US and Japanese quantitative easing

when Japan faced its own banking and debt crisis in the 1990s the first thing it did is it started to lower the its target interest rate or the rate that banks borrow reserves from each other and the way to do that is you print money in the case of Japan the central bank prints yen it buys short-term government securities but the byproduct of that is that it increases the amount of currency or reserves in circulation all banks have more reserves so the demand for that reserves will go down or the cost of borrowing it will go down and so it lowers the interest rate but Japan did that enough so they got to a zero percent interest rate but then it really couldn't lower that interest rate anymore that's exactly what Bernanke is faced with the u.s. credit crisis so the next thing that Japan said is ok we still want more money to enter into circulation so we're going to keep printing we're going to keep printing more yen we're going to keep printing more yen but since it's really of no use just to buy the short-term debt anymore because we've already kind of priced those as high as we can we've lowered short-term interest rates as much as possible let's use this stuff to buy other things let's just get this money into circulation any which way we can so let's buy long-term Japanese Treasuries let's buy let's buy corporate debt so they did buy a bunch of stuff but their intention was literally just to increase the quantity to increase the quantity of money so what the Japanese did was kind of pure quantitative easing they were trying to print money at any cost and let that money go into circulation in any which way as possible and they would buy a bunch of stuff to do it what Bernanke is doing mechanically is not that different than what the Japanese did he started off trying to lower short-term interest rates so who would buy short-term securities it would increase the amount of reserves in circulation lower the overnight borrowing rate lower the federal funds rate but when that went to 0% so they both hit they both hit this floor at 0% Bernanke's like well how do I solve the log jam in the credit markets and Bernanke just like Japan says well I'm going to start printing more money and I'm going to use it to buy assets that the Fed does not traditionally I and Japan did this as well the difference and this is how Bernanke explains the difference is he doesn't view this as pure quantitative easing not because it's mechanically different because it really is mechanically the same thing but he calls it credit easing and in his mind the difference between quantitative and credit easing is the intent and where you do direct that extra money that you've printed in in Japanese Japanese case they printed money for the sake of printing money and they bought all of this stuff just to get that money into circulation in Bernanke's case he is printing money he who does want that money in circulation but that's not the end that he's trying to achieve the end is is to increase demand for some of these types of securities where maybe there's a log jam so the different even though mechanically they're saying Bernanke says this is credit easing because I'm trying to fix a problem in the commercial debt market or I'm trying to fix a problem in the mortgage-backed security market while Japan was just trying to print money for the sake of printing money