Debt Monetization News Today

The crisis facing the yen stems from a confluence of factors that have pushed the Bank of Japan into an economic policy corner. With a debt-to-GDP ratio of over 260%, among the highest in the world, Japan has been effectively locked into keeping interest rates at ultra-low levels, near zero, for years.

The central bank is the engine that powers the largest government in history. And things won’t change until people are “generally and radically instructed” as to the cause and consequences.

After 20 years, no amount of tax hikes or spending cuts could prevent default "whether explicitly or implicitly," according to Penn Wharton.

Schiff draws attention to the Federal Reserves monetary policies as a key driver of the potential crisis. He argues that the central banks continuous injection of liquidity into the financial system, combined with historically low interest rates, is leading to an erosion of the US dollars value.

Schiff, who predicted the 2008 crisis, has called for structural reforms that will encourage investment and job-creation and reducing the reliance on debt to fund government spending

As explained in that study of past cases, in all cases where there have been big debt crises and the debt is denominated in currencies that central banks can print

All of the major central banks are facing a tight dilemma with inflation, but the European Central Bank has the hardest job at the moment. Click here to know more.

Recent economic reports are running contrary to the expectations of those who subscribe to Modern Monetary Theory and other types of “new” economic thinking.