In less than two weeks the Bank of Japan will consider extending its easy monetary policy for the second meeting in a row—something it hasn’t done since 2003.
Under pressure from Japan’s newly elected Prime Minister Shinzo Abe, the BOJ is expected to expand its purchases of government bonds and double its inflation target to 2%. This move is expected to devalue the yen in an effort to boost exports and the broader Japanese economy.
Japan’s monetary policies will hurt Japan’s economy and the U.S. economy, says Peter Schiff, CEO of Euro Pacific Precious Metals.
“Japan doesn’t need more inflation,” he says. “They actually need a stronger yen, higher interest rates. They need to allow their economy to restructure…to shrink government. Instead they’re simply going to do more of what’s been failing for the past two decades.”
He tells The Daily Ticker that if inflation rises in Japan, Japanese citizens will likely unload low-yielding Japanese bonds in favor of higher yielding precious metals and other assets. That could force the BOJ to buy more Japanese government debt instead of U.S. government debt, says Schiff.
Read the rest of the story: Japan’s Monetary Policies Are Disastrous for U.S. Economy.