Central bankers nowadays can relate first hand to the Chinese curse about living in interesting times. Last month Credit Suisse analysts ran the numbers on Japan and came up with some startling news: the country is on track this year to money-supply growth in the neighbourhood of 20 per cent.
The expansion in average outstanding monetary base, the narrowest measure of a country's money in circulation, is due to aggressive new actions by the Bank of Japan this spring which involve purchasing government bonds and company shares and even lending directly to business.
It is a radical - even shocking - policy response designed to lift the country out of its post-bubble malaise, says Dr Van Anantha-Nageswaran, an economist and director of global economics and asset allocation for Credit Suisse Private Banking.
'I think this is unprecedented monetary policy,' he says, adding that the actions are the central banker's equivalent of throwing money out of helicopters.
What concerns Dr Anantha-Nageswaran is that the inflationary policies practised in Japan are being mimicked around the world. For evidence, just take a look at the M3 money charts. Euro area annual monetary growth is 8.2 per cent, the United States is running at 8 per cent, Britain at 6.6 per cent and China at 21 per cent.
'They [central bankers] are trying to boost money supply and trying to keep their currencies cheap or at worst prevent them from strengthening,' Dr Anantha-Nageswaran says. 'This will remain the theme as long as excess pervades in industrial capacity and in the labour market.'
