Who prints money faster, the US or Japan?

Indeed, who prints money faster, the US or Japan? This is a good question, because people like Paul Krugman assure us that the Fed's printing of vast amounts of money is not even inflationary.

Well, was the Bank of Japan's policy of quantitative easing something we can even compare to the actions of the Federal Reserve in the last year or so? Well, let's get straight to the heart of the matter, the monetary base. Here is a graph that compares the monetary bases of the two countries since 1980. The monetary base in each country is set to "1" in 1980, so a level of "2" would mean the base is twice the amount it was in 1980. As you can see this graph, the current monetary base for the US is nearly 12 times what it was in 1980.

Note, click on the graph to view a much larger and better version.

[Source: US Federal Reserve, Bank of Japan.]

Here's what we see:

• From June 2001 to April 2003 Japan's monetary base went from 3.57 to 5.41, while America's went from 3.90 to 4.54. So during an almost two year period, Japan's monetary base increase by 50%, while America's increased by about 16% over the same period.
• From August 2008 until January 2009, Japan's monetary base went from 4.68 to 4.98, while America's went from 5.43 to 10.96. So during roughly a five month period, Japan's monetary base increased by 6%, while America's increased by about 100% (in other words it doubled!)

So it seems to me disingenuous to make the comparison between Japan and America. Beyond this comparison though, I would like to note two other things:

1. Japan's increase in its monetary base was not in reaction to a crisis, but a premeditated attempt to create inflation. The Bank of Japan was playing poker with the banks in an attempt to get them to lend money. Ultimately, bankers in Japan never even blinked, and Japan's money supply never faced any large increases. Japan never faced significant inflation.
   On the other hand, the Fed's increase in the monetary base was done without any premeditation while the Fed was in total panic mode. While the bank of Japan mostly increased the base by purchasing long term government bonds, the fed's asset holdings diversified into a veritable alphabet soup of dubious program.
    
2. We're told that Japan's policy of quantitative easing did not have any inflationary effects (i.e. it didn't raise prices or cause any bubbles and so on). Well, it did fuel the carry trade. Investor's borrowed money in yen, traded it for dollars, and then invested in America. So at least one question that needs to be seriously looked at is how much influence did the Bank of Japan's policy of quantitative easing have on the housing bubble in the US?

For my part, I don't think the comparison between what the Fed is doing now in America, and what the Bank of Japan did in Japan during quantitative easing as something that can easily be compared.

And in answer to the question that started this post, the US via the Federal Reserve. Support HR1207, audit the Fed.