{"id":21250,"date":"2016-06-25T07:44:23","date_gmt":"2016-06-25T12:44:23","guid":{"rendered":"http:\/\/olduvai.ca\/?p=21250"},"modified":"2016-06-25T07:44:23","modified_gmt":"2016-06-25T12:44:23","slug":"will-japan-be-the-first-to-test-the-limits-of-quantitative-easing","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=21250","title":{"rendered":"Will Japan Be the First to Test the Limits of Quantitative Easing?"},"content":{"rendered":"
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WILL JAPAN BE THE FIRST TO TEST THE LIMITS OF QUANTITATIVE EASING?<\/a><\/h3>\n<\/header>\n
The Japanese stock market peaked in December 1989, marking the end of a period of economic expansion which briefly saw Japan eclipse the USA to become the world\u2019s largest economy. Since its zenith, Japan has struggled. I wrote about this topic, in relation to the economic reform package dubbed Abenomics, in my first\u00a0Macro Letter \u2013 Japan: the coming rise<\/strong><\/a>\u00a0back in December 2013:-<\/div>\n
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As the US withdrew from Japan the political landscape became dominated by the LDP who were elected in 1955 and remained in power until 1993; they remain the incumbent and most powerful party in the Diet to this day. Under the LDP a virtuous triangle emerged between the Kieretsu (big business) the bureaucracy and the LDP.\u00a0Brian Reading (Lombard Street Research)<\/strong>\u00a0wrote an excellent, and impeccably timed, book entitled\u00a0<\/em>Japan: The Coming Collapse<\/em><\/strong>\u00a0<\/em><\/a>in 1989. By this time the virtuous triangle had become, what he coined the \u201cIron Triangle\u201d.<\/em><\/p>\n

Nearly twenty five years after the publication of Brian\u2019s book, the\u201d Iron Triangle\u201d is weaker but alas unbroken. However, the election of Shinzo Abe, with his plan for competitive devaluation, fiscal stimulus and structural reform has given the electorate hope.\u00a0<\/em><\/p><\/blockquote>\n

In the last two years Abenomics has delivered some transitory benefits but, as this\u00a0Japan Forum on International Relations \u2013 No. 101: Has Abenomics Lost Its Initial Objective?<\/strong><\/a>describes, it may have lost its way:-<\/p>\n

The key objective of Abenomics is a departure from 20 year deflation. For this purpose, the Bank of Japan supplied a huge amount of base money to cause inflation, and carried out quantitative and qualitative monetary easing so that consumers and businesses have inflationary mindsets.\u00a0<\/em><\/p><\/blockquote>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

WILL JAPAN BE THE FIRST TO TEST THE LIMITS OF QUANTITATIVE EASING? The Japanese stock market peaked in December 1989, marking the end of a period of economic expansion which briefly saw Japan eclipse the USA to become the world\u2019s largest economy. Since its zenith, Japan has struggled. I wrote about this topic, in relation […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1265,57,85,7380,14105,175,195,452,538,661,662],"class_list":["post-21250","post","type-post","status-publish","format-standard","hentry","category-economics","tag-abenomics","tag-bank-of-japan","tag-boj","tag-cobden-centre","tag-colin-lloyd","tag-credit","tag-debt","tag-japan","tag-money-printing","tag-qe","tag-quantitative-easing"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21250","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=21250"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21250\/revisions"}],"predecessor-version":[{"id":21251,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21250\/revisions\/21251"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=21250"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=21250"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=21250"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}