Bank of Japan Collapses? – Fact Check

Debunking the Bank of Japan Faces Collapse Rumor: Insights and Analysis

The Claim

The claim is that the Bank of Japan has collapsed or facing collapse in November, 2023 due to its monetary policy and the instability of the Japanese financial system. Specifically, it is alleged that the BOJ’s quantitative easing (QE) program has created a massive bubble in the Japanese economy that is now on the verge of popping.

The Evidence

There is no credible evidence to support the claim that the Bank of Japan has collapsed or facing collapse. The Bank of Japan remains a functioning central bank as of  November, 2023 and continues to carry out its duties. The BOJ’s website is still up and running, and the bank is still issuing press releases and other official statements.

The Birth of a Misinformation Wave

Recently, the financial world was abuzz with a startling claim: the Bank of Japan, a pivotal player in the global financial arena, was on the brink of collapse. This rumor, traced back to Robert Kiyosaki, co-founder of The Rich Dad Company, emerged on the television show “Cavuto: Coast to Coast.” Kiyosaki’s theory hinged on the Bank’s heavy involvement in the derivatives markets, compounded by its long-standing policy of low interest rates.

The Derivatives Dilemma

Kiyosaki underscored the scale of the derivatives market, financed, as he claimed, by the Bank of Japan, to the tune of a quadrillion dollars. These financial instruments, often described as complex and risky, were portrayed as ticking time bombs, with the potential to trigger a financial catastrophe.

A Broader Economic Context

Adding layers to his prediction, Kiyosaki criticized the widespread practice of money printing by central banks and the Federal Reserve’s rapid interest rate hikes. He painted a picture of a looming financial crisis, hinting at a possible currency war with China gaining leverage in global dominance.

The Reality Check

However, a thorough examination of recent news and official statements paints a markedly different picture. The Bank of Japan, far from teetering on the edge of failure, is actively engaged in recalibrating its monetary policies. Notable developments include:

• Strategic Shifts: Discussions on exiting ultra-loose monetary policies.
• End of Negative Rates: Indications of a shift away from negative interest rates.
• Policy Dismantling: Steps taken towards dismantling decade-long accommodative policies.
• Market Stabilization Efforts: Increased vigilance in yen valuation to stabilize markets.

Conclusion: Sifting Fact from Speculation

The narrative spun by Kiyosaki, while intriguing, stands on speculative grounds and lacks confirmation from credible financial data or reports. The Bank of Japan’s active role in policy adjustments and market communications contradicts the collapse theory. This scenario underscores the critical importance of cross-verifying sensational claims with reliable sources and maintaining a vigilant stance against the spread of misinformation in our interconnected financial world.