http://www.nytimes.com/2012/02/15/business/global/battling-falling-prices-japan-sets-an-inflation-target.html?_r=1


"At its policy meeting Tuesday, the Bank of Japan’s board showed a more explicit commitment to ending deflation, voting to set consumer inflation at an annual rate of 1 percent as its price goal, at least for the time being. "


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Seems a very different strategy for a central bank....actively setting a formal inflation target and announcing that the economy needs more inflation to pull it out of the economic slowdown.


Different than the Feds 'we must avoid deflation but we will set ourselves on fire before we call for higher inflation' and nearly the opposite of the Euro Central Banks 'we will burn the whole continent down to avoid inflation'.


Seems like a subtle shift but it could have a large impact. This should provide a large economic jolt for Japan....and it may influence the actions of the Fed and ECB if that actually happens....but we'll see.


Nice to see a Central Bank somewhere has finally decided to stop sitting on its hands and do something about the global economic slowdown.

Our central bank also has an inflation target....

 

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Ya, kind of not seeing the big news here. Pretty sure all the central banks do.

 

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Ssssssh dammit Rosie I was gonna let him go on for pages and pages with this!

 

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I read a rant on Forbes.com about how the fed's inflationary policy was destroying 50% of all wealth over the next 10 years, in fact. I was kinda disappointed because I had assumed that Forbes hired intelligent writers.

 

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Forbes is written by stupid rich people for stupid rich people. I have never read anything from Forbes that wasn't mind-numbingly stupid.


It is really just a platform for advertisers looking for a bunch of gullible rich people to rip off. So writing stupid stuff helps them with their business model.

So the Japanese central bank is saying "We need to make the money you have worth less so that you ("we" in reality) can be more prosperous!

 

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Mebbe I wasnt clear enough...


Raising inflation as an economic stimulus was the change


it runs very counter to other central banks ideology and in the complete opposite direction of the textbook outpost economics.


Central banks usually dont say 'we need to raise our inflation target to help the economy'. Now one of them has said that.


Bad central banking has negatively impacted hundreds of millions of people the last few years. Better central banking would be a good thing. This will certainly have a bigger impact on US economic growth and future deficits than 99.9% of the political debates about those subjects.

[edit <---that was meant for AA]


Okay, okay hear me out. You flood, and keep flooding, the economy with trillions of USD. You keep your inflation target very low for an extended period of time, possibly for the forseable future. Simultaneously, housing and unemployment are uncertain. There are headwinds from different regions of the earth that are going to ping the global economy. What is your low inflation rate designed to protect? Where are those trillions of dollars going to [given tight credit] and how do you slap the economy around to get those dollars circulating at a faster rate and in greater numbers? Is low inflation going to do that?

 

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That's not entirely what controlled inflation does.

 

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