFACTURING, REAL INCOMES
- *KURODA: FX HAS EFFECT ON COMPANIES' OVERSEAS BUSINESS
- *KURODA: CAN'T NECESSARILY SAY YEN DECLINE WILL GO THAT FAR
- *KURODA: HAVEN'T SET ANY DEADLINE FOR BOJ'S EASING
- *KURODA: WON'T LET PRICES CONTINUE TO RISE AFTER REACHING 2%
- *KURODA: TOO EARLY TO DISCUSS CONCRETE STEPS ON EXIT POLICY
And
- *KURODA: DON'T THINK JAPAN WILL EXPERIENCE HYPER INFLATION
- *KURODA: CAN PREVENT HYPER INFLATION WITH MONETARY POLICY
So - all good then?
Well no - as the Japanese central bank’s former chief economist, Hideo Hayakawa, suggests...
The BOJ should start paring its unprecedented easing soon or risk hurting people, Hayakawa said in an interview. Pushing inflation to a 2 percent target in a short period will raise living costs without boosting employment or growth, he said.
“It’s important to quit while you’re ahead,” said Hayakawa, who was an executive director at the BOJ until March 2013. “Basically, drop the two-year reference, keep the 2 percent target and taper slowly.”
The remarks underscore the risks Governor Haruhiko Kuroda is taking to reflate the world’s third-biggest economy with a stimulus program he began in April last year. While the BOJ is still winning its “gamble” with its stimulus, it shouldn’t push its luck, Hayakawa said.
“The secret to success is declare victory while you’re winning,” he said.
...
Growing public criticism of the yen’s recent weakness means the BOJ can’t stick to its current plan to reach 2 percent inflation, he said.
“The short cut to achieving the 2 percent target is through a weak yen but that goes against public sentiment,” Hayakawa said. “It’s not good to go too far and get wounded later.”
* * *
»
- 7004 reads
- Printer-friendly version
- Send to friend
- advertisements -
They haven't been ahead since Pearl Harbor.
The thought that they should taper is a fucking joke. BOJ buys JGB's to fund 50% or one half of the governments spending. Who in the fuck is going to buy 10 year bonds that pay 0.5% while inflation is currently running at 3% with a national debt of ONE QUADRILLION YEN AND A GDP/BEDT OF 240 other than the BOJ. They and anyone who even thinks Japan can Taper is a fucking retard. Given their demographics THEY WILL HAVE TO INCREASE QE, no other options. JAPAN IS FUCKED!!!!!
Ty
They could sell a few little islands to the Chinese?
I believe the headline was supposed to read "quit while you are behind"
my neighbor's ex-wife makes $77 /hour on the computer . She has been unemployed for seven months but last month her payment was $15804 just working on the computer for a few hours. go to the website... www.job-reports.com
All G3 will see significant inflation as soon as we stop selling our gold to China for overvalued fiat... our when we can no longer grow consumption, whichever comes first.
Japan is in a tough spot. They have been experiencing near-deflation for, what 30 years? Typically hyperinflations are preceded by a deflation (Germany, 1920s), but Japan is in an odd place, I cannot recall any experience like theirs.
This matters to us, one of our key suppliers (a small bearing mfr) is in Japan.
hey, bearing...
quick question...
how worried are the authorities in your neck of the woods about EBOLA??
thanks again
X
SE USA (where we live): local authorities are mute
Peru (where we visit & have our company): mute
thanks bro,,
They had warnings about it in Japan when I was there this morning
+ 1
Japan, being the singular kind of place it is, could enact and enforce policies against Ebola much easier than PC USA and Europe.
No worries, even ebola knows to stay away from radioactive contamination.
Sex robots will save Japan
They will save us all.
Sex robots will destroy a lot of jobs.
if you can't offer a better fuck than a robot, then you deserve to lose your job
tough love girls
You can put your ashtray on the robot's head.
Wonder if some are being made to satisfy the LGBT crowd... Moar trannie sex robots!!! Diversity!!!
The Zionists and Rothschild banksters stole Japan blind and soon she, they, will be nothing more than a province of China.
I hope the Chinese are over what the Japanese did to Manchuria.
An American, not US subject.
"In a way, Japan lost the war twice: Once to the Rockefellers in 1945 and again to the Rothschilds in 1989."
For the record I went Bezerk over QE I and then "mini Bezerk" over Taper.
Couldn't hold my tongue but did hold my ground.
I think Bernanke was spot on...but had a mountain of dumb luck because of the shale boom and transition away from oil to natural gas...a once in a century event in my view.
I did put forth a sales pitch for being an equity buyer just a few days ago...a good one I think. I'm just not putting my money where that mouth is nor have I been for some time. "Lack of Conviction" I guess...
You're trying to sell equities to unskilled investors right now?
That's evil man. How do you sleep at night?
Inflationary pressures will be swallowed up by exchange rate money destruction.
See
https://www.academia.edu/8816411/Rogue_Swan_EU_disintegration
ROFLMAO! - "Do not worry."
Yeah, like 2008 again.
How did that work out?
Oh yeah, fucked.
The Federal reserve's Japanese grand hyper-printing experiment won't work.
Japan implodes soon. The US follows sometime later.
yeah yeah Kyle
The US is way more fucked. Japan has all the factories. Their whole financial system can vapourize and there would still be productive assets there
Not so productive without oil
Not so productive without oil
The Japanese managed to shake off their own parasitic military and let innovation and free international markets work their magic. Unfortunately, those were the only beacons of light in a place where liberty forgot. I still can't get over my visit to Osaka's - and I am not making this up - University of Tax.
He would only need to deny this if a significant number of people thought it was a real possibility.
The Ex-BoJ Chief has been misquoted and should read ' Quit while you still have your Head '.
Yeah, alright, if you did something like what Milton Friedman proposed - a money supply that was controlled purely by computers and kept either constant (see Bitcoin) or at a constant low rate of increase, e.g. 4% annually (see gold), then yeah, it was possible to prevent hyperinflation if you did have such a policy until some point in the past. Even if you implemented such a policy right now, there is nothing to prevent a quick devaluation, in other words, a hyperinflationary episode, caused by all the money that you've already printed. More importantly, I would say:
That's scary. Because hyperinflation is NOT a monetary phenomenon. It's a PSYCHOLOGICAL phenomenon based on loss of trust.
Therefore HI can appear almost instantly without any preceding inflation, it can happen even out of svere deflation (i.e. if the deflation destroys the trust into the state to handle the debt problem). Once the HI run begins, there is nothing monetary policy can do:
Buying more government debt? Accelerates the mistrust into the currency. Creates even more money.
Selling government debt and reducing money supply? Government debt is already sold and interest rates are skyrocketing. This would increase the supply of bonds.
I don't think Kuroda doesn't know these elementary things. So his mentioning of HI has another goal. Is this the beginning to plant the possibility of HI in the public consciousness?
Japan has wasted the tremendous wealth of the Japanese people by borrowing their money trying to stimulate the economy. It did not work and they are left with a mammouth debt that will not be repaid. The Japanese people will lose most of their wealth (bank deposits, life insurance, JGB's, GPIF retirement, Japan Post Holdings, etc.). Recent deficits have been up to 60% of government spending (now down a little because of the higher sales tax). Upon continual credit rating declines to come; the JGB's will collapse and the yen will collapse as the smart people/institutions try to get their wealth out of Japanese banks, Insurance Companies, JGB's and institutions. Hyperinflation will occur because of the attempt to get rid of yen. This has been the wildest Keynesian experiment ever and it has failed. Note, the largest financial institution in the world is Japan Post Holdings and about 60% of total assets are JGB's. GPIF is the largest retirement plan in the world and most assets are in JGB's. Bank deposits in Japan are more than double the United States and 30% of total assets are in JGB's. Interest rates will explode when the yen collapses.