A little over a year ago I wrote in regards to Japan as an example as to what Keynesian US policy will bring about:
All these low rates will do is allow the debt to get even more bloated. And interest rates won’t remain low forever, as you can see in Greece and similar situations. Did people like the above author see any of those sovereign debt crises coming?
What about Japan? Their debt is the most crushing of all industrialized nations, and I’m predicting that their time of low rates will be drawing to an end any day now, with their debt and pension crisis having entered its final stage. Then what?
Now we hear that the Bank of Japan chief is saying this:
“I do not expect a sudden spike in long-term bond yields. In the long-run, if the economy recovers and inflation heads towards two percent, we might see nominal interest rates rise but that’s natural.”
As it is with statements politicians make, usually the exact opposite is true.
Expect a spike in Japanese bond yields and a further collapse in their currency valuation globally, sending the Japanese economy into another long overdue financial crisis.
Furthermore expect more and more of the same 30+ year long policy from the Japanese government and central bank: Money creation, debt creation, all to no avail and leaving no other option but a chaotic and painful endgame.
So long as people ridicule libertarians for their “strange” ideas of sound money and fiscal responsibility, this is what they’ll get.