Part III: Abenomics and the road to collapse. Abenomics is the label given to Prime Minster Abe`s three pronged plan to revive the Japanese economy. One of his first acts as Prime Minister was to place trusted inflationist at the helm of BoJ. The new Chairman, Mr. Kuroda, did not disappoint with his plan to…

Part II: From quagmire to Abenomics. Unsurprisingly the policy lead to a massive increase in debt levels. In order to feed the unsustainable system, consecutive Japanese governments threw money at it with the perverted consequence of depriving corporations of capital. Government debt grew inexorably while corporations got squeezed. Source: Bank of Japan – Flow of…

Part I: Toward the abyss Japan has been in a stable, but unsustainable, equilibrium for years. Its leaders know it is unsustainable and in their immense wisdom, decided to manage the whole system in order to achieve a sustainable development. However, this will prove fraught with danger since moving an unsustainable system away from its…

We will take the easy way out today and present reason #6 by referring the reader to Professor Reisman`s work, and then direct the reader to an earlier article published on Bawerk.net for reason #7. The reason is simply because we have been swamped with work on an article that will present the unsustainable path…

Something peculiar has been going on in the treasury market during the latest round of quantitative easing (QE). If we study the chart provided below we find that treasury rates increased as soon as a QE-program was enacted, and fell immediately after its termination. Take the TSY 10 year for example; as soon as QE1…