Japan’s Last Stand – Portent Of Keynesian Collapse | Zero Hedge.
Abenomics ‘hope’ and ‘reality’ explained by Diapason Commodities’ Sean Corrigan – do you believe in miracles? After last night’s Japanese GDP print, hope is all that is left (dripping with sarcasm)
So, if the BOJ can just move prices up for long enough, people will start to demand higher wages while companies will gladly accede, since they will be able to count on the Bank printing enough new money for them to meet the extra expense. As such higher wages are spent, this will mean that both the employers’ sales and, miraculously, their profits will increase to the extent that they will soon be jostling to hire more of these nominally costlier workers.
Somehow or other, in one of those Deep Purple, ‘I want everything louder than everything else’ moments, wages will outstrip prices (so avoiding a disastrous fall in real incomes) yet payrolls will rise alongside wages since profits will outpace the gain in the outlay on labour.
Moreover – and here we get to the crux of the issue – though all this new cash is being generated by monetizing vast, ongoing government deficits, the debt stock will rise more slowly than prices, so postponing, if not indeed averting, the nation’s long feared budgetary implosion as it is painlessly inflated away.
Oh – and there will be no first-user Cantillon inequities, no unintended consequences, no spill over to other countries, no undue enrichment or undeserved immiseration of any member of the domestic populace along the way.
Truly Kuroda-san is a mage of the highest order!
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