Cross-posted from Smirking Chimp
Japan's Finance Minister Taro Aso speaks during a semi-annual parliament hearing on monetary policy at the Lower House of the parliament in Tokyo
(Image by CREDIT: REUTERS/ISSEI KATO) Permission Details DMCA
It looks like QE is going to end with a whimper instead of a bang.
The bigwigs in the G-20 have put the kibosh on Japan's money printing extravaganza. While most analysts expect the Bank of Japan (BoJ) to announce more "easing" in the days ahead to counter weakening economic data and droopy stock prices; it's not going to happen. Why? Because the big boys have told the BoJ to knock it the hell off, that's why. Here's the scoop from the Japan Times:
"Despite lingering market pressure on the Bank of Japan to take further easing steps, its Group of 20 counterparts might not welcome the central bank's next move.
"With concern mounting about how the BOJ's unprecedented purchases of government bonds and risky assets will impact global markets, the G-20 finance chiefs might pressure the BOJ in the near future to clarify how it will phase out the deflation-busting measures...
"Japan Bank for International Cooperation Gov. Hiroshi Watanabe said additional BOJ easing measures would not be supported by the United States, which is gradually reducing its own bond purchasing program.
"'I'm not sure whether it is good for the United States and Japan to look in much different directions,' Watanabe, a former vice finance minister for international affairs, said in a meeting with reporters earlier this month. 'I don't think the United States will support... further BOJ easing.'" ("Experts urge BOJ to draft exit strategy," Japan Times)
Repeat: "...additional BOJ easing measures would not be supported by the United States."
In other words, "Stop what you are doing...NOW."
Of course, the BoJ could resist and defend its independence, but how likely is that? That would suggest that the BoJ doesn't get its marching orders from Washington, which it does, just like everyone else in the western banking cartel. So what's probably going to happen is this: BoJ chief Haruhiko Kuroda will come up with a number of goofball excuses for winding down the policy to conceal the real power-dynamic behind the decision. But the truth is obvious, Washington has ordered the BoJ to stop printing, and dad-gum-it, Japan is going to fall in line...or else. That's how things work in this-here empire.
But why the sudden turnaround? After all, Abenomics has been around for more than a year and none of the bigshots at the Fed or the G-20 ever spoke up against it. Everyone seemed to think that QE was the greatest thing since sliced bread. Now Watanabe and Co. want to slam on the brakes and return to more conventional policies. Why? Let's take another look at the article in the Japan Times and see what they say:
"In light of the side effects of the radical program, which could also take a toll on the global economy, the BOJ must map out an exit strategy from what it calls 'quantitative and qualitative monetary easing,' pundits said.
"Some central banks have created a framework for avoiding the adverse impact of such policies, former BOJ Deputy Gov. Kazumasa Iwata said in a recent interview. 'The BOJ also ought to set certain conditions and mechanisms toward the normalization of its current policy.'" (Japan Times)
Hold on there, partner. What's all this talk about "adverse impact," "radical program," and QE "could take a toll on the global economy"? This is the first time any of the so called experts have whispered a word about adverse effects from QE. Up to now its all been rosy projections, green shoots, and silver linings. You mean there could be unintended consequences from printing up more than $10 trillion in funny money and shoving it into financial systems around the globe?? Is that what this is all about? Here's more:
"'If the current large-scale monetary easing policy were to be protracted or such policy strengthened by additional measures, the associated side effects would instead outweigh the positive effects, and this would undermine economic stability in the long run,' BOJ Policy Board member Takahide Kiuchi said last month." (Japan Times)
So the toffs think QE is actually dangerous. Well why didn't someone think of that five years ago when the Fed first launched this bonehead program? You mean, central banks have been flying by the seat of their pants with absolutely no freaking idea the impact their wacko policies could have on the global financial system? Doesn't that seem a tad reckless to you, dear reader, or am I just over-reacting? Here's more:
"Some experts have expressed caution that the BOJ may draw international criticism if it takes additional credit easing measures that could have strong side effects without preparing an exit strategy...