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Dylan Grice On The Coming Japanese Hyperinflation

Tyler Durden's picture




 

To those who follow Dylan Grice's writings closely (and everyone should), his proposal that the only possible outcome for Japan, where stunningly tax revenues no longer ever cover non-discretionary expenditures - a sad fate that awaits none other than the US eventually, is to hyperinflate its way out, is not new. Nonetheless, during the just completed annual CFA Institute annual institute held in Edinburgh, he gave an updated presentation which indicates that he has not yet changed his opinion that if forced to pick between the lesser of two defaults, the only option is that of unbridled printing, now that the US has firm leg up in the global fiat race to the currency bottom, which we predicted back in 2009, will be the key feature of the macro theme until the end of the Keynesian experiment. So, as before, Grice's recommendation, away from the natural trade of shorting bonds (a negative carry trade which has cost the likes of Kyle Bass a pretty penny over the years) as one awaits this only possible outcome, is to actually discount the future, something the market has completely forgotten how to do, and buy stocks, in advance of the Weimar Rally for the Rising Sun. Below we present "Hoping for the best, preparing for the worst...in Japan" -  Grice's presentation of an upcoming Japanese hyperinflation, which explains not only why Japan can't afford higher JGB yields, but why its to-date favorable demographic are now looking uglier by the day, and the only outcome for Shirakawa is to finally bite the bullet and beat the Chairsatan at his own game, in the process forcing the Bernank's own hand if he wishes to retain the USD's place at the head of the FX devaluation race.

For the really ADHD afflicted, here is the "CDS trader" abridged version:

  • Japan’s unprecedented predicament: A large creditor nation, a bankrupt government, and a shrinking population
  • Competing forces in the hyperinflation template: An unsustainable public debt profile with persistent current account surpluses
  • Protecting portfolios: How investors can cheaply hedge against the risk of an extreme scenario

For much more, read inside:

Grice Hyperinflation

 

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Wed, 05/11/2011 - 23:40 | 1266484 Dapper Dan
Dapper Dan's picture
  • Nuclear fuel at Fukushima No. 1 unit likely melted after exposed

    TOKYO, May 12 - (Kyodo)

    Nuclear fuel rods inside the No. 1 reactor of the crippled Fukushima Daiichi power plant likely melted after being fully exposed and are being cooled in water at the bottom of the pressure vessel, plant operator Tokyo Electric Power Co. said Thursday.

    But we already knew that.

  • Thu, 05/12/2011 - 00:29 | 1266574 dlmaniac
    dlmaniac's picture

    Default or hyperinflate, Japan is facing the same issue.

    Thu, 05/12/2011 - 05:27 | 1266882 EnglishMajor
    EnglishMajor's picture

    Did everyone know that they have found Uranium in Hawaii and along the West Coast, or that they found Americium in New England?  Do you want to see what it looks like when nuclear reactors blow up and spew radiation into the upper atmosphere?

    http://www.youtube.com/watch?v=8UA5vontE2U

     

     

     

    Wed, 05/11/2011 - 23:45 | 1266491 tmosley
    tmosley's picture

    I guess this is "world falls apart" night on ZH.

    Wed, 05/11/2011 - 23:55 | 1266513 Nate Taggart
    Nate Taggart's picture

    Just a typical Wednesday...   And yes of course, the world happens to be falling apart tonight...

    Thu, 05/12/2011 - 00:19 | 1266563 topcallingtroll
    topcallingtroll's picture

    On thursdays trolls get half priced drinks and double posting privileges.

    Thu, 05/12/2011 - 03:32 | 1266808 Oh regional Indian
    Oh regional Indian's picture

    Troll comments and other sake induced babble aside, I hope the fullest degree of what has hit Fukushima is clear to us all.

    Clean water may not be clean, clean air may not be clean. Not for a looooong time anymore or at least not till the earth gives a huge "shake" and spills some healing waters all over the place.

    While Fukushima is down on the ZH headline sweepstakes, it's alive and well and spewing. Worse and worse news, every day, but now, no one really counting. Millions and millions of cooling water gallons back in the ocean. No where to put it. Can't go in, cannot leave it alone.

    If we can fully internalize the extent of this disaster, I think a lot of things, like how the world might look in a year, become clearer by the day.

    The world's 2nd/3rd largest economy just dove off a cliff.

    ORI

    http://aadivaahan.wordpress.com/2011/05/09/population-control-vectors/

    Thu, 05/12/2011 - 07:27 | 1266955 Orly
    Orly's picture

    Way off-topic here:

    I appreciated the link to the Gaia-Sophia philosophy but the ideas still point back to the veda and the concept of Maya.

    Are you sure I should read Castaneda again?

    :D

    Thu, 05/12/2011 - 08:46 | 1267177 citta vritti
    citta vritti's picture

    of course Castaneda himself made all or most of it up and passed it off, or let it pass, for good anthropology without apology.

    http://indiancountrytodaymedianetwork.com/2011/03/the-fake-carlos-castan...

    Thu, 05/12/2011 - 09:54 | 1267465 Orly
    Orly's picture

    Thanks for the enlightening link.  It was always troublesome to me that an Indian shaman would so readily accomodate a stranger and divulge so many secrets to him.

    As the article says, though, he was a very good writer.  Too bad it is a fiction of his own devise.

    :D

    Thu, 05/12/2011 - 11:33 | 1267981 Oh regional Indian
    Oh regional Indian's picture

    Actually to me, it does not matter anymore if Don Juan was real of a figment of Castenada's imagination. Those books triggered all kinds of things for/in me. That was their idea. He had tapped into something. No doubt. And yes, he had a knack for writing grippingly.

    Anyways, onwards then... though I suggest it is all there in The teachings of a Yaqui Indian, try:

     

    http://vedanta.org/wiv/overview.html

    Read through a bit. Feel free to reach me by e-mail if you feel called.

    And my advice would be to skip the Vedas, the Mahabharata and other scriptural myth and ritual.

    Vedanta is the essence of the whole thing. And it's secret is wrapped in a sound.

    You'll tell me when you hear it of course. ;-)

     

    ORI

    Thu, 05/12/2011 - 07:33 | 1266961 Green Leader
    Green Leader's picture

    They don't see it.

    They are too worried about gold and silver.

     

    Thu, 05/12/2011 - 02:58 | 1266785 Michael
    Michael's picture

    Gold is like Kyptronite to Federal Reserve paper money. Silver is like Garlic to the Bernanke vampire.

    Thu, 05/12/2011 - 03:16 | 1266800 Michael
    Michael's picture

    Kings, Queens & Soup Tureens.

    Barack Obama is a soup tureen. George Soros a wanna be king is a soup tureen. Ted Turner, Bill Gates, and Opra are soup tureens. George Bush is a soup tureen. Hillary and Bill Clinton are soup tureens.  

    Understand the concept?

    Thu, 05/12/2011 - 03:51 | 1266826 Michael
    Michael's picture

    I don't know how to get it,

    Back 2 Good (Video)

    http://www.youtube.com/watch?v=Rg93Lac49-Y

    Wed, 05/11/2011 - 23:50 | 1266503 SilverDoctors
    SilverDoctors's picture

    Can NAFTA Explain the Mystery Gold Shipments Across the US/Mexican Border?

    http://silverdoctors.blogspot.com/2011/05/docs-thoughts-on-case-of-myste...

    Wed, 05/11/2011 - 23:56 | 1266509 mynhair
    mynhair's picture

    What's different over history?

    How will silver bugs prove quality at 7-11?

    Like the US is solvent?

    We need armies of Zombies we can sell Lib brains to.

    Wed, 05/11/2011 - 23:54 | 1266517 tmosley
    tmosley's picture

    Flip the coin--it rings.  Drop the coin, it has a unique sound.

    Silver is easy to assay for.  No tools required.

    Thu, 05/12/2011 - 00:28 | 1266569 dark pools of soros
    dark pools of soros's picture

    copper too

    Thu, 05/12/2011 - 01:02 | 1266632 Keri at Bankste...
    Keri at Bankster Report's picture

    Yes, and of course for silver US coins, you can just look at the date.  Silver coins really go stand out.

    Any .999 metal is very to assay by determining the density: all you need is a graduated container (something big enough to hold the item and that has detailed tick marks on it for measuring the change in water level when you add the item), a gram scale, and some water.  I recently had to test some metal to verify whether or not it was sterling (92.5% silver, 7.5% copper), and so I bought a flask and a super cool 200 gram capacity scale (that reads to 0.000, 4 significant digits) on ebay for $5---for all of it.  I think this kind of gear is good to have on hand.  You can look up the density online or just get the density from testing something you know to be solid something.

    Thu, 05/12/2011 - 05:54 | 1266895 Urban Redneck
    Urban Redneck's picture

    I prefer reloading scales- the manufacturer has a natural incentive to make the reading to four significant digits accurate, as there are life-and-death, and hence significant monetary and legal risks to cutting quality too far.  There are no $5 bargains in the factory direct market, but they cost a lot less than the downsize risk on single counterfeit gold coin.

    Thu, 05/12/2011 - 08:36 | 1267123 I did it by Occident
    I did it by Occident's picture

    Or someone could make a mint (pun intended) by making simple conductivity circuit testers.  The conductivity of a .999 coin should be easy to determine.  Of course, one has to account for temperature and other environmental "noise" to make the circuit accurate enough.

    Thu, 05/12/2011 - 01:21 | 1266654 Temporalist
    Temporalist's picture

    When that comes into play everyone will know what real silver is.  That is like asking how do you know your dollar is real...and most people think they are when they're not.

    Thu, 05/12/2011 - 01:59 | 1266698 Kali
    Kali's picture

    7-11's wont survive.  First, looted and burned to the ground.  If they survive that, their supply chain will be severely disrupted and they will have nothing to sell.

    Wed, 05/11/2011 - 23:56 | 1266518 Zing
    Zing's picture

    Wrong call.  Deflation will rule the day before hyper-inflation can set in.  Too much debt for the edifice not to implode.

    Wed, 05/11/2011 - 23:56 | 1266525 tmosley
    tmosley's picture

    lol, you just ignore 100% of the history of fiat currency.

    But then, you were an unabashed troll from the start.

    Thu, 05/12/2011 - 00:16 | 1266558 topcallingtroll
    topcallingtroll's picture

    I dont disagree with you, but i think those in control of monetary policy in the usa and japan err on the side of timidity. It would take an amazing gob of monetization, putting this recent round to shame, to cause real hyperinflation. I see the authorities trying, but with half measures that may keep us right on the.border of contraction.

    Thu, 05/12/2011 - 00:41 | 1266599 wisefool
    wisefool's picture

    Did you just espouse the peter principle. Rip van winkle and forest gump rolled into a sweet little confectionary?

    Or are you doing the slim pickens yell at the end of "How I learned to not worry and love the bomb?"

    There is a really big difference. Krugman can not end up being the hero prophet of this era.

    Thu, 05/12/2011 - 01:57 | 1266693 jeff montanye
    jeff montanye's picture

    the fiscal hose is much harder for the politicians to squirt than the purely monetary one the treserve works (also helps their friends faster and more accurately).  imo you get stagflation that propels p.m.'s much faster than non p.m. equities where the drag of higher interest rates and the "stag" part are more strongly felt.

    i don't see how this makes krugman more a hero than anyone else who said the current plan is vastly suboptimal.  to the degree k. likes the current regime he will be damned by their poor results.

     

     

    Thu, 05/12/2011 - 00:39 | 1266591 akak
    akak's picture

    The disingenuous deflationary fearmongers are always silenced by the overwhelming evidence of inflationary fiat monetary history (still batting 1.000) that gives the lie to their pathetic propaganda about the non-existent "threat" of a fiat currency deflation.

    Thu, 05/12/2011 - 04:37 | 1266858 The Navigator
    The Navigator's picture

    I recently read an old saying but forget who said it - history doesn't repeat itself but it rhymes (maybe Mark Twain).

    So this is not 1978, it's not 1929, it's not 1934, but it kinda rhymes - deflation, inflation, stagflation, fuckMeFlation, yep I think its the last.

    This time it might be a little different but the stink is the same; common people in the pyre.

    Thu, 05/12/2011 - 06:23 | 1266906 Popo
    Popo's picture

    Uh.. you're sort of right, but not really.  Historically speaking deflation is the natural state for all economies, and hyperinflation is not.    In fiat based economies, there is (as I believe you are saying) a trend for the currency towards zero.  But it is important to note that that is not the same as hyperinflation.  Hyperinflation of course, would acellerate the approach to null value, but that is by no means assured at this point in time.

    The destruction of credit is very much the trend at this time -- far, far, far more than is expansion of the money supply.   M2 tells this story quite well, and ShadowStats confirms.

    I'm agnostic on this front -- but those who are so sure that 'hyperinflation' is on the table are the ones who are exercising belief over empiricism, economic knowledge or historical perspective.

    Furthermore -- one cannot look only at the history of fiat currencies, as any currency is essentially a derivative of its underlying economy.  The Australian dollar is backed by the commodity value of exports and potential exports.  The Norwegian krone is similiarly backed by oil reserves.  

    Anyone thinking the USD is 'unbacked' is being willfully blind to the state of geopolitics.  

    To put it bluntly,  the USD is backed by the military.   While that may sound like a statistic that does not belong on a balance-sheet -- it is without question the truth.  America quite literally controls the supply of the world's oil.  

    The value is in oil.  The mechanism of extracting value from the world's oil is the USD.  And the means of enforcing that status quo is the military.

    Will this last?   Probably not.  No, the US is probably f*cked over the long term.  I fully expect a collapse will come. 

    But those who preach "history" and "hyperinflation" as if the argument is an obvious one,  and claim that the USD is 'unbacked fiat'  are the ones practicing intellectual dishonesty  (or simply not understanding why the dollar is as strong as it is right now, and not worth pennies).

     

     

    Thu, 05/12/2011 - 08:36 | 1267124 The Profit Prophet
    The Profit Prophet's picture

    This ongoing deflation - inflation/hyperinflation argument is loaded with logical fallacies, and I wish that the very intelligent people who frequent this site would realize once and for all that it is not one or the other that will rule the day - it is both! Deflation and inflation/hyperinflation are two sides of the same coin and both are occurring as we speak!!! Deflation is a natural re-balancing of a manipulated market/economy, and inflation/hyperinflation is the man-made response to this deflation of an Oligarchy choosing to retain/increase their wealth. Systemic greed and corruption that crystallizes the political power of an Oligarchy allows for the eventual total control and manipulation of all wealth producing markets. In America (and the world), this manipulation manifested itself in insanely leveraged assets and multiple layers of asset derivatives, where the underlying asset values where intentionally inflated through blind Keynesianism.  The result of this market manipulation is false growth.  Market equilibrium theory (to which I subscribe) dictates that this false GDP must then be recaptured in order for the economy to recover and become healthy again.  This creates a catch-22 for the Oligarchs who control the monetary levers and political strings.  Do you allow the economy to naturally deflate and correct (defaults and haircuts) - voluntarily choosing to lose a portion of your wealth....or do you fight the deflation with every monetary and policy tool you have - preserving/increasing your own wealth in the process and shifting the resulting debt/losses to the masses? Our current conundrum is the result of the Oligarchs choosing the latter for the last 30+ years! The natural deflation currently taking place is now so massive that it is going to take a hyperinflationary response by the Oligarchs - in their hopeless attempt to retain their wealth - to fight the deflation. The natural deflation and hyperinflationary response happen together....they are both happening as we speak.....and who knows when it will all collapse - but it will collapse! 

    So what would you do if you were a card carrying member of the power elite?

    T.E.I.N. everyone!    

    Thu, 05/12/2011 - 09:37 | 1267397 Commander Cody
    Commander Cody's picture

    Agree 100%.

    Wed, 05/11/2011 - 23:58 | 1266526 Yen Cross
    Yen Cross's picture

    Highly unlikely. They (BoJ) is being spent down. They have so much off shore manufacturing. Lots of available resources and buildable land.

    Thu, 05/12/2011 - 00:06 | 1266537 tickhound
    tickhound's picture

    is buildable land an oxymoron?  sounds funny.

    Thu, 05/12/2011 - 00:34 | 1266584 Yen Cross
    Yen Cross's picture

    Canada ,North America,Africa, South America. Sounds funny doesn't it?

    Thu, 05/12/2011 - 01:01 | 1266629 tickhound
    tickhound's picture

    Yes it does.  The answer is Canada, err... What is Canada, Alex?  Of the four, it is the only one that is not a continent.

    Thu, 05/12/2011 - 01:48 | 1266681 Yen Cross
    Yen Cross's picture

    I don't recall mentioning continents? Just GEO GRAPHICS!

    Thu, 05/12/2011 - 00:33 | 1266587 floydian slip
    floydian slip's picture

    Japans turn to hold the piss bucket whilst Bernaise watches Count de Money shower his attention.

    Bernaise = Bernake

    http://www.wearysloth.com/Gallery/ActorsV/30667-8603.gif

    :D

    Thu, 05/12/2011 - 00:45 | 1266610 Yen Cross
    Yen Cross's picture

    I want to make (1) thing clear Fro S. I agree with both of you. But facts are facts. Do you want to fight facts or Capitalize on the the facts? Quit bitching and find the weaknesses!

     

    After wwii Japan had no intention of being Americanized. Americas guilt let them get their way. Japan has and always will have an expansionist policy. China fears a small little island nation. Think about it, and study some history.

    Thu, 05/12/2011 - 01:11 | 1266641 floydian slip
    floydian slip's picture

    You are the one that needs to study History of the World Part 1

    http://www.youtube.com/watch?v=JGfXiIXTpE0&feature=related

    are you laughing yet?

    Thu, 05/12/2011 - 01:15 | 1266648 Yen Cross
    Yen Cross's picture

    I will study the thread thank you.

    Thu, 05/12/2011 - 04:39 | 1266859 Vlad Tepid
    Vlad Tepid's picture

    Ahh, you again, Mr. Cross.  Why do we keep bumping into each other?  

    American guilt? Guilt had nothing to do with it.  We needed an industrially savvy ally to counter the Soviet/communist surge in East Asia. And secondly, Japan as expansionist "always?"  They hate to leave their homeland anymore let alone delusions of conquest, financial or otherwise.  And on what do you base these supposed fears that China harbors of Japan.  China hasn't even blinked at Japan since they built the bomb. I know you're a great trader but your dubious and bull-headed assertions about history and geopolitics leave me scratching my head.

    Thu, 05/12/2011 - 05:57 | 1266900 Urban Redneck
    Urban Redneck's picture

    Between the fall of the Berlin Wall and the meltdown of Fukushima - there was a raging cold war between Japan and China for access and influence in developing and undeveloped markets, it was a very costly cold/soft war which resulted in the accumulation of huge overseas tangible asset reserves for both States. 

    Thu, 05/12/2011 - 01:04 | 1266630 legal eagle
    legal eagle's picture

    All that extra paper, bullish for origami

    Thu, 05/12/2011 - 01:10 | 1266640 New Survivalist
    New Survivalist's picture

    Do they have carnival barkers in Japan?

    Thu, 05/12/2011 - 01:10 | 1266646 floydian slip
    floydian slip's picture

    pronounced 'calniral balkels'

     

    Thu, 05/12/2011 - 01:18 | 1266650 Yen Cross
    Yen Cross's picture

    (Carnivorous investus)

    Thu, 05/12/2011 - 01:33 | 1266671 Peak Everything
    Peak Everything's picture

    You know there is something perversely fucked in our system when the best thing that could possibly happen to our species and planet (population reduction) is viewed as a problem.

    Are there any Japanese historians out there?

    I've always wondered how Japan with its meagre natural resources and small land base allowed its population to rise to the most unsustainable level of any country on the planet. Japan is completely fucked when global trade in food starts to unwind, as it will before too long.

    Thu, 05/12/2011 - 02:06 | 1266702 Kali
    Kali's picture

    Soylent green?  If they survive Fuku.

    Thu, 05/12/2011 - 02:36 | 1266711 Transformer
    Transformer's picture

    Peak,

    And just why do you think that will happen?

    Thu, 05/12/2011 - 05:04 | 1266869 Vlad Tepid
    Vlad Tepid's picture

    Japanese historian here.

    It's true that Japan has few natural resources for an industrial nation and a relatively small land base, but just on the face of it I would challenge your statement of "most unsustainable."  They have a world class agriculture industry based around small farms (a lot of ZHers seem to think big ag is a global phenom, but the J bureaucracy has worked very hard to protect the Japanese small farmer and preserve as much self-sufficiency as possible.  There is no Con-Agra equivalent in Japan. Not even close. This is important to remember.  The small farmeris very much the backbone of Japanese politics and agricultural economics.)  They are not self-sufficient in most foods, but they are close enough to survive without any starvation should there be a drop in imports.  Also, they have the capital and productive capacity to be one of the first in line when food gets shipped out of anywhere, shoving the poorer nations to the back. I would expect the Vietnamese government to loot their own farmers to sell to cash(gold?)-carrying Japanese before I would Japanese to starve. I'm not sure what kind of unwind in trade you are expecting but anything short of nuclear holocaust would see Japan subsisting better than most.

    This is one reason Japan has vociforously declined mass immigration.  Their bureaucracy has realized for a while,I suspect, what is coming and sees the depopulation as a perverse boon. Only an idiot, Gordon Brown, and all Western economists, think unending growth is possible.  Because they were first through the "Lost Decade" wringer, Japan has had a while to reflect on what lies in store and with their population back to WWII levels by 2050-60, they will have sufficient food to meet their need.

    Japan is, and has been since the Meiji Restoration, a trading country - playing partners off one another to gain a competitive advantage and beat both of them. In short, that haven't needed resources - they've needed friends to become and stay a first-rate industrial power. This is where they misstepped in WWII.Chose the wrong friends.  They didn't make that mistake in WWI and they didn't make that mistake in the Cold War.  At this point they are playing the waiting game to see whether the US will pull through or whether they had better throw in with China.  

    Since I have the floor, I would also like to point out that stereotypes of Japan being an overcrowded country are kinda crazy.  Yes, they have massive megolopoli, but outside of those the other 80% of the country is practically empty (even the part that isn't jagged peaks.)  There is an incredible amount of land that is fallow because the bureaucracy will not allow former ag land, whose owners have died, to be converted into developed land...so the cities get higher and more populated, more land goes out of production and goes fallow, and Japan's innate ability to become more agriculturally productive remains the same. I can't say the same for the parking lots of the once great Central Valley of CA or the dwindling Oglala Aquifer in the Midwest...THOSE places will be "completely fucked," as you so delicately put it. (Sorry for the block of text...but he asked a good question!)

    Thu, 05/12/2011 - 07:27 | 1266954 Dapper Dan
    Dapper Dan's picture

    Thank you Tepid, take to floor any time. 

    A friend of mine who traveled Japan in early 2000 comented on the absence of slums. Clean and efficient was the order of the day.

    To add:  The lack of riots and looting in the aftermath of EQ/Tsunami is not lost on you.

    Thu, 05/12/2011 - 12:48 | 1268271 Peak Everything
    Peak Everything's picture

    Thank you for the superb insights.

    I have visited Japan several times and I admire their culture very much. I just have never understood why their population grew so large.

    With regard to Japan's sustainability my comments came from a study on the human footprint by Bill Reas et al. They looked at the acres of land per person required to support a lifestyle and Japan I believe is the country with the highest dependence on other people's acres.

    With regard to my belief that the global food trade will unwind,  I think this is a certainty due to the nasty convergence of declining net energy and climate change on food production productivity.

     

    Thu, 05/12/2011 - 17:52 | 1269753 Vlad Tepid
    Vlad Tepid's picture

    Glad I could contribute.  The problem with looking only at acres per person is that it does not incorporate a totality of information.  It can be a useful general framewor, but is misleading when applied to Japan.  My studies of comparative agriculture have shown that acreage is less important than reliable access to water (rain, spring, and melt), and Japan has a very regular source of all three.  I would agree that Japan's population is larger than it "should" be but so is much of the world - many sustainablilty models show that the Earth can only comfortably sustain a billion people.  Japan is not invulnerable to food shortage but they have an out-sized effect on procurement.  I guess a similar parallel would be looking at how small, resource poor nations like Portugal and Holland were able to amass giant empires.

    As for declining net energy, that is a given and will be Japan's greatest challenge.  That is one reason why they have not given up on nuclear power despite all the obvious pitfalls and they continue to be a world leader in renewable energy tech and energy conservation.  Climate change is a mixed bag.  I suspect that Arctic nations like Canada, Russia and the US would love to have easy access to the Arctic oilfields and Northwest Passage (is it still called that?) despite the fact that it will destroy other areas of the world (Bangladesh, Mekong watershed, Sierra Nevada snowpack, etc).  Similarly I have actually hear musings that a warmer northern hemisphere will extend the growing season in Hokkaido, Japan's largest agricultural region, and could well off-set and loss of food suppliers externally. 

    All that having been said, Japan's (and the world's?) largest food related problem is the imminent collapse of most of the ocean's fisheries.  There's no work-around here.  Peak everything means peak fisheries exploitation as I'm sure you know.  This is what I would keep my eye on. 

    Thu, 05/12/2011 - 23:33 | 1270704 Peak Everything
    Peak Everything's picture

    As you point out there is much to admire about Japan. In addition to their agricultural practices their energy and material efficiency seemed very impressive to me when I visited Japan.

    With regard to climate change, I fear based on my reading of the science, that it is likely to  be very bad for everyone, although some may have it less bad provided they are not overwhelmed with climate refugees.

    Japan, I believe, was the only country that took their Kyoto CO2 targets seriously and made a heroic effort to achieve them. Nevertheless, they missed their target and their CO2 went up instead of down like every other signatory to the agreement. This highlights the severity of the predicament we face. Despite what many idiot greens claim, it will be impossible to reduce CO2 levels without a large reduction in material wealth. It is therefore likely that nothing will be done to address climate change unless the economy permanently crashes. Which means, either way, that our kids and grandkids are going to have a pretty crappy life.

    I hope you are right that Japan does not give up on nuclear. I thought ZH reported a few days ago that Japan was dropping all future nuclear investment in favor of renewables. Despite its many problems, nuclear is our only hope if we wish to maintain some form of industrial society. It's unfortunate that Japan kept old and poor designs in service as long as they have. The fact that they have may be a hint that nuclear is now too expensive for us to adopt given that we waited until fossil net energy began dropping and our debt got out of control as a result.

    Thu, 05/12/2011 - 02:39 | 1266762 Yen Cross
    Yen Cross's picture

    NUMBERS Do o rards uderstan chars? Learn to read charts!

    Thu, 05/12/2011 - 02:41 | 1266768 FoieGras
    FoieGras's picture

    Hyperinflation in Japan prediction #96...yawn

    Thu, 05/12/2011 - 03:05 | 1266783 Yen Cross
    Yen Cross's picture

    The short term double top in usd/jpy is just the precurser of a buy dip@ 80.50. A trendline runs at the 7976 level. I see your points traders. Kampo is gassing out. Lots of massive surplus.

    Thu, 05/12/2011 - 07:40 | 1266976 Orly
    Orly's picture

    I have it @~79.130.

    :D

    Thu, 05/12/2011 - 03:07 | 1266793 pitz
    pitz's picture

    Hyperinflation or not, at least Japan has the SUKI (tm) RELIGION, The New World Religion (tm).

    Thu, 05/12/2011 - 03:34 | 1266810 Sukumvir
    Sukumvir's picture

    It is still early days...but I am seeing some tactical moves within Japanese Industry  towards shutting down capacity in Japan and offshoring activities formerly conducted in japan. Staff is being invited to move offshore at lower salaries even after factoring in expatriate packages. Some within the lower salary scale may wind up having top pay for their own plane ticket and housing expenses.

    That to me is a de-facto devaluation that could take place over the course of two decades.

     

     

    Thu, 05/12/2011 - 03:46 | 1266823 Yen Cross
    Yen Cross's picture

    Best wishes all. Work time.

    Thu, 05/12/2011 - 04:33 | 1266852 slvrizgold
    slvrizgold's picture

    How will 1/4th of the country dying of cancer in the next 5 years affect the Yen?  Does Japan have an estate tax LOL?

    Thu, 05/12/2011 - 05:09 | 1266872 Vlad Tepid
    Vlad Tepid's picture

    Yeah, because that's definitely going to happen.  35 million people are going to succumb to radiation-induced cancer in 5 years.  Please contribute something of merit or go "LOL" your troll-ass back to the Yahoo! News forum.

    Thu, 05/12/2011 - 06:06 | 1266903 Urban Redneck
    Urban Redneck's picture

    Japan has one of the highest per capita smoking rates in the world.  They do not have a lung cancer rate to match.  Unfortunately, the PhD toting troglodytes in the scientific community will probably use one of the greatest unfortunate laboratories of modern times to merely seek more public dollars to develop new private pills to treat cancer, instead of better understanding the disease and advancing successful preventions and cures.  

    Thu, 05/12/2011 - 05:18 | 1266876 sbenard
    sbenard's picture

    I'm much more concerned about the coming American hyperinflation, and its accompanying hyperinflationary depression. Someday, we must account for our monetary mayhem. We can not defy the laws of sound economics forever!

    Thu, 05/12/2011 - 06:11 | 1266902 DeltaDawn
    DeltaDawn's picture

    Is the Japanese gov't unloading treasuries?

    Thu, 05/12/2011 - 06:42 | 1266908 The Daoist
    The Daoist's picture

    Whatever they say about Fukushima No. 1, the fact is here in Tokyo the background radiation in the air has fallen to a level well below anything post March 11. My gamma detector measured 4.5 microsieverts accumulated over 8 hours outside my apartment about ten days after March 11. Today it measured only 1.41 microsieverts over 9 hours outside. And furthermore, the ambient radiation level in Beijing is far higher than Tokyo because of all the unfiltered coal burning. But - and would someone pass this on to Hillary Clinton - measuring radiation in China is illegal. Yes, it's illegal. Why? Because ambient radiation level information is a state secret in China. However rough things get here in Japan, we should thank God every day we don't live in China.

    Thu, 05/12/2011 - 15:20 | 1266917 Mr Lennon Hendrix
    Mr Lennon Hendrix's picture

    ///.

    Thu, 05/12/2011 - 08:15 | 1267059 ZombieHuntclub
    ZombieHuntclub's picture

    There is hope! Canada can become more than America's hat!

    I hope the Canucks are more receiving to us than the American Indians were when we come calling.

    We're here from the crap hole to the south...and we're here to help!

    Thu, 05/12/2011 - 10:03 | 1267501 a1sinclair@aol.com
    a1sinclair@aol.com's picture

    It is the holding of JGB's that is the risk and while inflation is a risk, it is the fact that they are running out of buyers that mandates a drop in value.  Their retirement fund (a former large buyer of JGB's) is expected to liquidate $78 billion of JGB's this year.  The savings rate is declining and approaching zero.  A couple of the other large buyers are also now sellers as more and more Japanese people need money for retirement.  Keep in mind that it is the old people that generally have the money/bank deposits.  We all know the demographics and this is a dead end road.  Their only hope would be to intervene and sell yen continually until they can export more and move people out of government into private enterprise, manufacturing, etc.  It is evident the government will not be able to pay the promised benefits nor guarantee the bank deposits.  The wealth of the Japanese people is at risk.

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