Courtesy of Mish.
Japan’s prime minister Shinzo Abe is the most incompetent politician in the world as measured by his words vs. what is happening.
Abe has repeatedly promised promised to get inflation above 2%. That goal is amazingly easy. I provided examples twice. Yet here we are. Abenomics is a complete failure.
For the 20th time (at least) in 10 years, Japan Suffers Setback in War on Deflation.
Japan remains in the grip of deflation, with consumer prices falling for a fifth consecutive month and price momentum slowing further in August.
Headline consumer prices were down 0.5 per cent on a year earlier, in line with analyst expectations, reflecting the impact of weak oil prices and a strong yen.
But more alarming for the Bank of Japan was the weakening of a crucial measure of inflation that strips out volatile food and energy prices to an annual rise of just 0.2 per cent.
That suggests lower prices for imported commodities are spreading to domestically produced goods and services, highlighting how hard it will be for the BoJ to reach its 2 per cent inflation target in the near future.
Commitment to be Irresponsible
On September 21, I commented on Japan’s “Commitment to be Irresponsible”.
Instead of targeting 2% inflation, the bank of Japan announced it had a goal of exceeding 2% inflation.
I nearly fell off my chair laughing for two reasons.
- The asininity of demanding inflation in a deflationary world.
- Failure to achieve that goal despite the ease in achieving the goal.
These economic illiterates actually believe that announcing inflation targets will generate inflation. If that was the case, the announcement of a 2% inflation target would have worked a decade or more ago.
Amazingly, mainstream media praises Abe and the Bank of Japan for their firm commitment to insanity.
