BOJ QE a Joke
By: Tim McPartland,
Now the Bank of Japan announces a giant QE bond buying program—–for what? The 10 year bond trades under 1/2% in Japan and the 2 year note is at 11 basis points. QE is going to stimulate the econony? NOT. You don’t need too much consumption of goods and services when your average age is 44-45 years (the only ‘older’ country is Monaco–and I’m not sure that counts for much). Check it here. There seems to be something wrong with starting a massive QE program while at the same time raising taxes massively–seems kind of counter productive to GDP growth.
Lets face it the Japanese demographics are totally against a growing economy—the only way to grow that economy is to create bunches of inflation–and maybe they will–but we doubt it.
The Japanese government debt now stands at 220% of GDP—this debt makes the U.S. Government look like a bunch of ‘tightwads’. 30 years ago their debt was 50% of GDP. Check it here.
BUT–all is good–we are all making money in our investments (except all commodities). But someday (who knows if it is next week, next year or next century) all of this financial engineering is going to end very badly.