Japan's problem is Keynes "optical illusion" problem. Banks don't lend deposits. Deposits are the result of lending/investing. It is an extraordinary delusion. Ergo, all bank-held savings are frozen. That destroys the velocity of circulation.
Japan’s “lost decade” is due to the impoundment and ensconcing of monetary savings in their banks. The BOJ has unlimited transaction deposit insurance, the Japanese save more, and keep more of their savings in their banks.
“Japanese households have 52% of their money in currency &am... (read more)
Japan's problem is Keynes "optical illusion" problem. Banks don't lend deposits. Deposits are the result of lending/investing. It is an extraordinary delusion. Ergo, all bank-held savings are frozen. That destroys the velocity of circulation.
Japan’s “lost decade” is due to the impoundment and ensconcing of monetary savings in their banks. The BOJ has unlimited transaction deposit insurance, the Japanese save more, and keep more of their savings in their banks.
“Japanese households have 52% of their money in currency &am... (read more)