Japanese Policy Makers Keep Failing
Q2 2016 GDP for Japan showed no growth for the ailing and aging economy; 0.0% quarter-to-quarter, and .2% year-over-year; not good, that is recession, and with inflationary pressures still low.
The Japanese are showing the rest of the world what not to do. Sadly, the rest of the world doesn’t seem to be paying attention, and that includes the NY Fed and the Obama administration.
Japanese PM Abe and the Diet have accumulated trillions of dollars in debt in the name of stimulating the economy. The Bank of Japan led by Kuroda has printed trillions in new money, intervened in every asset market, is soon to be the largest share holder of over 55 major Japanese companies, and have moved to negative interest rates to force banks to lend more, and still nothing changes the outlook.
For Japanese policy makers the only idea for how to respond is more free money, more debt, and ultimately a weaker YEN to boost exports and save the mercantilist economy. This is a lesson for US policy makers; are they watching?