done by
ahmad mohammed noor
s200306271
ahmad mohammed noor
s200306271
Buried in the avalanche of Hurricane Sandy news was a tid bit from Japan's economy, of course, is the test tube baby for monetary policy in a zero growth environment. If you want to know what happens to an economy when the central bank takes over in the aftermath of a collapsed bubble, you have to look at Japan. Yesterday, the Bank of Japan lowered its growth forecast for the Japanese economy has been weakening. Specifically, traders were looking for Japan to expand its asset purchase program and Japan did expand the program, but not by as much as the market had hoped, judging by stock market numbers.
The Nikkei 225 closed at 8841 still quite a ways from 38,916, the all-time high in December of 1989. is going to take a lot more than the $1. 4 trillion in new asset purchases the BoJ announced yesterday to reflate Japanese stocks. This announcement is that asset purchases would expand to include exchange traded funds and real estate invd estment trusts. risk assets Normally, these asset purchases programs are confined to government bonds in order to keep interest rates (the cost of credit) down in the economy. Ever since then, the people who spend money (fiscal policy) and the people who print money (the Bank of Japan) have tried every trick in the book to reflate the stock market and real estate sector. However, the little tiff with China over disputed territory in the East China Sea has affected exports over the last few months.
What japan economy needs is a trade war with one of its biggest trading partners. Asset purchase doesn’t fix an economy where a debt bubble has burst. Blowing up one bubble after another in an attempt to reflate financial asset values has done exactly nothing to create US manufacturing jobs, although it did put a lot of real estate brokers to work for about four years. Central Bank crash is not moving markets the way they used to. The other more practical reason the money printers are struggling to move stocks is that in a large, debt-based system, the debt must continually expand to prevent asset prices from falling.
Dan, Denning. "Japan’s Economy: The Test Tube Baby for Monetary Policy" access on 06/11/2012
<http://www.dailyreckoning.com.au/japans-economy-the-test-tube-baby-for-monetary-policy/2012/10/31/>
The Nikkei 225 closed at 8841 still quite a ways from 38,916, the all-time high in December of 1989. is going to take a lot more than the $1. 4 trillion in new asset purchases the BoJ announced yesterday to reflate Japanese stocks. This announcement is that asset purchases would expand to include exchange traded funds and real estate invd estment trusts. risk assets Normally, these asset purchases programs are confined to government bonds in order to keep interest rates (the cost of credit) down in the economy. Ever since then, the people who spend money (fiscal policy) and the people who print money (the Bank of Japan) have tried every trick in the book to reflate the stock market and real estate sector. However, the little tiff with China over disputed territory in the East China Sea has affected exports over the last few months.
What japan economy needs is a trade war with one of its biggest trading partners. Asset purchase doesn’t fix an economy where a debt bubble has burst. Blowing up one bubble after another in an attempt to reflate financial asset values has done exactly nothing to create US manufacturing jobs, although it did put a lot of real estate brokers to work for about four years. Central Bank crash is not moving markets the way they used to. The other more practical reason the money printers are struggling to move stocks is that in a large, debt-based system, the debt must continually expand to prevent asset prices from falling.
Dan, Denning. "Japan’s Economy: The Test Tube Baby for Monetary Policy" access on 06/11/2012
<http://www.dailyreckoning.com.au/japans-economy-the-test-tube-baby-for-monetary-policy/2012/10/31/>
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