Bank-of-Japan

This year the Bank of Japan has decided to invest directly into Japanese listed companies.

They are in the top 10 shareholdings for the majority of listed stocks on the Nikkei index. This is supposedly going to help the economy because they will provide a floor in prices.

Unfortunately for the BoJ, this act will attract a lot of criticism in the future and it does seem like an act of desperation.

The money used to buy shares has to come from taxpayers, except that Japan has the largest government debt to GDP in the known world.

There is now talk that China needs to provide more stimulus to the economy as it is inexorably slowing to a point of contraction.

There is a belief that the Chinese government will provide similar packages as their Japanese counterparts.

The level of debt in the world is enormous, with over $14 trillion of government bonds on a negative yield.

Eventually the will to spend taxpayers money will cease and the effects will be devastating for some economies.

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