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Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (146605)	10/31/2014 9:57:40 AM
From: RetiredNow	Read Replies (1) \| Respond to of 149317

So now Japan has gone all in on QE with their latest announcement. Did you know that quite literally, the size of their new QE will consume every Yen of new debt that their government issues to finance their deficits? This is full debt monetization. They are quite literally about to embark on financing their entire deficit with newly printed Yen. So here's my question for you. What long term impacts will this have? Short term, I am 100% sure this will goose their stock market upwards. It has to. But what are the long term impacts of this policy? BTW, in my many years of reading economics books, I came across a proposition from some economist whose name I forget. He claimed that contrary to popular belief, hyperinflation doesn't normally begin from accelerating inflation. Rather, it begins when governments spend too far beyond their means and rack up so much debt that their growth slows considerably igniting bouts of DEFLATION. So they then try to goose growth and fight Deflation by lowering rates, then by printing money, until so much money is printed that they finance all their deficits with it. Then that is the tipping point beyond which it is generally considered the point of no return. Kind of like a black hole. Once you are beyond the event horizon, you cannot escape. Japan has just announced they are going to move their economic ship into the event horizon. God help them. No else can now. Here in the US, we just pulled back from the brink with QE, but I wonder how long that will last. If we get hit with another recession right now, our own Fed could reintroduce QE pretty darned fast. It's addictive...like heroin.