Fujimaki: Japanese Hyperinflation! (Again!)

It's been fairly ease on the JGB collapse front; apparently, people got tired of losing coin shorting the things. However, this has non stopped Takeshi Fujimaki from re-iterating his Japanese hyperinflation call.


Fujimaki:

Nippon has ballooning debt too the BOJ is financing debt, that’s the problem,” Fujimaki said. “The yen volition weaken farther too the guide chances heightens of a difficult landing. There is no struggle on an operate out policy, too hence 1 time the economic scheme improves, it volition bust too in that place volition last hyperinflation. 

The reporter noted that he has been calling for a JGB selloff for xx years, simply mercifully did non refer his "Hyperinflation past times 2015!" call.

This is peradventure a sign that the JGB bears may outset waking upwards from hibernation. Although they volition in all probability induce got to prepare about novel material; the "debt-to-GDP ratio is actually high!" floor is starting to audio somewhat lame.

Looking dorsum at my master copy article from 2013, I noted the commentary below. It seems bearishness on Japanese increment was the correct call...

But to halt off on a to a greater extent than serious note: this is purpose of a force to elevate the Japanese consumption tax, which appears probable to occur. The theory is that the planned financial policy shifts are supposed to last neutral for growth, every bit in that place volition last offsetting stimulus undertaken. I practise non induce got a fancy model of the comport on of their proposed financial changes, simply it seems that they are effectively replacing “high multiplier” spending past times “low multiplier” spending. In guild for the comport on to last neutral on growth, the financial deficit would induce got to last larger. Additionally, I am skeptical that businesses volition induce got upwards investment incentives inwards the electrical current sluggish increment surround – particularly if domestic consumption falls due to the taxation hike. And so, it appears highly possible that Japanese policymakers volition campaign their economic scheme into recession even too hence 1 time again due to a foolish focus on financial ratios.

(c) Brian Romanchuk 2015