That is, trillions in buying power (yen in this case) are sitting in corporate vaults, gathering dust, while the real economy languishes.
The U.S. money strike has been going on for years. Japan's has been going on for decades. Prime Minister Shinzo Abe and the Bank of Japan have been trying to break the strike by reducing the value of the yen through both fiscal and monetary policy
Abe's hand-picked Bank of Japan governor, Haruhiko Kuroda, has been creating the equivalent of $70 billion per month, but the response has been underwhelming. Growth slowed between the second quarter and third quarter from 0.9% to 0.5%.
Meanwhile, Japan's total debt dwarfs that of the U.S., at twice the country's gross domestic product, and so tax breaks intended as stimulus have to be matched with unpopular hikes in sales taxes.
At the time of publication, the author had no investments in companies mentioned in this article. Follow @DanaBlankenhorn This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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