Stuck in Keynesianism and no way out anyway, Prime Minister Abe calls hyperinflation worries "unfounded".
(So, hyperinflation joins radioactive materials as "baseless rumor".)
From Dow Jones Business News, quoted at NASDAQ (2/5/2013; kind of fitting):
Japan PM Says Hyperinflation Worries 'Unfounded'
TOKYO--Japanese Prime Minister Shinzo Abe said Tuesday in parliament that worries of the central bank's inflation target triggering hyperinflation are unfortunate and unfounded.
"It's unfortunate that there are people who tout the mostly unfounded fears of hyperinflation," Mr. Abe said in a lower house plenary session.
"By building a sustainable fiscal framework we will dispel such worries," he said.
Mr. Abe also denied allegations by an opposition lawmaker that last month's accord between the government and Bank of Japan on the 2% inflation target threatened the central bank's independence, adding that the government will leave the methods of achieving the target up to the central bank.
The prime minister also fended off criticism about his government spending its way out of stagnation, saying that his economic policies will eventually pave the way for sustainable private sector growth in the mid- to long-term.
Write to Toko Sekiguchi at toko.sekiguchi@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
Abe's time horizon must be really, really long and far out into the future. 20-plus years of mostly LDP administrations after another trying to spend its way out of stagnation haven't resulted in sustainable private sector growth.
Growth or no growth, Abe can do what the US government has been doing so that there is no inflation that is not 2%. All he has to do is to cheery-pick the data - eliminate prices of goods that are rising too fast, and prices of goods that are sinking. And use Ben Bernanke's and Obama administration's line that the rising stock market makes people feel happy and prosperous so that they spend money that they don't have.
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5 comments:
Hyperinflation in Japan will be like a small crack in a river dam. The crack starts small, and the dam will continue to hold water for a while. At some point, the crack will grow too big, and the dam will collapse in a catastrophic way from the huge amounts of water being held back.
Right now in Japan (like in the US and in the EU), the crack in the dam is small, but there is a crack, and it is growing.
You seem to know very little about economics.
Feel free to share your expertise, anon above.
Hyperinflation in Japan may well be just a rumour. Baseless, however, it is not.
We are not there yet. First we have to see some scary inflation. That will start with rising energy prices. With the yen falling 20% already, that has already started. Stealth inflation can clearly be visible to those with eyes that shop. Packages are the same price but grams have been reduced. Rice is up 30% since 3.11. Utilities ahave been raised across the boards. State pensions have been cut 10%. All this..and it hasn't even started yet.
Japan can hyperinflate or default. With the government we have right now and their moves to take over the BofJ, we can see they plan to hyperinflate. Open ended asset purchases postponed to 2014. Business will be lent upon to increase wages. Gold is moving up.
There's alot to see if you have eyes.
Anon at 8:47PM, this blog was a financial/economic blog before it was Fukushima blog.
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