One More Major Economy Jumping Onto QE Infinity Express

Bank of Japan finally joining its peers with the announcement today.

http://www.boj.or.jp/en/announcements/release_2013/k130122a.pdf

All the major currencies are now in non-stop printing mode. But to make printing driven inflation works, it is important that there is an exit, or parking spot, within the dynamic system for this to work. A big problem has now surfaced as the last exit, Japan, has chosen to strike back.

In layman’s term, a messed up economy with lots of debt (i.e. bonds) issued can export its problem by crashing its own currency so that the cost to service those existing debt becomes insignificant. It works fine until the other economies start feeling the damage done to their financial system. These economies would have no choice but to print money to get out of the same problem. When every major players are printing, however, the scheme will no longer work.

Today is the day that the printing game has come full circle as Japan elected to print its way out like the others. As all these central banks are printing at the same time, none of their pony tricks will work now. Blow up of their debts is now in final count down.

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