by Colin Lloyd
The American Institute for Economic Research
The original experiment in quantitative easing (QE) began in Japan on the 20th of March 2001, although the Bank of Japan (BoJ) had already been wrestling with the wisdom of embracing QE for several years. By the time of the great financial crisis in 2008/09, the Japanese experiment had attracted several additional adherents. The chart below shows how the balance sheets of the major central banks have grown since then: –
[…] The BoJ remains in the vanguard of policy initiatives, moving seamlessly on from radical QE to ultra-radical QQE – quantitative and qualitative easing. Armed with this new weapon they have embarked on the provision of, not just temporary liquidity by the purchase of government and corporate bonds, but also, permanent capital, via the acquisition of exchange traded funds of Japanese common stocks. By the spring of this year the BoJ was acknowledged to be the largest holder of Japanese corporate shares.