U.S., Japan, & The Eurozone Are Headed Down The Road To Serfdom/Fruitdom While Central Banks Are Creating A Pervasive Poverty Effect
“It is sad to say there are just two reasons why the U.S. is not yet a banana republic. The first reason is that the US dollar has not yet lost its world’s reserve currency status, which is helping to keep interest rates at record low levels. If the dollar, yen and euro were not involved in a currency war, the dollar’s intrinsic decline would become much more evident, causing domestic inflation to soar, and our bond market to immediately collapse.
While some love to speak about the return of ‘King Dollar,’ the truth is any nation that seeks to remain viable through the life support provided by its central bank purchases of sovereign debt, should be designated a banana republic–regardless of its geographic location. That is why the U.S., Japan, and the eurozone are headed down the road to serfdom, or fruitdom if you will. This is also why the unquestionable winner of all these currency wars will be precious metals and energy related investments.”
Central banks’ attempts to boost borrowing, consumption and wages by inflating asset bubbles leads to the poverty effect, not the wealth effect.
It’s becoming clear that Fed is becoming increasingly concerned about public perception, especially given all of the chatter about how the Fed is going to exit.
Yellen and Bernanke are laying the groundwork, explaining why although the lack of remittances might not be great PR-wise, they’re not technically problematic for any economic reasons.
Japan Central Bank Nominee Pledges to Do Whatever Needed to Combat Deflation; Mother of all Pyrrhic Victories
Those who thought Japanese Prime Minister Shinzo Abe was not serious in his pledge to defeat deflation (and destroy the Yen in the process) need think again.
Haruhiko Kuroda (Abe’s nominee to head Japan’s central bank) pledges to do Whatever Needed to Combat Japan Deflation.
Haruhiko Kuroda, nominated to be the next Bank of Japan governor, said that a central bank under his leadership would do whatever is needed to combat 15 years of deflation.
“I would like to make my stance clear that we will do whatever we can do,” Kuroda, the president of the Asian Development Bank, said in a confirmation hearing in the parliament in Tokyo today.
Prime Minister Shinzo Abe’s nomination of Kuroda has raised expectations for more aggressive monetary easing to revive the world’s third-biggest economy after Masaaki Shirakawa exits the job on March 19. The opposition Democratic Party of Japan, the largest party in the upper house, has signaled it will back Kuroda, easing his passage through a split parliament.