April 4, 2013

UNLESS THE HELICOPTERS ARE DROPPING BABIES, YOU CAN'T BREAK THE CYCLE:

Bank of Japan follows the Fed, on steroids (Gavyn Davies, 4/04/13, Financial Times)

In effect the new governor, Haruhiko Kuroda, has imported into Japan the whole of the Federal Reserve's post-Lehman balance sheet strategy, and he will implement it in under two years, instead of the five years or more taken by the Fed. The doubling in the Japanese monetary base over a period of 21 months is in itself remarkable. Taken together with the extension of the duration of bonds purchased from less than 3 years to an average of 7 years, the injection becomes of historic proportions.

The new strategy brings, for the first time, a real prospect of breaking the deflationary psyche which has plagued Japan for so long. 

It's demographics, not psychology.

Posted by at April 4, 2013 7:49 PM
  

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