First it was The Fed's Janet Yellen coming "as close to capitulation on monetary policy's lack of efficacy," and now The Bank of Japan's Kuroda appears to have had an epiphany. In a stream of truth-filled consciousness unheard of for central planners, the governor admitted, among other things, that "monetary policy doesn't always turn out as expected," and that "many economists don't think financial markets always right," implying, of course, that he and his brethren know better. It appears that as central bank credibility collapses, so the central bankers themselves are having their own 'Greenspan'-moment when their life's work is finally proven entirely pointless.
The results of monetary and fiscal policies don’t always turn out as expected, Bank of Japan Governor Haruhiko Kuroda says in an interview on TV Tokyo, aired early on Wednesday.
His additional comments were just as ironic:
- FX and stock markets sometimes move too much.
- Many economists don’t think financial makets are always right.
- Kuroda says his personality is cautiously optimistic.
Given all that, now consider the following, excerpted from Kuroda’s opening remarks at the 2015 BOJ-IMES Conference:
The issues I have raised so far are all complex, and there are no quick, definitive solutions for them. Nevertheless, I strongly believe that, at this one-and-a-half day conference, we will address the issues we currently face and find our way forward through lively discussions. I trust that many of you are familiar with the story of Peter Pan, in which it says, "the moment you doubt whether you can fly, you cease forever to be able to do it." Yes, what we need is a positive attitude and conviction. Indeed, each time central banks have been confronted with a wide range of problems, they have overcome the problems by conceiving new solutions.
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With that, Kuroda has just confirmed that DM central banks are literally relying on a fairy tale to keep the global economy and financial system afloat.
At least he's being honest for once.