Japan’s Carry Trade
More Central Bank Insanity
Written by Geoffrey Pike
Posted May 13, 2016
As Japan and other countries experiment with negative interest rates, the central bankers of the world may get more than they bargained for. Japan is the perfect experiment right now for Americans to watch. It should provide an example of what not to do.
Japan should be the dream of people like Paul Krugman, who think the answer to every problem is to create more money and run bigger deficits. Japan has plenty of that going on.
Japan’s debt-to-GDP far exceeds 200%, which makes Greece look like a fiscally responsible paradise in comparison. Japan has had its digital money-printing machine working overtime, while the central planners continue to push interest rates down.