In an Op Ed for CNBC written by Peter Schiff, the economist calls “Abenomics” a “death spiral.” Schiff said that the Japanese economy has been a “petri dish of Keynesian ideas” and is sounding the alarm, although few are willing to listen.
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The Japanese economy has been sluggish for 20 years, but Schiff said policies to try to remedy that situation have been worse. Shinzo Abe’s aim has been to weaken the yen and to create inflation. With that goal, he has been successful, as the yen has dropped 23%. In the meantime, the Bank of Japan is purchasing equity and property. But Schiff concludes that Japan has nothing to show for this policy than a bona fide recession, 3% inflation and a devalued yen. The yen is not helping trade the way Abe expected and inflation is not boosted wages the way he expected. Schiff thinks Abenomics has been a failure and despairs that economists recommend Europeans adopt the same policy.