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"We Just Need To Print More Money" Bank Of Japan's New Board Member Clarifies Endgame

Tyler Durden's picture




 

The Abe administration nominated a major proponent of reflationary (inflationary) monetary policy to the central bank’s board, buttressing Governor Haruhiko Kuroda’s efforts to save the nation from the dread of deflation. As Bloomberg reports, economist Yutaka Harada, who will replace Ryuzo Miyao, has said Japan can beat deflation by printing money in a 2013 book "Reflationary Policy Revives Japan’s Economy." So far that is not working so try harder... “The nomination is a good news for Kuroda... he will keep a majority on the board and win what he wants." Why such good news? As deputy director at the finance ministry’s Policy Research Institute, Harada exclaimed, "we just need to print money."

 

As Bloomberg reports, “Harada has been a well-known monetarist and a strong supporter on quantitative easing,” Masaaki Kanno, an economist at JPMorgan Chase & Co., wrote in a note...

In an interview with Bloomberg News in 2002, Harada said the central bank held the key to ending deflation, which began to grip the economy in the late 1990s as Japan stumbled into a recession amid a banking crisis.

 

“We just need to print money,” said Harada, who was a deputy director at the finance ministry’s Policy Research Institute at the time.

 

“If the BOJ buys all of the bonds from Japan’s debt market, that will create inflation without a doubt. That’s it,” Harada said. “Deflation will be over if the BOJ buys them under the condition that it would continue the purchases until 2 or 3 percent of inflation is achieved.”

 

In 2012 paper published before Abe took office pledging to shake Japan out deflation with Abenomics, Harada said the “absence of any real monetary policy” had contributed to Japan’s two decades of stagnation.

*  *  *

So far that's not working out so great...

One can only marvel at how smartly Japanese business has “picked up” due to the Kuroda BoJ’s debasement of the yen. They have wrought a real miracle with this policy. We have a strong feeling though that Mr. Harada will immediately push for more of the same. Below you can see why:

 

1-japan-industrial-production

Japan, industrial production – click to enlarge.

 

2-japan-household-spending

Japan, household spending – click to enlarge.

 

3-japan-gdp-growth-annualized

Japan, GDP growth, quarterly annualized – click to enlarge.

 

According to the logic of the Keynesian inflationists infesting modern-day central banks, the above data can only mean one thing: regardless of how insane the size of an inflation and deficit spending program already is, it is obviously still not big enough. Never mind that Japan has been at it for 25 years running already, with nothing to show for it but a catastrophically large mountain of public debt, the servicing of which by now devours a full 25% of government tax revenues in spite of government debt sporting yields so minuscule one needs an electron microscope to see them. More of what somehow hasn’t worked in a quarter of a century is clearly needed!

*  *  *

Acting-Man's Pater Tenebrarum sums up our thoughts very succinctly...

We continue to believe that Japan’s graying society needs inflation and currency debasement like a hole in the head. However, all indications are that the policy will continue to be pursued, perhaps even more forcefully that before, now that Mr. Harada is about to join the BoJ’s board.

 

tic-toc-graphic

The first thing that comes to mind in this context is“????(kachi-kachi), a.k.a. tic-toc.

 

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Fri, 02/06/2015 - 19:44 | 5753737 dimwitted economist
dimwitted economist's picture

i know right...... same here in obama's america.

Fri, 02/06/2015 - 19:47 | 5753747 Cognitive Dissonance
Cognitive Dissonance's picture

If you don't like the cards being dealt just stack the deck. It works right up to the point when the casino burns to the ground.

Fri, 02/06/2015 - 19:50 | 5753759 El Vaquero
El Vaquero's picture

I've got some gasoline an some roman candles.  You bring the marshmellows, Cog.  

Fri, 02/06/2015 - 19:58 | 5753784 Looney
Looney's picture

Hey, Yakufucka Harada, why dontcha start bottling the radioactive water from Fukushima and sell it to the remaining few reproductively-active Japanese to deflate your country’s birth-rate, you fucking cunt!

Looney

P.S. I've just sniffed Elmer's Glue - this shit ain't workin' ;-)

P.P.S. Should I try a hot-glue-gun instead?

Fri, 02/06/2015 - 20:08 | 5753808 Publicus
Publicus's picture

Printing money to fund economic activities is the solution to all our problems.

 

A personal startup with unlimited funding for everyone. The ultimate enpowerment.

Fri, 02/06/2015 - 20:12 | 5753846 knukles
knukles's picture

Hey Mo!  Look!  Nyuck nyuck nyuck wooo wooo wooo woooh

Fri, 02/06/2015 - 20:23 | 5753904 max2205
max2205's picture

If Japan was my CFO I'd fire him 

Sat, 02/07/2015 - 14:03 | 5755827 OpTwoMistic
OpTwoMistic's picture

What dread of deflation? Are you speaking of the one where the prices of food declines?

Fri, 02/06/2015 - 20:37 | 5753950 serotonindumptruck
serotonindumptruck's picture

The Japanese people value Honor perhaps more than any other virtue. Any discussion of the nuclear meltdown at Fukushima Dai-ichi is an extremely disgraceful admission of FAILURE that reflects upon the Japanese people as a whole.

While it may not be illegal (in a literal sense), any discussion of the ongoing nuclear crisis at Fukushima is highly discouraged, and anybody who chooses to breach this social protocol is generally shunned and marginalized within Japanese society.

Meanwhile, the childhood leukemias and thyroid cancers are beginning to manifest themselves by orders of magnitude on a linear time scale.

General Electric and Toshiba must be ecstatic at the lack of liability while this Extinction Level Event progresses to its logical conclusion.

Fri, 02/06/2015 - 20:51 | 5753995 disabledvet
disabledvet's picture

Honor is a weird thing.

 

On the one hand you say nothing.

 

On the other hand...

You say nothing.

Fri, 02/06/2015 - 21:03 | 5754035 serotonindumptruck
serotonindumptruck's picture

And then on the other hand, you're a statist prick who will NEVER be better than me.

Bring it, you fucking cocksucker.

Fri, 02/06/2015 - 21:35 | 5754142 The Blank Stare
The Blank Stare's picture

Would you like it if I constantly talked about your loser brother? Not honor anymore pal, just non-confrontational. That's why random violence is on the rise there. People are snapping all over the place, in front of trains, attacking children....you don't see this behavior in the good ole USA where we can yell at our local football team all Sunday, or complain about our wonderful president.

Fri, 02/06/2015 - 21:19 | 5754096 JRev
JRev's picture

Not just Fukushima, but virtually anything of political or social consequence in general. My mother's side of the family is Japanese. Genuinely wonderful people. That being said, Japan gets so much international credit for being such a "polite" society, which, when you translate the euphemism, really means "socialized automatons with public masks." You can't talk about ANYTHING of consequence there without being shunned from society.

Sun, 02/08/2015 - 22:25 | 5754396 Lore
Lore's picture

They're stupid if they actually confuse moneyprinting with growth or believe that it somehow benefits the real economy. I sense that the Japanese are doing someone else's bidding, destroying the national capital against their will. 

Russia to develop system to filter radioactive Fukushima water (28-Aug)

Fri, 02/06/2015 - 19:56 | 5753789 kaiserhoff
kaiserhoff's picture

After all these years, we expected something else?

This is like a slow motion train wreck.  Heart breaking to watch, but you can't take your eyes off the damn thing.

 

Fri, 02/06/2015 - 19:48 | 5753755 Drummond
Drummond's picture

They're gonna run out of ink

Fri, 02/06/2015 - 19:57 | 5753792 fascismlover
fascismlover's picture

If they were smart, they should be printing ships that can take them to printed islands that are protected by printed bullets and thugs.  They are printing their own demise unless they are printing something directly useful to them.

Fri, 02/06/2015 - 20:19 | 5753882 James-Morrison
James-Morrison's picture

Great idea.

They haven't even tried 3D printing yet.

Just print more factories!

That will kick-start the economy.

Fri, 02/06/2015 - 20:08 | 5753794 kaiserhoff
kaiserhoff's picture

A man who understands supply side economics;)

Fri, 02/06/2015 - 19:49 | 5753758 Kaiser Sousa
Kaiser Sousa's picture

this why they hate and fear real money, and why days like today have occured goin on 7 years and counting...

PHOENIX — Calling it a "constitutionally protected right,'' a House panel voted Wednesday to allow — but not require — the state and businesses here to accept gold and silver coins as legal tender. Rep. Mark Finchem, R-Oro Valley, said the problem with a system based solely on federal reserve notes is that it is subject to inflation. Put simply, the buying power of each dollar decreases over time. He said HB 2173 protects against that. "When we have a fiat currency that is continually bouncing up and down relative to the price of oil and other market conditions, we are at risk,'' he said.

But the real purpose of the law appears to be to protect those who invest in the coins from taxes. Right now gold and silver is treated like any other commodity or stock. If someone buys something at $500 and sells it at $1,500, they have a capital gain of $1,000 which is taxable.

There is nothing Arizona can do about the Internal Revenue Code. But SB 2173 would spell out that the buying and selling of such coins is not an investment under Arizona law and therefore not subject to state capital gains taxes. That factor concerned Rep. Bruce Wheeler, D-Tucson, who pointed out that no one knows what the state might lose in tax revenues. But the measure was approved on a 5-2 vote by the House Committee on Federalism and States' Rights.

A similar measure was approved by the Legislature in 2013 only to be vetoed by Gov. Jan Brewer who expressed similar concerns. That leaves Utah as the only state with such a law."

http://tucson.com/news/state-and-regional/arizona-panel-oks-gold-silver-...

DEATH TO THE MOENYCHANGERS.

Fri, 02/06/2015 - 20:10 | 5753837 seek
seek's picture

Just to be clear, that article is in error. Gold coins aren't treated like any other commodity or stock with respect to taxability. Stock capital gains rates are are 20% max, and can be zero.

Gold coins are taxed as a collectible, which is a 28% rate, end story. No surprise gold holders are penalized.

Fri, 02/06/2015 - 20:14 | 5753854 knukles
knukles's picture

Gotta love it when the State says it's OK to pay your taxes in gold.
Fuck me.....

Fri, 02/06/2015 - 20:21 | 5753891 seek
seek's picture

And the governor veto'd it!

There's a hardcore anti-Fed/pro-gold/Goldwater republican (borderline libertarian) faction in AZ gov't, they've been pushing this one for a while. I think the overall scheme is that the Feds won't make the state pay the cap gains tax, so this is an effective way of "spending" the gold with no cap gains tax. If it passed legal challenges it could easily make AZ a dumping ground for people selling gold. If the state was smart they'd build a premium into the exchange rate and profit like crazy.

Sat, 02/07/2015 - 08:50 | 5755260 NidStyles
NidStyles's picture

Gold is non-taxable if being exchanged for a like instrument. A like instrument being something like a currency called CASH.

 

All of you have got it wrong. Cash for gold, and gold for cash is a completely non-taxable process.

Fri, 02/06/2015 - 19:50 | 5753760 realmoney2015
realmoney2015's picture

The currency war is a race to the bottom. Who can devalue their currency the most. The dollar has lost 95% since the Fed was given money printing power. Get your wealth out of fiat currencies and into real money. Silver is a store of value. It has been used as money for thousands of years. It will hold its value long after these fiat currencies are dead. 

A great way to get your loved ones into using silver are these candles with silver coin prizes: https://www.etsy.com/shop/ScentSavers?ref=hdr_shop_menu 

They will have a small start with their first silver coin, but they will understand the real value of silver when they discove that their coin is 12-18 times more valuable than face value!

Fri, 02/06/2015 - 19:59 | 5753802 jim249
jim249's picture

Not a good deal. $20.00 for a lousy silver dime? Don't think so!

Fri, 02/06/2015 - 23:36 | 5754463 Lore
Lore's picture

Seems messy and overcomplicated. A shiny coin placed in the hands of a young inquiring mind is more alluring, less potentially dangerous, and enables a memorable teachable moment, especially if you're careful to save it for an age when the child is tempted to spend it, opening the door to a rich and memorable learning experience. JMO...

Fri, 02/06/2015 - 19:50 | 5753761 realmoney2015
realmoney2015's picture

The currency war is a race to the bottom. Who can devalue their currency the most. The dollar has lost 95% since the Fed was given money printing power. Get your wealth out of fiat currencies and into real money. Silver is a store of value. It has been used as money for thousands of years. It will hold its value long after these fiat currencies are dead. 

A great way to get your loved ones into using silver are these candles with silver coin prizes: https://www.etsy.com/shop/ScentSavers?ref=hdr_shop_menu 

They will have a small start with their first silver coin, but they will understand the real value of silver when they discove that their coin is 12-18 times more valuable than face value!

Fri, 02/06/2015 - 20:08 | 5753832 PresidentCamacho
PresidentCamacho's picture

You Sir are an entrepenur of the highest grade. Sounding the alarm and making a profit off of it!

Fri, 02/06/2015 - 19:52 | 5753770 NoDebt
NoDebt's picture

"We just need to print money."

I can't believe I never thought of that before.

Fri, 02/06/2015 - 20:03 | 5753815 kaiserhoff
kaiserhoff's picture

Nothing succeeds like excess.

Fri, 02/06/2015 - 20:16 | 5753870 knukles
knukles's picture

Kaiser, it's the Mae West Quantity Theory of Everything

 

If some is good
And a whole lot more is better
Then way the fuck too much is just about right

Fri, 02/06/2015 - 20:24 | 5753907 kaiserhoff
kaiserhoff's picture

I hope that's true.

In any case, it sounds like the story of my life;)

Fri, 02/06/2015 - 19:52 | 5753772 css1971
css1971's picture

They don't need to print more. They obviously need to print the morest.

Ring up that infinity sign and stick it on your notes pal.

Fri, 02/06/2015 - 19:53 | 5753777 f16hoser
f16hoser's picture

WOW! Print more money. You're a Fucking Genious Gump. Whatever they're paying you it's way to much...

Fri, 02/06/2015 - 19:53 | 5753779 css1971
css1971's picture

Here's the thing.

These people will remain in place until forcibly removed.

Fri, 02/06/2015 - 19:56 | 5753791 Bunga Bunga
Bunga Bunga's picture

Moar moar moar.

Fri, 02/06/2015 - 20:06 | 5753826 suteibu
suteibu's picture

This is the end game. 

Truthfully, there is nothing else for them to do other than allow the economy to collapse, a politically impossible course of action.  Of course, the final results will be the same only not on Abe's watch...he hopes.

Fri, 02/06/2015 - 20:09 | 5753835 monad
monad's picture

export or die

Fri, 02/06/2015 - 20:28 | 5753899 henry chucho
henry chucho's picture

QE only works when it's combined with Quantitative Illegal Immigration,like here in the USA...For every billion dollars spent on QE,you must create aggregate demand,by letting in 1,000 on QII..Janet Yellen

Fri, 02/06/2015 - 20:24 | 5753908 km4
km4's picture

japan kamikaze 2.0

Fri, 02/06/2015 - 20:31 | 5753926 Joebloinvestor
Joebloinvestor's picture

They could try drafting everyone over 57 into a "Clean Fukishima" army.

 

Fri, 02/06/2015 - 20:47 | 5753984 Manipuflation
Manipuflation's picture

Another trip to the ATM to max out the daily withdrawal is complete .  My little scheme is working here.(kudos to the ZH'er who suggested doing it this way)  And boy does it ever feel good to fuck with bankers.  I don't owe you fucking banksters ANYTHING.  Like I posted yesterday about when I was talking to that young banker who felt the need to call me.  Don't you understand that I don't owe anyone anything much less you? I said in so many terms something like this but I didn't swear at him, "You are not paying me any interest on what monies sit in my account so what the fuck do you care if I withdraw it all?  I already know how you fuckers work, you are lending my money on an overnight basis and reaping rewards off my digits while giving me nothing in return.  Basically, the money is not even there at any given time in the account.  Then you tell me I have to order cash and then fill out IRS paperwork to get my cash?".    

The guy did not know what to say.  What the fuck do they teach these kids?  He called me.  "But sir we offer financial products that can give you XYZ return"  I replied, "I do quite will own with my own investing strategy which obviously works because while I not rich I have no debt and I don't trust".  I asked him what the underlying assets were on his so-called "financial products" were and he didn't know.  Of course not.  He didn't even know what MFGlobal was.  

Being rich was never a goal in life for me:  Having no debt was.  I am happy.  There were a lot of ramen noodles and rice in there over the years.  There were a lot of silver purchases though too.;-)  There will be MOAR purchases forthcoming.       

Fri, 02/06/2015 - 20:57 | 5754014 disabledvet
disabledvet's picture

Freedom! Democracy! And STUFF!

 

Its Friday!

Time to party!

Fri, 02/06/2015 - 21:15 | 5754084 yogibear
yogibear's picture

Get to it  and continue print like there's no tomorrow. Destroy yourself!

Fri, 02/06/2015 - 21:17 | 5754090 cwsuisse
cwsuisse's picture

QE works only (temporarily) in combination with continuous falsification of statistical data, like in the US.

Sat, 02/07/2015 - 01:37 | 5754856 teslaberry
teslaberry's picture

if honor is persistent theft, than the leadership of japan's government and banks are extremely honorable. 

 

frankly, we all know that history is also pushed forward by honorobal and ambitious peasants .

 

no one is born a king. you become a king by honorably stealing as much as you can. it is the way of  nature. 

 

have you ever wondered how qeen ants evolved ? or queen bees? or queen termits?

 

they essentially evolved to emit an odor that keeps the ants they give birth to from killing them by , one way of the other, intoxicating them to take care of the queen. 

 

she might not have a glamorous job, but queens can outlive every ant in the nest . there's one theory about how it originally happened. as a means of controlling mating. of course, no one will ever really know for sure. 

http://phys.org/news/2014-01-class-queen-pheromones-worker-reproduction....

Sat, 02/07/2015 - 05:33 | 5755089 AbbeBrel
AbbeBrel's picture

This says the Japanese monetary endgame better than I can put it into words:

https://www.youtube.com/watch?v=kXu4uW84uzg

Sat, 02/07/2015 - 07:56 | 5755204 Midnight Hour
Midnight Hour's picture

You can print as much fiat Money as you like, but if the Person who they want to go out and spend it on useless Crap has no Notes in his Wallet he cannot spend any. Now if you gave him a job at 40 hours a week and paid him $20+ for it the whole game would change. Shops would be full of Shoppers and Bankers would be happy, more funds for them to gamble with and after they loose the lot again we start the whole game again, A win for every one, only now the Printers will have to work overtime to keep up with demand.

Sat, 02/07/2015 - 13:11 | 5755725 JenkinsLane
JenkinsLane's picture

The patient needs more leeches, more leeches doctor!

Sat, 02/07/2015 - 15:24 | 5756066 moneybots
moneybots's picture

 “If the BOJ buys all of the bonds from Japan’s debt market, that will create inflation without a doubt. That’s it,” Harada said.

 

That will create a bigger debt bubble.

 


Mon, 02/09/2015 - 07:46 | 5761193 Bad Santa
Bad Santa's picture

There surely are geniuses running the countries in this world. Or, shall I say 'jewniuses'. F**k this kind of future.

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