Bank of Japan Governor Haruhiko Kuroda led a divided board to expand what was already an unprecedentedly large monetary-stimulus program, boosting stocks and sending the yen tumbling.Kuroda, 70, and four of his eight fellow board members voted to raise the BOJ’s annual target for enlarging the monetary base to 80 trillion yen ($724 billion), up from 60 to 70 trillion yen, the central bank said. An increase was foreseen by just three of 32 analysts surveyed by Bloomberg News. The BOJ also cut its forecasts for inflation and growth in Japan, the world’s third-biggest economy.Facing projections for failure to reach the BOJ’s 2 percent inflation target in about two years, and with the pressure from a higher sales tax, enlarging the stimulus at some point had been anticipated by analysts for months. Kuroda opted not to telegraph his intentions in recent weeks, leaving today’s move a surprise -- sending the Nikkei (NKY) 225 Stock Average to the highest level since 2007.“It was great timing for Kuroda,” said Takeshi Minami, Tokyo-based chief economist at Norinchukin Research Institute, one of two who correctly forecast today’s easing. Minami noted that it follows the Federal Reserve’s ending of quantitative easing, helping highlight the differing paths for the U.S. and Japan, which has the heaviest debt burden of any country. The yen sank 2.1 percent against the dollar to 111.55 as of 6:02 p.m. in Tokyo.Today’s decision comes almost 19 months after Kuroda unleashed his initial asset-purchase plan, with the intention of doubling the monetary base. That move similarly drove up stocks and undercut the yen. Since then, a more competitive exchange rate has triggered higher corporate earnings, and asset-price gains have expanded Japanese households’ net worth.
Well yeah, the point of quantitative easing is to raise that asset's price. Not sure why they expected anything otherwise.
Quote from: E̲n̲ga̲ge̲d̲T̲u̲r̲k̲e̲y on November 17, 2014, 10:51:00 AMWell yeah, the point of quantitative easing is to raise that asset's price. Not sure why they expected anything otherwise.Because Keynesians think monetary policy is ineffective at the ZLB.
Quote from: Meta Cognition on November 17, 2014, 10:57:21 AMQuote from: E̲n̲ga̲ge̲d̲T̲u̲r̲k̲e̲y on November 17, 2014, 10:51:00 AMWell yeah, the point of quantitative easing is to raise that asset's price. Not sure why they expected anything otherwise.Because Keynesians think monetary policy is ineffective at the ZLB.I have no clue what that means
Quote from: DAS B00T x2 on November 17, 2014, 12:27:12 PMQuote from: Meta Cognition on November 17, 2014, 10:57:21 AMQuote from: E̲n̲ga̲ge̲d̲T̲u̲r̲k̲e̲y on November 17, 2014, 10:51:00 AMWell yeah, the point of quantitative easing is to raise that asset's price. Not sure why they expected anything otherwise.Because Keynesians think monetary policy is ineffective at the ZLB.I have no clue what that meansBasically, as soon as interest rates hit zero, there's nothing the Fed can do.
Quote from: Meta Cognition on November 17, 2014, 12:30:15 PMQuote from: DAS B00T x2 on November 17, 2014, 12:27:12 PMQuote from: Meta Cognition on November 17, 2014, 10:57:21 AMQuote from: E̲n̲ga̲ge̲d̲T̲u̲r̲k̲e̲y on November 17, 2014, 10:51:00 AMWell yeah, the point of quantitative easing is to raise that asset's price. Not sure why they expected anything otherwise.Because Keynesians think monetary policy is ineffective at the ZLB.I have no clue what that meansBasically, as soon as interest rates hit zero, there's nothing the Fed can do.Can't they artificially hike up rates though?
Quote from: DAS B00T x2 on November 17, 2014, 12:31:48 PMQuote from: Meta Cognition on November 17, 2014, 12:30:15 PMQuote from: DAS B00T x2 on November 17, 2014, 12:27:12 PMQuote from: Meta Cognition on November 17, 2014, 10:57:21 AMQuote from: E̲n̲ga̲ge̲d̲T̲u̲r̲k̲e̲y on November 17, 2014, 10:51:00 AMWell yeah, the point of quantitative easing is to raise that asset's price. Not sure why they expected anything otherwise.Because Keynesians think monetary policy is ineffective at the ZLB.I have no clue what that meansBasically, as soon as interest rates hit zero, there's nothing the Fed can do.Can't they artificially hike up rates though?Except you don't want that during a recovery. Rates are low in order to stimulate borrowing.
Quote from: Meta Cognition on November 17, 2014, 12:33:06 PMQuote from: DAS B00T x2 on November 17, 2014, 12:31:48 PMQuote from: Meta Cognition on November 17, 2014, 12:30:15 PMQuote from: DAS B00T x2 on November 17, 2014, 12:27:12 PMQuote from: Meta Cognition on November 17, 2014, 10:57:21 AMQuote from: E̲n̲ga̲ge̲d̲T̲u̲r̲k̲e̲y on November 17, 2014, 10:51:00 AMWell yeah, the point of quantitative easing is to raise that asset's price. Not sure why they expected anything otherwise.Because Keynesians think monetary policy is ineffective at the ZLB.I have no clue what that meansBasically, as soon as interest rates hit zero, there's nothing the Fed can do.Can't they artificially hike up rates though?Except you don't want that during a recovery. Rates are low in order to stimulate borrowing.So why are rates hitting zero bad?
Quote from: DAS B00T x2 on November 17, 2014, 12:34:31 PMQuote from: Meta Cognition on November 17, 2014, 12:33:06 PMQuote from: DAS B00T x2 on November 17, 2014, 12:31:48 PMQuote from: Meta Cognition on November 17, 2014, 12:30:15 PMQuote from: DAS B00T x2 on November 17, 2014, 12:27:12 PMQuote from: Meta Cognition on November 17, 2014, 10:57:21 AMQuote from: E̲n̲ga̲ge̲d̲T̲u̲r̲k̲e̲y on November 17, 2014, 10:51:00 AMWell yeah, the point of quantitative easing is to raise that asset's price. Not sure why they expected anything otherwise.Because Keynesians think monetary policy is ineffective at the ZLB.I have no clue what that meansBasically, as soon as interest rates hit zero, there's nothing the Fed can do.Can't they artificially hike up rates though?Except you don't want that during a recovery. Rates are low in order to stimulate borrowing.So why are rates hitting zero bad?It's supposed to be bad because it stops monetary policy being effective. I'm arguing that's wrong.
Quote from: Meta Cognition on November 17, 2014, 12:37:51 PMQuote from: DAS B00T x2 on November 17, 2014, 12:34:31 PMQuote from: Meta Cognition on November 17, 2014, 12:33:06 PMQuote from: DAS B00T x2 on November 17, 2014, 12:31:48 PMQuote from: Meta Cognition on November 17, 2014, 12:30:15 PMQuote from: DAS B00T x2 on November 17, 2014, 12:27:12 PMQuote from: Meta Cognition on November 17, 2014, 10:57:21 AMQuote from: E̲n̲ga̲ge̲d̲T̲u̲r̲k̲e̲y on November 17, 2014, 10:51:00 AMWell yeah, the point of quantitative easing is to raise that asset's price. Not sure why they expected anything otherwise.Because Keynesians think monetary policy is ineffective at the ZLB.I have no clue what that meansBasically, as soon as interest rates hit zero, there's nothing the Fed can do.Can't they artificially hike up rates though?Except you don't want that during a recovery. Rates are low in order to stimulate borrowing.So why are rates hitting zero bad?It's supposed to be bad because it stops monetary policy being effective. I'm arguing that's wrong.Keynesian economics makes very little sense.
FTFY
Quote from: E̲n̲ga̲ge̲d̲T̲u̲r̲k̲e̲y on November 17, 2014, 03:08:58 PMFTFYStill better than Libertarian economics.
Another strike against Keynesianism
