In a Bloomberg news report today, CLSA's iconoclastic forecaster extratrordinaire, Christopher Wood & Lombard Street's esteemed Brian Reading, are reported to have called upon the BOJ to normalize rates. Contrary to most neo-mercantilist apologists who worry about the possible entrenchment of pernicious deflation (vs. the logically and naturally occuring benign type witnessed in Japan over the past decade and a half), the duo suggest that normalizing rates will INCREASE consumption, buoy financial sector earnings and property prices, and set Japan on the road to retail recovery.
Having not seen my own copy of "Fear & Greed" yet, I am relying on Bloomberg's report that Wood doesn't expect this anytime over the next three months. Needless to say, I agree on all accounts, but have a more cynical and more Machiavellian view on BoJ intransigence which is that it is NOT the result of conservative policy error, but rather, the lynchpin in a well-honed trade & industrial policy that is intent on retaining all commercial advantage for its enterprises visa-vis both its customers and its primary east-Asian competitors.
I would so love to see the bar-room brawl between chief apologist Stanford's Prof MacKinnon, and the pragmatic and experienced prognosticator, Mr Wood, though, like BoJ policy, we are unlikely to witness this event any time in the next three months.
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Of course, the government will not like actually paying interest on all that money it is borrowing from the Japanese people to run the country.
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