Once again you are arguing by repetition. Quantitative easing is simply a term pasted onto the polity Friedman was describing, that is increasing the money supply until there is measurable inflation in the economy.
Here Friedman is again,
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This is what the BoJ is doing now. Not that I needed it but it's also worth noting it fits exactly the wiki link you submitted as evidence
NO - it DOES NOT fit my link. I will continue to point out your fundamental misunderstanding as often as you repeat it. Here is the quote from the wiki link that you failed to consider ....
A central bank implements quantitative easing by buying financial assets from commercial banks and other private institutions, thus increasing the monetary base.
This is from your Friedman quote.
The answer is straightforward: The Bank of Japan can buy government bonds on the open market, paying for them with either currency or deposits at the Bank of Japan,
If you can't distinguish
buying government issue bonds on the open market (conventional monetary policy) vs
buying assets of commercial banks and private institutions (unconventional QE), then you are incapable of participating in a serious discussion. These are two distinct things.
Again argument by repetition.
Since you continue to recite the same errors, how else can I respond ?
STOP complaining that I repeat the same rebuttal and start addressing the actual issue. QE is NOT conventional monetary policy, and Freidman never suggested QE. Specifically Friedman was not suggesting buying assets of private and commercial banks.
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Regardless of whether the Yen goes up or down Japanese will:
1) sell bonds on fear of inflation, which is a by product of economic growth
2) buy stocks on the prospect of economic growth.
1) Nonsense. In the past 2 decades J has had two brief blips to 2% inflation and has averaged well under 0.5% inflation in that period. The only reason Japanese fear inflation now is a direct result of the planned currency devaluation. You are trying to argue that econ growth causes inflation which is patently false in theory and demonstrably wrong by evidence.
2) So how could Abenomics create
real economic growth (not nominal growth as measured in devalued yen) ? The currency manipulation and bond shuffling is a book-keeping matter. It doesn't make exports any cheaper or better in real term unless the local population takes a std of living cut or magically become more productive. It does rearrange assets (stealing from lenders; giving to borrowers incl gov) but that doesn't make Toyotas any more competitive.
Abenomics includes some growth and productivity improving measures, increasing female labor force participation, streamlining and eliminating regulation. These are the only parts of Abenomics that MIGHT lead to real growth, but this is unclear.
Since this is exactly what's happening we can conclude Japanese investors are predicting economic growth.
Major logical fallacy here.
"IF X then Y", does not make "Y is true therefore X" a true statement.
You argument is predicated on the false premises the econ growth implies inflation, and that devaluing the currency while the government absorbs excess debt creates real growth. Neither is correct.
Perhaps for a few multinationals this is true, but the broader market the value of the Yen isn't a big long term factor because it's dominated by domestic investment.
Puzzling comment since the price-inflation impact is in domestically denominated holding, not foreign denominated ones.
Also you seem to be making a fundamental mistake in treating stocks to something like gold that has little intrinsic value and gains it's price though trade. Stocks on the other hand can be valued based on their earnings. If those earnings are expected to increase the price goes up. This is how investors like Warren Buffet make their money.
No one rational suggests values is based on trade; value is entirely subjective - even for stocks. So stocks values are not based on earnings as you suggest, but often partially based on
expectations of earnings. This is a major distinction.
No, You've failed to describe how Abenomics can increase expectations of earnings except in the short run for the short-sighted who confuse price and value; or ppl who are 'jazzed' by the thought that any change is an improvement. How does Abenomics make Sony and Toyota products more competitive exports ? It is not by the purchase of bonds and not by the devaluation of currency. It may be by reducing the J standard of living, but that's unlikely to be an economic gain for the nation.
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