Where have we seen this before? Oh, that’s right, more of the same policy for the past 25 years. Think it’s going to work this time??? Insanity. Economic growth does not come from the central bank or the government. Duh. This is part of a coordinated central bank effort to depreciate fiat currencies and existing public debt. Guess who’s picking up the check?
Japan unveils Y10.3tn stimulus package
Shinzo Abe, Japan’s prime minister, has unveiled a Y10.3tn ($116bn) economic stimulus package that the government expects will lift the country’s gross domestic product by 2 per cent and create 600,000 jobs.
“We are making a bold shift … towards an economic policy that will create wealth through economic growth,” Mr Abe said on Friday.
From the FT:
Prime minister Shinzo Abe promised further measures to reflate the Japanese economy as he unveiled a Y10.3tn ($116bn) economic stimulus package that the government says will lift gross domestic product by 2 per cent and create 600,000 new jobs.
“The stimulus package we put together this time is on a different scale from previous measures,” Mr Abe said on Friday, “[it] will be the first of a unified policy package that we will implement strenuously.”
Japan’s prime minister also increased pressure on the Bank of Japan, saying that “a bold monetary policy” was crucial to regaining economic growth and calling on the central bank to do its part to boost job creation.
In addition to achieving a 2 per cent target for price inflation, which the government is pressing the BoJ to commit to, “we would like the BoJ to take responsibility for the real economy. I think that means jobs. I would like the BoJ to think about maximising jobs,” Mr Abe told the Nikkei newspaper.
Pointing out that the US Federal Reserve has indicated it would keep interest rates low until unemployment fell to about 6.5 per cent, Mr Abe said the candidate to replace BoJ governor, Masaaki Shirakawa, who is stepping down in April, should be someone who “fully understands that the Bank of Japan has a big role and a clear role in maximising jobs”.
To combat the yen’s appreciation, which has hurt many of Japan’s export-oriented companies, the plan calls for the government to use Japan’s foreign exchange reserves to buy bonds issued by the European Stability Mechanism on a regular basis and to support the funding of overseas mergers and acquisitions by Japanese companies.
After the announcement, the yen weakened as far as Y89.35 to the dollar, reaching its lowest point against the US currency since June 2010.