If you were, then you would also be aware that the Japanese debt will be rolled over in perpetuity at a rate of the BoJ's choosing.

Any inflationary pressures are going to come from real supply problems/limits, not monetary policy.

Because the BoJ is going to keep on funding the government's debt forever with freshly printed yen, right? Which is just a complicated way of saying that the government is going to print money to pay for it's spending program.

You don't see a problem with that?

Merely printing money does not cause inflation, if that's what you're aiming at. As long as Japan's present economic conditions continue, there will be no inflation. This has been verified in the real world multiple times in multiple countries.

Elsewhere you mention concerns about the rate of increase in Japan's monetary base. The US has quadrupled its monetary base since 2008. [1] The US has experienced everything from very low deflation to very low inflation since 2008. The trendline on the Consumer Price Index hasn't changed _at all_. [2] The current US inflation rate is 2%.

And inflation is, at least, a relatively easy problem to deal with economically, barring some political/military/resource crisis. It is certainly not an evil in itself.

[1] http://research.stlouisfed.org/fred2/series/BASE/ [2] http://research.stlouisfed.org/fred2/graph/?id=CPIAUCSL

If you're right about that, Abenomics is doomed to fail!

And it's an interesting coincidence that inflation has finally started to happen again in Japan.

Japan has been engaged in QE for a long time. Abenomics involves more than QE. Recent experience (and older research, c.f. Krugman) shows monetary policy simply isn't going to make any real difference in situations like this. It's better than _nothing_, maybe, and might hold you steady, but that's about it.

That said I don't think Abenomics is going to be a resounding success. There's just not that much changing in terms of fiscal policy, which is the only thing that's going to have real short/medium-term impact. There's a little, and it's an improvement, but not a lot. So I'd expect to see small gains.

>Because the BoJ is going to keep on funding the government's debt forever with freshly printed yen, right?

It's all printing when it comes to a country spending its own floating-rate non-convertible currency. Spending creates, taxing destroys.

> You don't see a problem with that?

If and when inflation comes, there will be a problem. In 20 years, it has yet to manifest; which suggests there's much more room for spending.

We're assuming here that the Japanese government has the capability of lowering as well as raising spending if they feel inflation is too high. They can also raise interest rates and end QE.

So yes, explain why that would be a problem, exactly. In terms of real effects on the economy that the Japanese would experience.

Thank you for not SHOUTING this time.