The Bank of Japan took quantitative easing one notch higher yesterday. What hasn’t received much play in the media is Japan’s plans to not only buy more government bonds but also a slew of unconventional private sector assets. Japan plans to acquire a range of assets, including government bonds, real estate investment trusts, exchange-traded funds, commercial paper and corporate bonds. The inclusion of private sector assets takes QE to whole other level. The BOJ’s plans not only opens the QE door to the Fed, but any central bank, as the race to devalue continues.
According to Ben Davis, the CEO of Hinde Capital, the Bank of Japan have just unleashed the potential for 'unlimited' monetization to try and reinvigorate their economy and push the horns of the
'Impossible Trinity' firmly up the backside of the US and China. The market has all but missed that this asset program allows them to circumvent the ceiling of debt that can be issued against bank notes in circulation. The BoJ can exceed existing limits by as much as they like. Read all of Ben's comments
here.
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