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“We Just Need To Print More Money” Bank Of Japan’s New Board Member Clarifies Endgame

February 7, 2015

“We Just Need To Print More Money” Bank Of Japan’s New Board Member Clarifies Endgame

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.

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So far that’s not working out so great…

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