The Keynesian and Monetarist clowns in Japan are going all out in Japan with pledges to ignore debt caps and implement “bold monetary policy”.
By: Mike Shedlock | Wed, Dec 26, 2012
Please consider Japan signals rise in borrowing.
Japan’s new finance minister has signalled that the government will borrow to boost the struggling economy, as Prime Minister Shinzo Abe unveiled a “crisis beating” cabinet on Wednesday.
At a press conference following his appointment as finance chief, Taro Aso announced he would issue bonds and lift a cap on new debt for the 2012 fiscal year.
“We will not stick to the debt cap of Y44tn ($514bn) [for the year through to March],” Mr Aso said. The debt limitation was introduced by the previous Democratic party administration, which was defeated in a landslide by Mr Abe’s Liberal Democratic party two weeks ago.
Mr Abe on Wednesday unveiled a cabinet of close allies and policy experts to push his agenda of economic recovery, just hours after being formally appointed as the country’s seventh prime minister in six years.
He has vowed to create a “crisis beating government” to tackle the deflation that has dogged Japan for more than a decade and also the strong yen. Mr Abe said he had instructed his cabinet to do their utmost to achieve economic recovery and reconstruction after last year’s devestating earthquake, and to ensure national security.
“I will direct the energies of my entire cabinet towards implementing bold monetary policy, flexible fiscal policy and a growth strategy that encourages private investment, and aim to achieve results with these three pillars,” Mr Abe said.
He has pledged to reflate the economy through fiscal stimulus and monetary easing. He has also called on the Bank of Japan to carry out “unlimited” easing and warned that the central bank risks losing its independence – through legislative changes – if it does not introduce a 2 per cent inflation target.
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