Yes. Maybe. That would be the aforementioned Mr. Gono.
Japan is exhibit A for the central planners' argument that the world lacks 'demand.' Martin Wolf made the case for it in Wednesday's Financial Times. "The curse of weak global demand," is the headline.
Why is weak demand a curse? How much demand should there be? Why is the demand given us by willing consumers and businessmen 'too much' or 'too little?' And how could there be ever more demand than there actually is?
Never mind. When there is not enough of it to suit their tastes, the central planners think they know how to get more. Wolf: "...unconventional policy choices, probably more unconventional than those they have tried so far."
We doubt that Mr. Krugman urged Mr. Abe to try more unconventional policies. More likely, he argued for more of the same old hopeless elixirs that have left the patient as stiff as a board. But the gist of all these policies - conventional and unconventional - is that they try to create demand where none really exists. That is, they make unearned money and undeserved credit available to people who are unable to pay it back.
And what next? We don't know, but we hear that Abe is looking for Gideon Gono's email address. Long time Diary sufferers will remember Gono as the man who turned the Zimbabwe story into a required reading for the aficionado of hyperinflationary catastrophes. What he doesn't know about creating phony demand is probably not worth knowing. For years, we carried in our wallet a reminder of his handiwork - a 10 trillion Zimbabwe dollar bill! What could you buy with it? Nothing! It was worthless.
Gono's advice would probably be cheaper than Krugman's. Besides, the former central banker of Zimbabwe would provide more entertainment. According to a report in the Zimbabwe yellow press, he kept three wives at his mansion in Harare, and was sleeping with the president's wife too. If it's animal spirits that the Japanese economy lacks, perhaps a dose of Gono would help.
But after being staggered by the news of Tokyo's latest misadventures with monetary policy, our legs are steadying and a clearer view is coming into focus.
The stated purpose of the new, more aggressive QE policy is the usual claptrap about increasing the growth rate. Supposedly, devaluing the yen would drive consumers to want to get rid of it faster...thus increasing the velocity of money, leading to inflation, sales, profits, hiring...and all the good things of this transitory life.
What has happened so far is that the devalued yen - along with an increase in the sales tax - has raised consumer's cost of living and reduced their real incomes. Not what Mr. Abe was looking for.
But the closer you look at the numbers, the less any of it makes sense.
Tax revenues have been flat for the last 30 years...while spending has gone up nearly 100%. Currently, for every yen the Japanese feds get in tax receipts, they spend two. And 25% of tax receipts has to be used to just to pay the interest on the debt - even at near-zero interest rates.
You see where this is going, don't you? Household incomes are falling. Trade surpluses have turned into large trade deficits. Savings rates are approaching zero. The whole race of Nipponese people is engaged in what could be self-extermination, with the population set to fall from 127 million down to 87 million over the next half century. And the most aggressive, most tenacious stimulus efforts over a 25 year period have been unable to boost real output by a single yen.
Grow its way out of it economic problems? Not a chance.
It has too much debt. It can't pay it. It must inflate it away.
Mr. Gono, are you on the line?
Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.