Printing Money Is Not The Solution

Posted on Posted in Daily Blog Post

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Do you think you can print money to pay off your debt and improve your personal economy? If your answer is ‘no’, then obviously the politicians (body of government) should not be allowed to print money too.

The Japanese stock of 77% rally that is fuelled by a quantitative easing ( trillion dollar of printing)  will end in crisis. It is not a matter of if but when. Early this year, Japan new PM Shinzo Abe aims to spur inflation to 2% target by promising to print trillion of Yen. It seems this is the ultimate solution to cure its 22 years of ailing economy. However such move causes the Yen to plunge but the artificially low rates and a weak currency sooner or later will cause consumer price increases which will have dampening effect on savers.

Peter Schiff of Euro Pacific capital said McDonald's just levied a stiff price increase for a hamburger in Japan, so inflation may already be festering there.  He predicted that when inflation does take firm root in Japan, it would force interest rates to rise, including those on government bonds. And when that happens, the Japanese government "can't afford to service the debt.”

Further comments from Moneynews.com : The Globe and Mail pondered whether the Japanese stock rally will endure for long. The newspaper said similar QE-fueled gains in the U.S. stock market have not diminished concerns about what will happen when the stimulus ends, with skeptics convinced the Standard & Poor's 500 could plummet because it has become so overextended. Even while the Fed's ultra-loose monetary stance has been in effect much longer than Japan's, the Globe and Mail noted U.S. gross domestic product expanded only 2.5 percent annual rate in the first quarter. The Fed acknowledged in a recent policy statement that unemployment remains elevated and inflation remain below its stated objectives.

Folks, all these policies are only extending the life of the current government. Whoever is going to take over from Obama in 2016 will need to clean up all the shit left over by him.

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