1. Amount to be Purchased Approximately 8-12 trillion yen per month in principle….<\/em>”<\/p>\nYes you read that correct.<\/p>\n
What this means is that The Bank of Japan will now from November buy 8-12 Trillion Yen of (Japanese Government Bonds) JGB each month, but the government only actually issues (sells) about 5 Trillion Yen of Bonds a month.\u00a0 No one will ever say but what is happening is pure debt monetisation.<\/p>\n
[1 Trillion = 1,000,000,000,000]<\/p>\n
so 8 Trillion YEN = 8,000,000,000,000 YEN = \u00a344,567,200,341 GBP<\/strong><\/p>\nThat is forty-four billion, five hundred sixty-seven million, two hundred thousand, three hundred forty-one<\/strong><\/em>.<\/p>\n= \u00a344 Billion<\/strong> = \u00a344,000 Million<\/strong>.<\/p>\nSo each month the Bank of Japan will spend \u00a344 Billion = 8 Trillion YEN each month on buying Japanese Government Bonds (JGB’s)<\/p>\n
To put things into context the Gross Domestic Product (GDP) is \u00a33.06 Trillion.<\/p>\n
So if the Bank of Japan executes this plan for say 6 months, this calculates:-<\/p>\n
\u00a344 Billion x 6 months = \u00a3264 Billion.<\/p>\n
In 6 months of Bank of Japan purchases that equate to \u00a3264 Billion is equivalent to 8% of Annual GDP<\/strong><\/em>.<\/p>\nthese numbers are huge. What will the Bank of Japan do with all these bonds that is owns ?<\/p>\n
It will never be able release them on the open bond market, as it will flood the market and the prices of existing bonds will slump. The end game of this global policy of flooding the market with cheap capital is impossible to predict, but what are the unintended consequences ?<\/p>\n","protected":false},"excerpt":{"rendered":"
The Bank of Japan last week announced another round of Quantative Easing. [https:\/\/www.boj.or.jp\/en\/announcements\/release_2014\/rel141031e.pdf] The announcement on the 31st October is incredible. “…….effective from November 4, 2014. In principle, the Bank will announce the \u201cOutline of Outright Purchases of Japanese Government Bonds\u201d on the last business day of every month. The next announcement will be on […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-957","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/957","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=957"}],"version-history":[{"count":1,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/957\/revisions"}],"predecessor-version":[{"id":958,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/957\/revisions\/958"}],"wp:attachment":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=957"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=957"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=957"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}