Japan's 30-year government bond yield has broken above 4%, and it may even move toward 5%. This isn't just a Japan-only issue—the room for central banks worldwide to solve problems by printing money is getting increasingly narrow.
Over the next few decades, whoever can move first to carry out wealth-and-income redistribution reforms may become the winner of this century. Rebalancing the gap between the rich and the poor will be painful; if it succeeds, it's called reform. If it fails, it's called revolution.
Judging by the patterns of human history, the likelihood of revolution when people are forced into it is often higher than the likelihood of voluntary reform. Debt cycles, diminishing marginal returns from monetary policy, and entrenched structural inequality—these old problems are all erupting at the same node.
With Japanese long-term bond yields surging, the reality behind it is tighter global liquidity, inflation expectations, and the fact that many central banks' toolkits are running out. The end of the era of money printing means the scramble over the redistribution of existing wealth will become even more intense.
Historically, each major reshuffling of wealth has come from either war, revolution, or the rare case of a very small number of successful top-down reforms. Will this time be any different? We'll wait and see.
Over the next few decades, whoever can move first to carry out wealth-and-income redistribution reforms may become the winner of this century. Rebalancing the gap between the rich and the poor will be painful; if it succeeds, it's called reform. If it fails, it's called revolution.
Judging by the patterns of human history, the likelihood of revolution when people are forced into it is often higher than the likelihood of voluntary reform. Debt cycles, diminishing marginal returns from monetary policy, and entrenched structural inequality—these old problems are all erupting at the same node.
With Japanese long-term bond yields surging, the reality behind it is tighter global liquidity, inflation expectations, and the fact that many central banks' toolkits are running out. The end of the era of money printing means the scramble over the redistribution of existing wealth will become even more intense.
Historically, each major reshuffling of wealth has come from either war, revolution, or the rare case of a very small number of successful top-down reforms. Will this time be any different? We'll wait and see.