Government policy of setting inflationary goal will be catastrophic:
Akahata editorial, August 28, 2001

Takenaka Heizo, state minister for economic and fiscal policy, is urging
the Bank of Japan to take an easy money policy so that prices will rise to
set targets. The Bank of Japan governor is criticizing the idea of setting
so-called inflation targets as an absurd monetary policy.

In fact, there is no leeway left for the BOJ easy money policy because
it has reached its limits.

Under pressure from the government, the ruling coalition parties, and
the U.S., the BOJ on August 14 started to buy 200 billion yen more national
bonds every month from financial institutions. But its "effect" on the
stock market lasted only a day, and the market, to the contrary, bogged
down.

Richard Coo, a market analyst at the Nomura Research Institute on August
20 wrote that investors have come to the perception that as there is no
demand for investment funds, the mechanism in which the central bank's easy
money policy affects the economy has almost disappeared. Another economist
said loosening the already loosened rein can't make the exhausted horse run.

If the government imposes on the economy the absurd logic that only the
easy money policy can save the economy, it will be catastrophic.

Fuji Research Institute in its June report warned that the BOJ's
unlimited buying operations of long-term national bonds will cause bond
prices to crash, and the public trust in the BOJ notes will collapse. The
result will be a vicious circle of the low yen coupled with inflation, and
the high long-term interest rates, the report added.

This means that the inflationary spiral will become uncontrollable, and
a major plundering of the have-nots will take place, throwing the economy
into chaos.

The Koizumi Cabinet's "robust reform" policy is the source of the
inflationary policy. The call for inflation is another indication of the
failure of the Koizumi "reform." (end)