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Bank of Japan US Fed Down Easy Money Trail

Posted by Steve Markowitz on September 19, 2012

The Wall Street Journal today reported that the Bank of Japan (BOJ) has aggressively moved to expand the money supply in Japan.  In making the announcement the Journal stated that the BOJ took this step “after its analysis suggested that any economic recovery is at least six months away amid a global slowdown”.  This statement is comical given that Japan has been in an economic slump for over two decades!

The DOJ has joined the United States’ Fed and other central banks worldwide in an ongoing program of expanding money supplies.  Although similar efforts have failed in Japan for over two decades, sooner or later the central bankers will be successful in spite of themselves.  Unfortunately, their success will bring with it significant inflation.  While central bankers would like to use controlled inflation as a Trojan-Horse tax to pay off the huge debt overhanging many economies, the unintended consequence of this reckless behavior will be significant.

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