According to a recent video feed by CNBC, the Bank of Japan has negative interest rates, scrapped monetary base targets and controls the yield curve. Actually, it communicated that 10y bonds will have a zero interest rate. As a look at recent data shows, the BoJ is clearly achieving what it has announced. Somehow, all of these things used to be in the territory of monetary cranks when monetarism ruled for a blip during the 1980s:
- negative interest rates
- no monetary supply targets
- controlling the yield curve (long-term interest rates)
Now, they are all reality, in one of the biggest industrial powers of this planet. Sometimes, things change rather quickly. It is now monetary theory that has to adjust to the new world we live in.
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