Tags: Exclusive Interviews | MidPoint | John Browne | economy | Japan | yen

Economist: Japan's Contracting Economy 'Catastrophic'

By    |   Monday, 08 Sep 2014 05:19 PM

The news that Japan's economy shrunk by 7.1 percent is "catastrophic" because its currency doesn't have the strength of the dollar, economist John Browne explained Monday on "MidPoint."

"It's doubly astounding, really," Browne told Ed Berliner on Newsmax TV.  "If you include the European Union as an economy, it's the fourth-largest economy, but the third most traded currency, the yen, in the world," he said.

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"It has introduced quantitative easing, copying the Fed, but it's introduced something like 300 percent," he explained. "In other words, three times the American QE.

"But when you realize their economy is only 40 percent the size of the American economy, it's actually something like 700 percent of the U.S. QE," the former UK parliament member said.

And he explained that this is in addition to "consumers shrinking and so on."

The problem is that "unlike America, the Japanese yen is not the international reserve currency so they can't just go on creating more and more on a click," Browne said.

"They have to pay for it by borrowing or taxing, and one of the things they've had to do is raise taxes so the consumers are not consuming, and so consumption is down to 5.1 percent," he said.

"Of course, the economy is down 7.1 percent when it was expected to be bad at 6.8 [percent]," he added.

"It is catastrophic because this isn't America," the economic consultant at Euro Pacific Capital said. "This is a country that has to pay for its debt instead of just clicking."

According to Browne,"it's open proof that Keynesianism is in really bad shape, desperate shape.

"The whole of the Western world is concentrating on consumption, GDP," he said. "We should be on the Adam Smith principles, concentrating on production.

"In those days, America was really going great guns," he added.


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The news that Japan's economy shrunk by 7.1 percent is "catastrophic" because its currency doesn't have the strength of the dollar, economist John Browne explained Monday on "MidPoint."
John Browne, economy, Japan, yen
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2014-19-08
Monday, 08 Sep 2014 05:19 PM
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