What will the quantitative easing result in?

I am going for shopping at a shopping mall almost every day. Getting some food stuff, I get ready for supper for two of us on the day. It is a kind of different there today. The prices of quite some items like food are gone up. Bread, oil and so forth. They say the electricity is getting more expensive while the price of the gas remains high. Evidently, it is a result of quantitative easing through lowered exchange rate of our currency against the others.

The most recent report of BOJ etc tells that only two sectors of the industries, the export sector in the industries, especially automobile section, and the civil engineer sector, benefitted from the quantitative easing policy of the present government. The plant investment remains low. The cunsumer tax rate is ready to be raised soon.

The present government says they will get out of the deflation spiral with the quantitative easing. However, the issue is the lack or the decline of the demand in the country. The export sector  takes only 20% of GDP. It won't improve the demand within the country. The civil engineer sector has been invested for the past decades with very small or only transient effect on the economy in the country. The side effect of the lowered currency might hit our lives as the increased prices in addtition.

Some workers in certain sectors are paid more this spring. The government advertises this effect may be generalized in all the sectors in some time. But, knowing how much the enterprises have added as the internal reserve for the past couple of decades, I could hardly ever believe that it comes true in the near future. In addition, the government has the astnomically big amunt of debts. The public services may be reduced in budget.

As one of the citizens, I don't think this quatitative easing won't work out but may elicit "bad" inflation only. As a retiree, I thought I should get ready for the inflation starting now. No way for us to hedge it. But for the hard time in the coming few years, we should get it through by some means.


  1. Shin San,

    It sounds to me like your country is following in the footsteps of the USA! Perhaps we peasants were not meant to understand basic arithmetic. Or is this an equation from the Calculus note book that has no answer? In any case, many people have felt the way you do, especially here in our country!

    Bob Gates

    1. Bob,

      In your country, the government could issue the USD which has been used in the international trading. That's why the economy has not collapsed despite of the huge deficit. In addition, you have a regulation to limit the expenditure.

      In Japan, the national bond might be bought by the market so far as the overall revenue and expenditure remains positive. But it is already declining here. In a few years, I am sure JPY will drop and a hyper inflation will start then.

      So what should we get ready for? Maybe, I should go on part time work. And, maybe, my garden farm shall help us, hopefully!!

      See you soon. I hope your retirement will be so peaceful as it has been there.