Bank of Japan launches QQE
The Bank of Japan launched Quantitative and Qualitative Easing (QQE) on April 4, 2013, committing to double the monetary base within two years and explicitly targeting 2 percent inflation. The program was the most aggressive central-bank stimulus in history by any metric — the BOJ eventually owned over 100 percent of Japanese GDP in government bonds and roughly 7 percent of the Japanese stock market through ETF purchases. Inflation never reached the 2 percent target; Japan spent the subsequent decade battling deflation despite one of the largest fiscal-monetary experiments ever attempted. The episode challenged the assumption that monetary expansion reliably produces consumer-price inflation.
The BOJ's holdings of Japanese government bonds (JGBs) reached roughly 53 percent of outstanding JGBs by 2023 — a level of central-bank capture of the bond market unprecedented in the developed world. The corresponding collapse in JGB market liquidity has been a recurring concern for Japanese financial stability.
07 · Stealth Printing
In November 2008, the Federal Reserve launched Quantitative Easing — the purchase of long-dated Treasury and mortgage securities with newly-created reserves. It was, mechanically, money-printing. Politically, it was called 'unconventional monetary policy.' The innovation was not the printing; central banks had been doing that for three centuries. The innovation was that the printing became invisible to most people — the new money entered the financial system through bond purchases rather than fiscal deficits, and its effects showed up in asset prices rather than in consumer goods. Alongside QE, central banks have developed a toolkit of yield-curve control, reverse repo operations, currency swap lines, and measurement adjustments to the inflation indices themselves. The era's thesis: debasement still happens; it's just harder to see.
Read the full era →- Nov 25, 2008Federal Reserve launches QE1
- Sep 21, 2011Operation Twist — maturity manipulation
- Jan 29, 2016BOJ introduces Yield Curve Control
- Mar 23, 2020Fed announces 'unlimited' QE for COVID
- 1996 — 2023CPI hedonic adjustments and substitution
- 2018 — presentTurkish lira collapse — rate cuts into inflation
- Sep 23 — Oct 14, 2022UK gilt market crisis
- 2023 — 2025Central Bank Digital Currency pilots