While this all started with a currency “war,” it seems – according to a stunningly candid transcript of Japan’s finance minister’s conversation with none other than Paul Krugman – that the real endgame here is actual war. Aso remarked that “a similar [deflationary mindset] had occurred in the US in the 1930s. What solved the question? War! Because World War II had occurred during the 1940s and that became the solution for the United States. [We] have to switch [the Japanese] mindset… we are looking for the trigger.“
Their imminent departure from evening news programmes is not just a loss to their profession; critics say they were forced out as part of a crackdown on media dissent by an increasingly intolerant prime minister, Shinzo Abe, and his supporters.
Only last week, the internal affairs minister, Sanae Takaichi, sent a clear message to media organizations. Broadcasters that repeatedly failed to show “fairness” in their political coverage, despite official warnings, could be taken off the air, she told MPs.
Momii caused consternation after his appointment when he suggested that NHK would toe the government line on key diplomatic issues, including Japan’s territorial dispute with China. “International broadcasting is different from domestic,” he said. “It would not do for us to say ‘left’ when the government is saying ‘right’.”
From the Guardian article: Japanese TV Anchors Lose Their Jobs Amid Claims of Political Pressure
I’ve commented on the spectacular failure of Japan’s “Abenomics” several times in the past, most recently in last summer’s post, Japan’s Economic Disaster – Real Wages Lowest Since 1990, Record Numbers Describe “Hard” Living Conditions. Here’s what we learned:
“Tokyo will consider dispatching its Self-Defense Forces to the South China Sea, Prime Minister Shinzo Abe told U.S. President Barack Obama on Thursday, suggesting a possible role for Japan in patrolling those tense waters.”
On Tuesday, Chinese Vice Foreign Minister Liu Zhenmin told the press that contrary to the narrative being propagated by Washington and its allies in the South Pacific, Beijing had actually shown “great restraint” in the South China Sea.
China, Liu went on to explain, has tolerated the “occupation” of the disputed waters even as Beijing has “both the right and the ability to recover the islands and reefs illegally occupied by neighboring countries.” Essentially, Liu said China would be well within its rights to forcibly expel The Philippines, Malaysia, and Vietnam from the Spratlys.
– Japan Allows Military to Fight for the First Time Since WW2 (The Daily Sheeple, July 18, 2015):
When the United States defeated Japan at the end of World War Two, they pretty much made the island nation their own little colony. They occupied the country, built military bases on their sovereign territory, and influenced the drafting of their postwar constitution. More importantly, the Japanese relinquished their right to wage war due to Article 9 of their constitution, and handed over the defense of their nation to the United States. The English translation of that article reads:
– Japan’s Economic Disaster – Real Wages Lowest Since 1990, Record Numbers Describe “Hard” Living Conditions (Liberty Blitzkrieg, July 13, 2015):
With so much attention rightly focused on China at the moment (see: Chinese Authorities Arrest Over 100 Human Rights Activists and Lawyers in Desperate Crackdown on Dissent), people aren’t paying enough attention to the budding economic calamity unfolding in Japan.
While “Abenomics” has succeeded in boosting the stock market and food prices, it has utterly failed to raise wages. In fact, wages adjusted for inflation have plunged to the lowest since 1990. As such, a record number of households now describe their living conditions as “somewhat hard” or “very hard.”
“When a country embarks on deficit financing and inflationism (=quantitative easing) you wipe out the middle class and wealth is transferred from the middle class and the poor to the rich.”
– Ron Paul
Quantitative easing = printing money = creating money out of thin air = increasing the money supply = inflation = hidden tax on monetary assets = theft!!!
“By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
– John Maynard Keynes
“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. … This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”
– Alan Greenspan
Aaaaand Japan has a debt-to-GDP of over 400%!!!
– Japan Shocked To Find Abenomics Is Destroying Its Middle Class (ZeroHedge, April 8, 2015):
In central planner “mission accomplished” news, the wealth divide in Japan is growing under Abenomics and middle class citizens are at risk of falling into poverty, The Japan Times says. Despite nightly sound bites from Kuroda, Aso, and Abe himself designed to assuage fears that the country’s gargantuan monetary experiment may yet fail to pull Japan out the deflationary doldrums, some people are getting impatient as the number of households on welfare continues to rise as does the number of nonregular workers. This comes on the heels of the rather amusing news that the country’s Labor Ministry had fabricated a year’s worth of data on wage growth (it turns out there was none) and after countless warnings from us that the PM’s policies would end in spactacularly bad fashion (see here, here, and here for instance).
– Japan’s Abe Wins In Landslide Victory, LDP To Have Supermajority According To Exit Polls (ZeroHedge, Dec 14, 2014):
As previewed yesterday, in one of the lowest turnout elections in recent years (due to heavy snow: where have we heard that before) the ruling party of Japan’s Prime Minister Shinzo Abe, the LDP, is set for a landslide victory in the lower house elections today, according to exit polls. Here is Bloomberg with the details:
- JAPAN RULING LDP WINS 275-306 SEATS: NHK EXIT POLL
- JUNIOR COALITION PARTNER KOMEITO WINS 31-36 SEATS: NHK POLL
- JAPAN OPPOSITION DPJ WINS 61-87 SEATS: NHK EXIT POLL
- JAPAN INNOVATION PARTY WINS 30-48 SEATS: NHK EXIT POLL
- JAPAN COMMUNIST PARTY WINS 18-24 SEATS: NHK EXIT POLL
- JAPAN RULING COALITION SET TO WIN 2/3 MAJORITY, NHK EXIT POLL
- TURNOUT PROJECTED AT BETWEEN 51.7% AND 52.9%
What happens next?
AMARI: ABENOMICS HASN’T FAILED (so this was the expected outcome?)
SUGA: INVENTORIES, WEATHER, CONSUMER MINDSET CAUSED GDP FALL (nothing to do with record-high misery-index induced by crushing the currency of an energy-import-dependent nation?)
Japanese GDP fell for the 2nd quarter in a row making it official – as we warned a month ago – that Japan has entered a triple-dip recession. Againstr hope-strewn expectations that the rebound from a sales-tax-driven slump would create a magical 2.2% (annualized) expansion, Japanese GDP slumped 1.6% in Q3 – missing by the most since March 2011. So no tax increase… and thus fiscal responsibility goes out the window. Abe dissolves government and bails on another failure? The initial kneejerk reaction sent USDJPY surging back over 117.00 (and NKY followed) but that has quickly reversed and NKY futures are 600 off their highs (and S&P futures are back to last Monday’s lows).
– Japanese man self-immolates protesting govt push to end 60 years of pacifism (RT, Nov 12, 2014):
A Japanese man has died after setting himself on fire in a central Tokyo park in what appears to be a protest against the country’s renunciation of its pacifist constitution and the prime minister’s military push.
– Japan Admits It Has Entered A Triple-Dip Recession (ZeroHedge, Oct, 7, 2014):
On Sunday we warned it would happen. Well, it happened.
From Goldman Sachs:
The Indexes of Business Conditions comprises leading, coincident, and lagging composite indices compiled from various economic statistics and market indicators. Since the components are already announced in advance, the composite indices come as no surprise as they can be estimated in advance. That said, the data release is closely watched as an indicator of potential turning points in the economy, as the Cabinet Office makes an assessment of the state of the economy based on the trend in the coincident CI, using a set of objective criteria that eliminates arbitrariness.
Of the 11 indicators that make up the coincident CI, 8 made a negative contribution mom in August, as expected. The coincident CI fell 1.4 points in August to 108.5 from 109.9 in July. The three month average of the coincident CI declined 0.84 points, declining for 5 months in a row, and the 7-month average declined 0.87 points, a third month of decline in a row.
The Cabinet Office revised down its economic assessment to “signaling a possible turning point” from “weakening” for the first time since April, as the 7-month average sign for the coincident CI changed, and the change swung by more than 1 standard deviation in the reverse direction. According to the Cabinet Office, such a change in assessment provisionally indicates a likelihood that the economy has already fallen into recession. This is effectively akin to the government acknowledging that the economy is in recession.
Which means Japan is now in its third recession since Lehman, and fourth since 2008.
Japan is finished.
– Game Over Abenomics: “This Week Japan Will Acknowledge It Is In Recession”, Goldman Reveals (ZeroHedge, Oct 5, 2014):
We have been waiting for this particular bolded sentence ever since we predicted it would take place back in December 2012 when a bunch of Keynesians, a disgraced former/current prime minister with a diarrhea problem and, of course, the Goldman Sachs’ corner suite, first unleashed Abenomics.
From Goldman’s Naohiko Baba, previewing this week’s key Japanese economic events
The Cabinet Office makes an assessment of the state of the economy based on the trend in the coincident CI, using a set of objective criteria. The August coincident CI is set to print negative mom. In this case, the Cabinet Office’s economic assessment will likely shift downward to “signaling a possible turning point” from the current level of “weakening”. According to the Cabinet Office, such a change in assessment provisionally indicates a likelihood that the economy has already fallen into recession. This is effectively akin to the government acknowledging that the economy is in recession.
And because every Keynesian lunacy has to end some time, RIP Abenomics: December 2012 – October 2014.
– The Trials and Tribulations of “Abenomics” (Acting-Man, Sep 14, 2014):
We have frequently discussed the nonsensical attempt by Japanese prime minister Shinzo Abe and BoJ governor Haruhiko Kuroda to print and spend Japan back to prosperity. By now it is well known that devaluing the yen has not achieved the desired effect, but rather the opposite. Not only have exports not really received the expected boost, but Japan’s trade and current account surplus have decreased markedly, even posting negative numbers for the first time in decades. Of course, currency debasement never works: it cannot work. This is Keynesian logic and brilliance in all it splendor.
H/t reader M.G.:
“A WSJ article about the contracting economy in Japan. It addresses everything but the truth………how can these writer lie so?
How do they keep their jobs? Or, perhaps this is how they do keep their jobs, lie…….”
Yes, they have to lie all of time to keep their jobs. Maybe I should better say that the truth is getting edited out all of the time and those journalists that don’t like it that way and do something about it can look for another job (other than being a journalist, because no other paper will employ them ever again).
This is a fact and has been exposed by many journalists from all around the world.
Were it not for Fukushima, Shinzo Abe would be destroying Japan single-handedly.
Japan is totally finished on so many levels it’s hard to believe.
– Japan’s Economy Contracts Sharply (Wall Street Journal, Aug 12, 2014):
Households Cut Spending After Sales-Tax Increase in April
TOKYO—Japan’s economy contracted sharply in the second quarter after a sales-tax increase in April sent household spending tumbling, which economists said could pressure the government to take additional stimulus measures.
Real gross domestic product, the total value of all goods and services produced in the economy, shrank 6.8% in the three months through June on an annualized basis from the prior quarter.
And what about Fukushima???
A protester holding a placard shouts slogans at a rally against Japan’s Prime Minister Shinzo Abe’s push to expand Japan’s military role as police officers refrain him in front of Abe’s official residence in Tokyo June 30, 2014 (Reuters / Yuya Shino)
– ‘Stop war’: Thousands protest in Japan over military expansion law change (RT, June 30, 2014):
Thousands gathered outside the Japanese prime minister’s office to protest constitutional changes that would expand Japan’s military role and allow overseas deployment. It comes one day after a man set himself on fire in protest against a proposed law.
Protest organizers have estimated that 10,000 people – including students, pensioners, and women – attended the rally outside Prime Minister Shinzo Abe’s office in Tokyo. However, police put the number of participants at “several thousand.”
The demonstration comes on the eve of a cabinet meeting, where lawmakers are expected to endorse a resolution that would expand the use of Japan’s military by reforming the constitution.
– Japanese Man Self-Immolates Over Abe’s Increasingly Militarist Shift (ZeroHedge, June 30, 2014):
Under Article 9 of its post-war pacifist constitution, Japan is blocked from the use of force to resolve conflicts except in the case of self-defense; but, as The BBC reports, Japan’s Prime Minister Shinzo Abe says he wants a new interpretation of the constitution to be agreed on. This has brought major protests in Japan, climaxing this weekend when a man set himself on fire in central Tokyo in protest at a proposed law which could allow Japan to deploy its military overseas. With stocks falling, JPY strengthening, an economy collapsing, and a surging disapproval rating, it seems Abe needs a 4th arrow – war?
– The Wrath of Abenomics: Sales Collapse, Inflation Soars (Testosterone Pit, May 30, 2014):
Even the soothsayers and Abenomics spin doctors expected a downdraft after Japan’s consumption tax was jacked up to 8% from 5%, effective April 1. But not this.
The tax hike had been pushed through parliament by Prime Minister Shinzo Abe’s predecessor. It was supposed to save Japan. But no one wants to pay for government spending. The tax proved to be so unpopular that Prime Minister Noda and his government were unceremoniously ousted at the end of 2012.
Japan is in terrible fiscal trouble. Half of every yen the government spends is borrowed, now printed by the Bank of Japan. Expenditures can’t be cut, apparently, and government handouts to Japan Inc. had to be increased. Yet something had to be done to keep the gargantuan deficit from blowing up the machinery altogether, and it was done to those who spend money.
Just ask the USS Ronald Reagan crew!!!
I could post here hundreds of links that would expose Abe as the ultimate liar.
– BBC Interview: “News about Fukushima… keeps getting worse” — Japan Professor: “Rash of disease” in Fukushima children, rate of cancer in thyroid up to “dozens of times higher than usual” — Expert: Forcible radiation exposure by gov’t
“If you don’t educate yourself now and fast, you’ll die.”
– Prof. Hayakawa of Gunma University
– Abe seeks to dispel radiation concerns stirred by Japanese manga (Mainichi/Kyodo, May 19, 2014):
TOKYO (Kyodo) — Prime Minister Shinzo Abe on Saturday sought to dispel concerns stirred by a famous Japanese comic which linked radiation exposure from the crippled Fukushima Daiichi nuclear complex to nosebleeds, saying there is not a single case of someone’s health known to have been damaged through exposure.
In a recent edition of the long-running comic “Oishinbo,” the main character is shown having a nosebleed after visiting the plant, where three nuclear reactors melted down and buildings exploded days after a huge earthquake and tsunami hit northeastern Japan in 2011.
“There is no confirmation that someone’s health has been directly affected by radioactive substances,” Abe told reporters after visiting Fukushima Medical University to be briefed about radiation effects in the wake of the disaster at the Fukushima plant.
“There is a need for the state to make all-out efforts to deal with baseless rumors,” Abe said and vowed to provide accurate information to eliminate such concerns.
– Abe, Merkel agree to cooperate on Ukraine (NHK, April 30, 2014):
Japanese Prime Minister Shinzo Abe and German Chancellor Angela Merkel have agreed that their countries will work together to resolve the crisis in Ukraine.
The 2 leaders held an hour-long summit meeting and joint news conference on Wednesday in Berlin. Germany is the first stop on Abe’s European tour.