Japan is in trouble. There’s just no nice way to put it.
For years, the Bank of Japan flooded the system with liquidity in hopes of ramping up consumer demand and stimulating growth. As long as inflation remained under control, they could justify continuing down the path and throwing more money at the problem in the hopes that it’ll eventually work.
But it hasn’t. Japan’s economy has routinely swung back and forth between expansion and contraction without any real progress towards steady growth.
Now, however, the BoJ has a real problem on its hands. Inflation is finally showing up and it’s going to force the central bank to choose one of two paths at the fork in the road.
