The Bank of Japan overnight announced another large increase in its “quantitative easing” program in an implicit acknowledgement that even the previous, unprecedentedly large, program was failing to achieve its goal of 2% inflation. The expansion included purchases of ETFs and REIT shares. BoJ Kuroda asserted that “We are in a critical moment in the effort to break free from the deflationary mindset.”
Or in other words, the BoJ is desperate. Stock markets around the world are surging, happy that as Yellen has backed away from QE (temporarily, anyway), Kuroda has stepped in to pump more liquidity into the global financial system. As if it needed it. Of course, this is the Einsteinian definition of insanity, doing the same thing in the hope of a different result. Doesn’t matter to an economist, obviously.
This is the end game being played out, with of course the end result being the collapse of the Japanese economy. Europe is next, with the US following behind. The central bankers all share the same dogma and will not acknowledge its uselessness. So be it.