|Necessity for minus interest rate
Amount of currency is far more than scale of economy, because interest
rate on loans has been over economic growth rate since 1991. As a result,
amount of national bond / local bond and increase of bad debt etc. have
been happened. Economy has not been stable because Japanese people have
burdened excess debt as compared to scale of economy.
Real work to decrease the excess currency is disposal of bad debt. The
increased money has been decreased by abandoning credits by banks as private
company. As the increased currency doesn’t exist essentially, debtee must
abandon it in some way. Therefore, nation should decrease the increased
currency essentially. Introduction of minus interest is root policy to
Economic value we will accept is the amount of economic value which will occur in the future. For example, Economic value we will accept in the coming decade will be only economic value which will occur in the coming decade. It is meaningless for (value of) further currency to exist. It means that amount of currency must be decreased if scale of economy diminishes.
If currency is not used, value of it is lost. Reversely, the more currency
is used, the more value of it increases. It is necessary for nation to
know it thoroughly by realizing it as system.
Nominal economic growth ratio has been minus for several years. And equity
price has been down. It means that amount of money should decrease naturally.
Nation will be informed of it by introduction of minus interest rate.
[Money decreases without use of it.]
If it is understood, consumer confidence may be mustered. If consumption increases, it is not so difficult to recover from the situation called recession.
Consumption tax is discussed to reconstruct finance, but you may understand
that it is extremely nonsense policy. Increase in consumption tax leads
to decrease of consumer confidence and slumber of economic activity. To
muster consumer confidence must be root of economic measures.
Currency used in consumption produces economic value. It becomes profit
of company directly and it contributes to finance as corporation tax and
tax on income of those who works in the corporation.
The problem is accumulated currency. It produces no economic value. Therefore, it is more important to tax the accumulated money than to increase consumption tax.
And what is as effective as the tax is introduction of minus interest
rate. Decreasing surplus currency by application of minus interest rate
to whole currency, whole economy is revitalized.
Minus interest rate is applied to issue of national bond. As assets decrease
by buying national bond, financial institution and individual will not
buy it. Therefore, Bank of Japan needs to buy all amount of it. Law arrangement
for this purpose will be necessary.
If minus interest rate is introduced to national bond, huge problem of
current Japanese economy - [increase of national bond] will be settled
tentatively. Balance will decrease because of minus interest rate.
As economic growth rate has been minus since 1998, national bond should
have been issued at minus interest rate naturally. But as plus interest
rate has been continued, balance of national bond has increased as much
as the gap. It means that national bond needs to be issued at interest
rate lower than economic growth rate for the next few years. Otherwise,
increased national bond can’t be decreased.
Credit ranking / rating of national bond are lowered because balance became
too much compared to scale of economy. Real value of economy is added value
produced in real economy. As excessive national bond compared to the scale
has been issued, possibility of the asset is questioned. It is shown as
downgrade of rating of the bond.