Liberal Democratic Party
Even the escalating cold war (as in European winter cold) between Russia and the west will pale by comparison to what may happen in the far east, if the pent up for generations tensions between China and Japan, which have historically hardly been in a state of "amicable relations", finally spill over into an all out war. Which, incidentally, is precisely what a majority, or 53% of Chinese respondents, and some 29% of their Japanese peers, expect will happen in the coming years.
Following Russia’s historic $400 billion natural gas supply deal with China last week, Japanese lawmakers are looking to revive efforts to tap into Russian natural gas supplies themselves.
A few weeks ago, when the US announced the first set of sanctions against Russia, we jokingly commented that among the possible retaliations would be a Russian explusion of that global US permastaple, McDonalds. As it turns out, yet another "joke" may be on its way to becoming the truth.
Russian Politician Suggests Dividing Ukraine Along Lines Of Nazi-Soviet Pact, Proposes West Ukraine ReferendumSubmitted by Tyler Durden on 03/24/2014 12:23 -0400
It has been a while since well-known Russian nationalist and spotlight-grabbing politician, Vladimir Zhirinovsky, made headlines. The recent flame up of Cold War 2.0 is precisely the cover the flamboyant individual needed to reemerge once more, scandalous as ever. Because while the west scrambles to find a way to punish Russia for openly flaunting its relentless hollow threats by annexing Crimea, Zhirinovsky is back and has a "modest proposal" for Ukraine, and the countries neighboring the troubled former USSR territory: namely dividing the country along the lines of an infamous Nazi-Soviet pact, suggesting that regions in Western Ukraine hold referendums on breaking away from Kiev. In a letter sent to the governments of Poland, Romania and Hungary, Vladimir Zhirinovsky also suggested those countries hold referendums on incorporating the regions into their territory. The question is whether Zhirinovsky, who traditionally has been just a bit of a loose cannon yet whose nationalist Liberal Democratic party largely backs President Vladimir Putin in the Russian parliament,speaks only for himself, or whether Putin is using him the way the Fed uses Hilsenrath.
Japan's PM Shinzo Abe has seen his approval ratings collapse for the first time since his 'devalue-to-glory' strategy was unveiled a year ago. Kyodo News reported, support for Mr. Abe fell 10.3ppt to 47.6%, while Japan News Network reported a 13.9-point fall to 54.6% as WSJ reports, public concern over the controversial secrecy bill (designed by Kafka, inspired by Hitler) and its nationalist overtones merely exacerbated Japanese people's concerns about their pocketbooks (as incomes stagnate and costs rise). As Abe plays lip service to economic issues (with a very Maduro-like speech recently on profit margins and wage increases), there is little but public outrage to hinder his plans as his ruling Liberal Democratic Party has big majorities in both houses of parliament, with no election scheduled until 2016. So much for Abenomics...
As might be expected as political and economic policy failures pile up and citizens become increasingly mad, the status quo is becoming increasingly authoritarian. In the latest disturbing news from a desperate power structure, the conservative government in Spain has passed an Orwellian bill titled the Citizens’ Security Law, which allows for fines of up to 600,000 euros ($816,000) for “unauthorized” street protests, and a 30,000 fine for merely having signs with “offensive” slogans against Spain or for wearing a mask. This law is a perfect example of the increasing neo-feudalism being implemented across the globe by a corrupt, decadent and depraved status quo.
A hungover America slowly wakes up from a day of society-mandated consumption and purchasing excess to engage in even more Fed-mandated excess in the equity markets. The only difference is that while the "90%" was engaged in the former and depleting their equity, and savings, accounts in the process, far less than 10% will be doing the latter. Overnight attention was drawn to the rapidly escalating territorial dispute between China and Japan, now in the air, Bitcoin's brief surge above the price of an ounce of gold, and the ejection of the Holland from the AAA Eurozone club (where only Germany and Finland remain), following an S&P downgrade of the Netherlands from AAA to AA+, which however had been largely priced in long ago (and was coupled with an upgrade of Spain from negative to stable outlook, as well as an upgrade of Spain from CCC+ to B-). Europe surprised pleasantly on both the inflation (better than expected) and unemployment rate (dropped from an all time high of 12.2% to 12.1%), even if youth unemployment rose to fresh record highs.
Following the to-ing and fro-ing of the last 2 days with US and Japan "testing" China's new Air Defense Zone (ADIZ), China has not only escalated (as we noted earlier) but as the day begins in Asia is stepping up the rhetoric significantly. Official media said that Japan is the "prime target" and it is an "urgent task for China to further train its air force to make full preparation for potential conflicts." Japanese lawmakers, meanwhile, are pushing for a bill "demanding an immediate withdrawal of China's ADIZ." While the Western world goes on its merry way buying S&P futures, China's concluding message rings its most defint so far, "We are willing to engage in a protracted confrontation with Japan. Our ultimate goal is to beat its willpower and ambition to instigate strategic confrontation against China."
The Failure Of Abenomics In One Chart... When Even The Japanese Press Admits "Easing Is Not Working"Submitted by Tyler Durden on 11/18/2013 14:56 -0400
Today, with the traditional one year delay (we assume they had to give it the benefit of the doubt), the mainstream media once again catches up to what Zero Hedge readers knew over a year ago, and blasts the outright failure that is Abenomics, but not only in the US (with the domestic honor falling to the WSJ), but also domestically, in a truly damning op-ed in the Japan Times. We will let readers peruse the WSJ's "Japan's Banks Find It Hard to Lend Easy Money: Dearth of Borrowers Illustrates Difficulty in Japan's Program to Increase Money Supply" on their own. It summarizes one aspect of what we have been warning about - namely the blocked monetary pipeline, something the US has been fighting with for the past five years, and will continue fighting as long as QE continues simply because the "solution" to the problem, i.e., even more QE, just makes the problem worse. We will however, show the one chart summary which captures all the major failures of the BOJ quite succinctly.
Attracting some attention in Russian media today is proposed legislation by State Duma lawmaker Mikhail Degtyaryov of Vladimir Zhirinovsky's controversial Liberal Democratic Party and former candidate for mayor of Moscow (where he got 2.86% of the vote), who seeks to ban dollar deposits and transactions at Russian banks warning that the U.S. dollar is on the brink of collapse. As Moscow Times reports, "Mikhail Degtyaryov said the dollar will collapse in 2017 if U.S. national debt continues to grow at the current rate, and he cautioned that countries with a high dependence on the currency would suffer an economic disaster... In light of this, the fact that confidence in the dollar is growing among Russian citizens is extremely dangerous," he said in an explanatory note attached to the bill, according to Interfax. But before anyone scrambles to convert all their dollars into crisp rubles, keep in mind this is the same candidate who previously proposed banning gay and bisexual men from donating blood, paid days off for menstruating women, and has said he believes Russia will lead the world in vanquishing the Antichrist.
"Debt matters... even if it is possible to pretend for many years that it doesn't," is the painful truth that, author of "Avoiding The Fall", Michael Pettis offers for the current state of most western economies. Specifically, Pettis points out that Japan never really wrote down all or even most of its investment misallocation of the 1980s and simply rolled it forward in the form of rising government debt. For a long time it was able to service this growing debt burden by keeping interest rates very low as a response to very slow growth and by effectively capitalizing interest payments, but, as Kyle Bass has previously warned, if Abenomics is 'successful', ironically, it will no longer be able to play this game. Unless Japan moves quickly to pay down debt, perhaps by privatizing government assets, Abenomics, in that case, will be derailed by its own success.
If Anything Goes Wrong, the Whole World Could Be Affected For a Long Time
The bailed-out owner of the Fukushima nuke, famous for its lackadaisical handling of the fiasco and its stinginess with the truth, reported earnings. It was a doozie.
The zero-nuclear option has a hugely popular and powerful backer in Shinzo Abe’s own party: former Prime Minister Koizumi
While the world is gripped in yet another great distraction over the great "will he, won't he" start World War III debate, things that are unsustainable remain unsustainable. Such as Japan's debt, and specifically the amount of cash interest that the nation with the 230% debt/GDP (and rising interest rates) will have to pay to service its gargantuan balance sheet. According to a document seen by Reuters, Japan expects to spend a record $257 billion to service its debt during the next fiscal year. The amount to be allocated for debt-servicing for the year that will begin on April 1 is nearly as large as the gross domestic product of Singapore, which the World Bank put at $275 billion at the end of 2012. More disturbing, this is a 14% increase in the debt interest cost in just one year. And yes, it is unsustainable absent an epic inflationary episode to "inflate away the debt", something that Abenomics has so far failed in achieving despite some hopeful early glimmers in crushing the Yen.