At its latest policy meeting earlier this month, the Bank of Japan did what was widely expected and held monetary policy unchanged. Rates will remain at -0.1 percent, while the pace of bond purchases will also stay constant-at least for now.
The Japanese central bank did, however, push back its time frame for inflation reaching its two percent target. The bank appears ready to stay on its current course, unless it becomes necessary to hit the gas again.
The statement by the BoJ with its decision discussed the economy expanding at a moderate pace, although weakness would be seen in some areas. The BoJ cut its forecast for inflation for the next fiscal year, from 1.7 percent to 1.5 percent. Japan has continued to see declining prices, with core consumer prices falling for seven straight months.
It’s no secret that Japan has adopted a negative interest rate policy in order to try to boost its economy. The question is: Has this policy, along with all of the quantitative easing, produced any real results? Will Japan have to probe deeper into negative rate territory before seeing more of an effect?
The answer to these and similar questions remains to be seen. What seems pretty clear at this point, however, is that central banks can only do so much to try to stimulate growth.
Considering how long Japan has been battling deflation and a stagnant economy, you have to wonder why its economy simply cannot get back on track.
Looking at the “recovery” in the U.S., you may be asking yourself why the economy is not stronger than it is following years of zero interest rates and tons of easing.
As negative interest rate policy seems to be taking hold and could spread further, you have to wonder if other economies might end up on a similar path to that of Japan.
In such a scenario, the prospects for higher stock markets seem unlikely, as at some point companies will not be able to grow profits enough to justify higher valuations.
Where will you put your money to work?
Now may be the ideal time to consider an allocation in hard, tangible assets. The kind of assets that you can touch and feel. The kind of assets that may potentially increase in value during periods of economic turbulence, and may also potentially help preserve your wealth and purchasing power.
The kind of assets that cannot default or go bankrupt, and carry zero counterparty risk.
Assets like physical gold and silver…
Fortunately, acquiring these hard assets has never been easier than it is today-in fact-all you need to do is pick up the phone.
Speak with an Advantage Gold account executive today about the potential benefits of physical gold and silver ownership. Our precious metals professionals are here to help you, and can even show you how to begin building a physical precious metals portfolio using your IRA account.
Don’t wait for negative rates to spread further, or for the next stock market collapse. Explore your options today. Call us at 1-800-341-8584 to learn more.Tags: advantage gold, bank of japan, gold, inflation, japan, negative interest rates, quantitative easing