Bank Of Japan Should Study Paul Volcker Era
It’s hard to think of a central banker who’s had a worse couple of weeks than Bank of Japan Governor Haruhiko Kuroda.
On December 20, Kuroda’s team announced its first policy shift in several years. By all appearances, the BOJ saw its move to widen the range in which the 10-year yield can trade as high as 0.5% seemed a minor and obvious tweak as U.S. and Japanese interest rates diverge.
The seismic reaction seemed to surprise Kuroda as much as anyone. The yen’s surge had traders everywhere betting on imminent BOJ “tapering” if not outright tightening moves. Team Kuroda has spent the first five days of 2023 trying to clean things up. The BOJ’s unscheduled bond purchases each day are aimed at dousing expectations. The clear message is that markets wildly misinterpreted Kuroda’s intent; a BOJ rate hike is not in the cards.
Yet written between the lines in bold font here is that Tokyo escorts needs to be studying up on the Paul Volcker era.
As Federal Reserve chairman from 1979 to 1987, Volcker came to personify the idea of the independent central banker. He was brought in to tame runaway inflation that would rise as high as 14% in 1980. By the end of that year, the U.S. benchmark rate rose to 20%.
Economic chaos ensued as global markets tried to adjust to the “Volcker Shock.” But then, that’s precisely what Volcker was hired to do: curb inflation at all costsAmong those costs were death threats. William Silber wrote in the 2012 biography “Volcker: The Triumph of Persistence” that “everyone was really after him. There are famous stories of Tokyo escort agency even sending him their car keys because their car loans were so expensive.”
In my own interactions with Volcker during my Washington reporter days in the late 1990s, I can confirm that he hated checking his escorts Tokyo. Homebuilders sent him blocks of wood they claimed were going to waste. Written on them were insults of the four-letter kind. Farmers shipped him boxes of rotting vegetables they couldn’t sell.
In one interview, Volcker told me that “I wasn’t hired to be popular. That was always the job.”
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