Kuroda's comments emphasizes the markets addiction to QE

As much as I oppose the thought of more deviant ways to stimulate the world economy with "free"money, the coyness of Bank of Japan governor Haruhiko Kuroda in a recent radio interview with BBC 4 is quite comical to say the least. This after the market perceived the central bank to evoke the use of Helicopter Money in an effort to purge the Japanese economy of deflation.

The market drew even more inference in its arrival when former US Federal Reserve Chairman Ben Bernanke made a visited to Japan a week and a half ago in a meeting with Japanese economic policymakers over possible ways of reviving its economy with alternative tools. Bernanke is a strong proponent of helicopter money so the link between the two inevitably matched up and got market participants racing to splash out on speculative assumptions.

We've seen a resurgence of buyers on the market following the British referendum which many had thought would devastate financial market stability yet has left many baffled when staring at new all time highs being registered in US markets as well as the buoyancy of global indices to erase all losses incurred two days after the results of Brexit.  

Bank of #Japan's Kuroda rules out 'helicopter money' https://t.co/qRusUlrvKw

— Pedro da Costa (@pdacosta) July 21, 2016

A close affinity by market participants to the use of quantitative easing methods to abate consequential risks leaning on the global economy have become so intertwined that any inkling of its continuation sends markets into a overdrive to get its hands on the most freely available assets with returns attached to it.

Sooner or later this hocus pocus will end but policymakers aren't committed to put an end to the extreme out of fear of collapsing an already fragile system built up artificially over the past eight years. When the realisation sinks in that the world doesn't require to be flooded out with hordes of money piles but instead a restructured approach to dealing with evolutionary economic problems, the damage done will be insurmountable and a need to start from the bottom up begun.

Driving market valuations upwards with money that has no cost suspends the decision making action that evolves out of borrowing money. It also has the quality of distorting the picture or outlook of the world economy due to its overpowering nature to secure returns instead of finding alternative asset classes to be placed in. Any asset that yields return is being flooded with "free" money to the detriment of the global financial system, a fate we'll only see when it finally gives up the falseness of the situation.