Wall Street was too excited about the Fed keeping interest rates unchanged this week and missed the latest major stock market correction signal out of Japan.
Most investors focused on the Dow Jones Industrial Average climbing 1.1% this week.
But what they should have focused on is a dangerous policy from the Bank of Japan (BoJ) that is leading the global economy straight to a stock market correction.
We’re going to explain this policy today, and once we do, you’ll see why a stock market correction is due…
How the BoJ Is Creating a Stock Market Correction
On Jan. 9, the BoJ instituted a negative-interest-rate policy (NIRP) to create economic growth.
Here’s how it works. Banks in Japan are charged a fee for depositing money by the BoJ. Because the banks don’t want to incur the fee, they will theoretically lend more money. The more money that is lent, the more people in Japan will spend on homes, cars, and starting up businesses.
This post was published at Wall Street Examiner on September 23, 2016.