Japan’s QE program is growing out of control in a desperate attempt to save the economy! I didn’t quite realize how powerful a balm this latest Quantitative Easing (QE) by Japan is until I read in early November that the Bank of Japan and the government pension fund are working together to spend half of their monthly printed money to buy stocks now! They are not simply buying Japanese government bonds any more….but they are now buying stocks!….to the tune of $40 billion worth of stocks.
And get this…Half of that $40 billion is being invested in FOREIGN STOCKS! Now, I understand one of the reasons for the US stock market’s un-ending rally late in 2014. US Stocks are likely getting some of that Japanese money invested in them.
Don’t you just love it! Japan prints money out of thin air and it buys stocks in Japan and around the world with that same printed money.
One question I have is what will Japan do when the day comes and the stock markets crash? We know stock markets crash…it’s just a matter of when will it happen? Will Japan have to print even more money to bail out their central bank and pension fund?…and will that create a devastating Weimar Republic like crash of the Yen currency when that day comes? No one will say or agree, of course….my thoughts are unthinkable to those in government and on Wall Street….right? I must be a dummy for thinking that.