Japan’s prime minister threatens to unify monetary and fiscal policy

Greetings to you all on Christmas Eve. I think the big deal today is not America or Europe, but Japan. The incoming Japanese Prime Minister is threatening to strip the Bank of Japan, the central bank, of its independence. What Mr. Abe said is that the Bank of Japan needs to set at least a 2% inflation target. And he went further, saying that if they do not, he would "revise the Bank of Japan law and set" the 2% target himself. This is serious stuff. And Abe won the election in a landslide. So he can do this, there is no doubt.
Like a lot of macro analysts, I look to Japan now because they are at the forefront of the debt deflationary revolution we have entered at this end of a debt super cycle. They got to peak debt first. Japan resorted to zero rates first. And these zero rates turned in...


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