Snoopy-Typing-Away-1-CVV14J0D95-1024x768

Japan Economy Up Sluggish 2.6 Percent For Quarter
AP – Sun Aug 11, 7:15PM CDT

TOKYO (AP) β€” Japan’s economy grew at a slower-than-expected rate of 2.6 percent last quarter, suggesting demand has been slow to pick up despite strong public spending and ultra-lax monetary policies. (full story)

Japan, which has gone all-in, full-tilt, inflation, is finding that even with all that money printing that GDP growth is tepid.

The reason for this lies in the economic axiom that is Wicksell’s the “natural rate of interest”. Where goods that are not demanded, can be manufactured or produced, due to cheap capital, viz, manipulated interest rates, then common sense tells you that an increased supply will not sell. Hence the “surprise” is really no surprise at all.

Advertisements