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Pragmatic Capitalism

Practical Views on Money, Finance & Life

REVISITING JAPAN’S REACTION TO QE

When the BOJ first announced QE in Japan in March 2001 the Nikkei 225 went wild.  Over the following 6 weeks equities rallied over 16%.  The reaction has been almost identical in the S&P 500 over the last 2 months.  But as investors in the USA begin to realize that QE is not the panacea it was first advertised as the S&P 500 has begun to reverse course.  In Japan, this was a scenario that did not end well as equities declined 43% in the following two years.  Although history rarely, if ever repeats, this is one chart that might be worth taking note of:

Cullen Roche

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC.Orcam is a financial services firm offering asset management, private advisory, institutional consulting and educational services.He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance and Understanding the Modern Monetary System.
Cullen Roche

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