We kind of feel like we’re picking on the Bank of Japan at this point. And we are.
But let’s face it, they’re an easy target. Never in the history of monetary policy has such a grand policy failure been witnessed. We outlined this on Friday in “Just How Crazy Is The Bank of Japan.”
Frankly – and unfortunately – it just keeps getting better (or “worse”, depending on how you want to frame it). Have a look at the following projections for BoJ asset purchases and inflation courtesy of Deutsche Bank:
(Charts: Deutsche Bank)
Just look at those issuance and purchase numbers in the right pane! They’re buying JPY115 trillion in JGBs with JGB gross issuance projected at JPY123 trillion.
Now if that isn’t monetizing the government’s balance sheet, then we don’t know what is.