An end to exponential easing at the altar of Bernanke's faith-based inflation!

Welcome to Capital Account. Top executives at more than 80 major US corporations sent a letter to Congress asking for “comprehensive and pro-growth tax reform, which broadens the base, lowers rates, raises revenues and reduces the deficit.” The statement, organized by the ‘Fix the Debt’ campaign, calls for a Simpson-Bowles type approach to rein in the US deficit: Three dollars in spending cuts for each dollar of tax increases. The US has run trillion-dollar budget deficits for more than four years now, amounting to more than $16 trillion in national debt. With no plan in sight for politicians to significantly reduce spending or balance the budget, business executives like General Electric’s Jeff Immelt and BlackRock’s Larry Fink have stepped out of the shadows to pressure Congress to act. We talk to our guest, Simon Mikhailovich of Eidesis Capital, about possible ways to tackle the US debt.

Japan's finance ministry will hold crisis talks with bond dealers tomorrow, according to the Financial Times. Japanese politicians are at odds over a bill that would allow the government to borrow 38.3 trillion yen ($479 billion) to finance the country’s deficit. Japan’s first lost decade is quickly turning into a second one, as the government has racked up a more than 200 percent debt-to-GDP ratio. Yet even with that high debt burden, the Japanese bond market has not witnessed a cataclysmic explosion, and the yen has actually seen a dramatic appreciation in its value compared to the dollar over the past four years. In fact, the government of Japan can borrow for 30 years at less than 2 percent – a better rate than the US. We talk to Simon Mikhailovich, co-manager of Eidesis Capital, about what lessons the US can learn from Japan. 

Plus, new GDP numbers from the UK show that the country has emerged from recession, with economic output rising by one percent. Some attribute the rebound to the 2012 Olympic Games, while others credit austerity measures. Lauren and Demetri discuss how sustainable this GDP boost really is in today’s ‘Loose Change.’

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