The Proof Is In From Japan – – QE Is An Absolute Failure

Nominal disposable income in Japan fell 4.4% year-over-year in May 2016. In what can only be a sign of the times being far too familiar in Japanese, realdisposable income was thus slightly better at ‘only’ -3.9%. For all the hundreds of trillions in new Japanese bank reserves provided by so many QE’s I have lost count, ‘real’ in Japan means better than nominal since the CPI is negative yet again. For the month of May, the overall CPI was -0.38% less than May 2015; excluding imputed rent, the CPI was -0.48% below the same month a year earlier.
On the economic side, household spending fell in the latest update. Like DPI, nominal spending declined year-over-year by 1.6% while real household spending contracted by ‘only’ 1.1%. In the 28 months since January 2014, real household spending has astoundingly fallen in 24 of them. Since the start of QQE in April 2013, spending in real terms is down more than 6%, while real current income is 5% lower. At this point, the fact that QQE didn’t work is a blessing since Japanese households can really bear no more of the monetary genius-ness.

This post was published at David Stockmans Contra Corner by Jeffrey P. Snider ‘ July 7, 2016.