Japan’s central bank is inflating on a massive scale. The policy is not working. The Japanese economy is in a second quarter of contraction.
The Japanese stock market boomed in response to the flow of new money. It is now falling.
The government hiked the national sales tax from 5% to 8%. It had planned to hike it again. This second hike may be delayed.
The government is proving for all to see that central bank inflation and high taxes are not going to get the economy into positive shape.
Think of what will happen if the central bank stops inflating. What is now a recession will become a disaster.
Abenomics has had its cheerleaders in the West. But when the team is losing, the cheerleaders’ enthusiasm will fade. They will have to redouble their efforts to explain why central bank inflation is not working.