Guest Post: Japan's Patriotic War Agenda

Tyler Durden's picture

Authored by Andrew McKillop,

The Sickly Giant
Japan has the the world's third-biggest economy and was only recently pushed into this third place by China - but it remains world No 1, and by far, as measured by its sovereign debt-to-GNP ratio. Its new Liberal Democratic Party-LDP government, no different from LDP governments which have almost exclusively ruled since 1955, is setting out with a proud (in fact desperate) task: to end deflation by pushing down the world value of the JPY (yen) to a theoretical point where "inflation of 2% or 3% a year" will be possible.

The return of inflation, in official Japanese liberal newspeak, will make the economy less sickly even if the strategy "has risks". One of these is war with China, if only as a (Japanese) crowd pleaser, and another is selling off Japan's over-one-trillion dollar holding of US Federal debt at exactly the right psychological moment to implode the US economy, already teetering on the brink of its fiscal cliff.

The sickly Japanese economy can look quite healthy on cursory first glance. Probing deeper shows it is much, much worse than most Japanese either know or non-Japanese want to know. One reason that "nobody wants to know" is because Japan is the world leader in Neoliberal economic decline, having run the gamut of New Economy fads and foibles over more than 20 years. It has blown them up one by one, and slumped ever further into permanent and probably terminal decline. To be sure, firebrand Free Marketeers will contest this picture, saying that Japan is an entitlement strangled, over-developed monoculture with indelible cultural barriers to "the open economy" that however in no way prevent the country technologically innovating at a rapid pace, and having much more than a random selection of thriving world-class multinationals.

Debt And Deficit
25% of Japan's annual state and local government budgets go to servicing debt. Interestingly enough, the very first stock market scams - France's Mississippi Company scam of 1719-1721 and its 'sister scam" in England, the South Sea Bubble - were driven by greedy and incompetent monarchs (the 18th century equivalent of Big Brother government) running up massive debts. Scraping around for a quick fix, the "finance sector professionals" advising the greedy monarchs soon hit on cranking up an asset scam, Facebook or Apple-style, and siphoning quick and fraudulent profits from this to the monarchs. After a short while, of course, the scam went 'Madoff the wall'. The asset mountain imploded leaving nothing but paper promises, popular rage, and more debt.

Japan can in no way be criticized for being ahead of the Neoliberal pack in running up its sovereign debt to delirious extremes and, much later on, panicking about it. This is what Neoliberal Freedom is all about - called "laisser faire"!

The incoming, recycled LDP stalwart Shinzo Abe – once again destined to be Japan’s prime minister by Japan's No Alternative political machine – lost no time in undertaking to flood the economy with money until inflation reaches at least 2%. The critical point is that Japan is the country where deflation has been a "permanent" fixture, a spinoff from its permanent decline and despite its incredible debt and now impressively huge trade deficits, and a list of other no-no things for the trader fraternity hunched over their playstation consoles. Apparently, Abe and his LDP Old Guard imagine that "gaijin", including the Chinese, are awed by the risks this sets for the world economy and will not react.

Foreigners will not show disrespect to Japanese bonds, but will obediently hold them. They will also, in very orderly fashion, only moderately sell off the JPY, by exactly the amount needed to get the magic 2.5%-a-year inflation rate that Japan's new (in fact old) bosses pine for. Japan is by definition “too big to fail” – but unfortunately Japan's liberal and neoliberal Apprentice Sorcerors are dreaming.

Nationalism Rising
For outsiders, whether we call them gaijin, Martians or Wall Street Journal editorialists, Japan seems to be struck by a strange curse. It’s population is shrinking rather fast, surviving Japanese are therefore rapidly ageing, consumer attitudes and behaviour go from bad to worse - Japanese will not consume - Japanese savings are "ridiculously" high with bank deposits bringing 0% per year interest, taxes are high, the country makes only the faintest attempt to attract talent, ideas or products and services from the rest of the world. Its agriculture is a nightmare of low productivity and high subsidies, its uncompetitive rural industries are cosseted by the government to the point of absurdity. Its reaction to the Fukushima disaster - abandoning nuclear power - appeared 'unrealistic' to some, and its theatrical bellicosity in response to China's theatrical bellicosity over the disputed South China Sea islands (Senkakus in Nippon-go, not in Chinese) seems unrealistic to most and outright dangerous to most.

Gaijin criticism of Japan however faces all kinds of problems: Japan has solved the conundrum of "progress without growth", but this has made Japan "unadapted" or out of synch with the present real world and what at present is the only slowly dissolving and dispersing global economy. The Senkakus issue is of course "only symbolic" but the problem is that War and Circuses are a liberal trick dating back almost as far as the Mississippi Co. crash, if not further.

For Marie Antoinette and her quack doctor Francois Quesnay (called "a founding father of liberal economics"), Bread and Circuses seemed the right way to fool the crowd at the gates of the Bastille but in her case this was a fatal error: she literally lost her head, by guillotine, not so much later on. War and Circuses can be called the hard-edged, stout-lipped ultimate and final version of liberal mindwarp, to be used only after the economy has been sucked dry by bottom feeders and imploded by liberal burger-nothings spouting idiot-friendly one-liners.

Today's Japan, after too many decades of New Economy fooling around, has the government we might expect or fear. Shinzo Abe's LDP has a sure and certain ally in parliament in the shape of the far-right Japan Restoration Party (JRP), led by Japan’s 80-year-old version of Dick Cheney, Ishihara Shintaro. His plan for the disputed islands is for Tokyo's city government to purchase them from their private Japanese owner, and station “civil servants” on them, which is Japanese coded language for Japanese SDF, Self Defence Force, personnel. Even "SDF" now has special meanings, because Japan's "self-defence" navy now boasts roughly four times more major battle-class ships than Britain's Royal Navy. Placing these "civil servants" on the disputed islands can only draw one possible reaction from China, which in absolutely no way would allow this provocation to slide.

Nuclear Wipeout
Japan can be called the nation that even if it did not go the fastest, certainly went the furthest with nuclear power, that is so-called "civil" nuclear power.

Japanese in March 2011 were able to witness the simultanous meltdown of at least 3 (possibly 4) reactors on primetime TV, along with hundreds of millions of non-Japanese. Probable cost - to the state of course, not Tepco the owner and operator of the reactors - of clean up and economic recovery operations will probably be more than $500 billion, even if this is peanuts compared with Japanese sovereign debt! Much more important and proving again, if needed, that "civil" uranium fuelled reactors are only good for making nuclear weapons and generating expensive electricity, the JRP regularly crows that Japan is a "single screwdriver turn" from nuclear weapons capability and can at any time start production at an initial rate of four Hiroshima-equivalent weapons-per-week. In total, the JRP goes on to boast, Japan can have fully functional nuclear weapons in at most two months from getting the green light - from Shinzo Abe's governing party.

The US 'Foreign Policy' magazine, described as "administration friendly", suggests that the lure for Japan to go nuclear, despite Hiroshima and Nagasaki, despite Fukushima, may be too tempting for its current War and Circuses, career liberal politicians with retrograde and spurious nationalist credentials. 'Foreign Policy' goes on to imply that the White House, if not Americans at large would appreciate this – because it would tend to neutralises the Chinese nuclear threat in the region, and "reset the game" of regional geopolitics at a highly belligerent zero.

Japan's endgame flirt with Neoliberal mindwarp, what we can call the "slogan based economy", has brought about a situation where War and Circuses is surely on the Japanese political agenda, along with Japan's threats to sabotage the global economy. The inventors of kamikaze suicide war now have an Old Guard of political deciders who are prepared to pilot the economy straight into the ground, while bleating about "national pride". After these have-beens have been dumped in the trashcan of History, however, the Japanese nation will really re-emerge and be proud to do it.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Boilermaker's picture

Always look eye!!!

Azannoth's picture

A War between Japan & China would be the single best thing that could happen to the US, a Nuclear War would be even better.

Japan and China are the single biggest holders of US Debt, which would be [cough]vaporized[cough] in an instant should things go bad between them.

A War with Iran is peanuts in comparison, just watch as the US will do it's best to stirr Nationalistic sentiments in Japan.

Slack Jack's picture

"The inventors of kamikaze suicide war..."

The inventors of suicide warfare were actually the English nutcases,... continually charging at a row of dug-in machine guns,... is something soooooo stupid, that only the English could have invented it.

The English elite (Jews etc) couldn't think of a better way to kill more commoners than they did. They must have really hated the commoners.

Sandmann's picture

Learn some history.........

bunnyswanson's picture

Methamphetamine-induced psychosis led to kamikazis.  This drug was used to keep the Japanese soldiers up 24/7.  At least that is what I read.

vato poco's picture

One little-publicized fact about the kamikaze's is that maybe.....just MAYbe....they weren't all that anxious to die for the Emperor. Kazi planes were stripped down: cannibalized, barely-flight-worthy POS's junked by the other services; useful for just one-half of a last flight. (No worries about landing, after all.) No instrumentation, no parachutes, (LOL), no machine guns....just Hajime and the giant fucking bomb in the back seat. There have been assertions made the Kazi pilots had their cockpits welded shut, but who can say.

Then, of course, they were "escorted" to their (final) destination by fully-armed, battle-worthy Zero's....who had orders to shoot down poor Hajime if he chickened out or tried to fly away home. When you look at it that way, that whole "glorious death for Nippon and The Emperor" takes on a slightly different light, don't it. Naturally, these unpleasant facts are not taught in Japanese schools. Most regrettable. Much loss of face would ensue, and everyone knows we can't have THAT!! For extra credit on Japanese 'end game' war strategy, goolge "sinking of the battleship Yamato" sometime. "Operation Ten-go". Send out a battleship with *no air cover* steaming off to Okinawa, a place under complete US air superiority/domination, where the plan was to 'beach the vessel and use its 18" guns in support' of the islands IJA defenders. They never got close: sank by US aircraft some 400 miles from their destination. Total dead - pointlessly, uselessly sacrificed/murdered - around 5000.

As a people, they don't seem to take well to impending defeat, do they. Wonder how the Fukushima end game might play out.

akak's picture

Somewhere on the Princeton campus. the sound of breaking windows and alien invasion pierces the nighttime silence ...

Matt's picture

Nevermind the debt, without economies #2 and #3, America would be once again an unmatched industrial giant.

Notarocketscientist's picture

Duh.... why not just default on the debt - and tell these countries 'you want it - come and get it' (while massaing the launch button)

akak's picture

The most famous US 'Abe' was a kooky nationalist and war criminal too.

"Abe" --- I HATE that name!

vato poco's picture

99% of all Japanese pols deny or, at the very least, soft-pedal WW2-era war crimes. Am willing to bet not one Japaanese student in 500 knows squat about Nanking, or Comfort Women, or the atrocities of The Philippines/Singapore, or Unit 731, etc etc. Hell, the Hiroshima monument could be synopsized to "We were just sort of minding our own business and the barbarian Americans came along & nuked us for no reason at all!"

They'd better think twice about starting up anything military with China. Aside from the sheer numbers, and the fact that China *hates* Japan still for the aforementioned ww2-era atrocities - human medical experimentation; vivisection of civilians; mass rape; breeding and releasing plague-ridden rats (estimated resulting dead: 50K) - aside from all THAT, Japanese youth ain't what it was in the '30's. You're not gonna find too much Yamato/Bushido spirit aming the legions of young men living in their parents house, playing video games & watching porn to the point where they don't even go outside anymore. There's enough of them that a word had to be invented to describe them. IIRC, it's the "Hikikomon". Good luck teaching _those_ guys close-order drill and Banzai charges.

Notarocketscientist's picture

Outstanding post - thanks for reminding the world about this

Mike in GA's picture

Makes the usefulness of nuclear weapons that much more appealing.  Faster result from decision to delivery, no need to train unmotivated 'hikikomon' and - like drone war - much fewer taxpaying citizen/consumers lost.  Till the bombs start coming back atcha, that is.

Good article, interesting points, but;  are we really talking about Japan going nuclear?!

I know we have a Georgetown Constitutional Law professor calling for the abolition of the constitution and a Pravda columnist urging Americans to hold on to their guns and their 2nd Amendment rights but Japan going nuclear?  Is the world really this upside down now?  Ugh.

Sandmann's picture

Obviouslyt they should simply roll over for China then and not expect to defend themselves......the US will do it for them by treaty obligation. Israel should take a leaf out of Japan's book and let the US defend it

Ayn NY's picture

Doesn't Japan have one of the oldest populations in the industrialized world? How many young men could they pry away from video games? Also because of China's one child policy that favored young males, it seems China has an excess of them. This won't turn out well, for anyone...

Banksters's picture

Japan and China have more soft targets than Chris Christie.   See Nuclear reactors.   So in that sense, I strongly disregard any notion of nation state war given that one nuclear melt down could destroy the whole northern hemisphere.

Atomizer's picture

You go Japan.. Good luck in harvesting new tax monies to support BIS debt obligations. Don’t forget to tell the other broke sovereign nations that everyone is giving you a 30% cut to protect your empire.. You gotta hate that social media thing.. LOL


A speech by Murray N. Rothbard. Presented at the Mises Institute's 1984 "Seminar on Money and Government," in Houston, Texas.

LawsofPhysics's picture

Blah blah blah, you need energy and real commodities to actually do anything and history is very clear when it comes to shutting off Japan's supply lines (FYI, go look at the real inflation in Japan), hedge accordingly.

DoChenRollingBearing's picture

I dunno fellas re Japan rising up...  When I was there last May, I got a sense that Japan had more or less given up.  I did not energy in the people (even their kids have quit studying hard).  Their population IS aging, yet they bring in few immigrants to work.

Maybe it's just me or the VERY limited amount I saw while there just a few days.  But, what I saw in May was not the same kind of electric atmosphere I saw on my only other visit to Japan in 1996.

Freddie's picture

I feel sorry for the Japanese people - what a mess.  Debt to their eyeballs, rapidly aging population, Fukashima, nasty or at least unfriendly neighbors who they have been fighting with for thousands of years.   I get the sense that it is close to being over.   Maybe they can try to strike a mutual defense pact with S Korea but they pretty much hate each other.  SK views Japan as a bigger threat than NK and always has.  

Matt's picture

Yeah, they really failed hard in the past. They really need to up their space program, only place left to expand and exploit.

Notarocketscientist's picture

Maybe this is karmic payback for when the Japanese performed experiments on live chinese subjects during WW2?

Fuck Japan - China does not forget - and you can be sure the Chinese are going to make these fuckers pay at some point.

And they don't forget that massive loss of face that the British imposed on them... they are biding their time before extracting revenge

bank guy in Brussels's picture

Interesting at the moment, is that there really is a new economic approach about to be tried in Japan and perhaps then in all the Western economies

Ambrose Evans-Pritchard is quite ahead of the pack in covering this

Not Keynesianism fiscal spending and more government debt, and not merely 'QE', but the radical, really not-yet-tried, hard-core Monetarist programme of targeting 'NGDP' - Nominal GDP

Despite the fame of Milton Friedman, there are relatively few serious 'monetarists' out there, but it is possible that post-Friedman monetarists may be more right and clever than anyone. We are about to see a grand experiment, as the world's countries, led by Japan, start implementing some of these monetarist ideas on a serious level.

Milton Friedman is identified with unrestrained, brutal US-managed 'shock capitalism', and Friedman did partly sell himself out to the CIA and US government boyz, but his ideas are actually a little different.

Friedman himself, tho he thought government hand-outs tended to corruption, still quite favoured giving spending funds to the lower classes, he tried to think of how to do it less wastefully. Like his 'Negative Income Tax' with minimal bureaucracy.

But aside from that, the hard-core 'monetarist' theory is more neutral and technical. The idea is that in this kind of big economic mess, you need to carefully control 'money supply', not too high or too low, whereas countries make both mistakes. They go Argentina or Zimbabwe, too much inflation from money-printing, or they do too little, like the Western world right now, losing trillions in money supply due to credit contraction, while 'QE' programmes, tho also printing in trillions, do not make enough dent in that, partly because of quantity, but also because they give the QE to big bankers and not to small business or people.

The difficulty for monetarism, is what is 'money', as most of 'money supply' is actually forms of 'credit' or lending, not just cash or deposits. The finer points get argued on that level, but there is some sense this needs to be handled as The Best Way.

It is possible the monetarists are correct. For the current big global crisis, the hard-core 'NGDP' monetarists say the key tactic is to maintain 'money supply' (thus including relevant credit) in order to goose nominal GDP to a level just slightly above the prevailing interest rate.

So you have 1% interest rates now in the big central bank countries, you therefore goose the system to keep *nominal* (obviously not real) GDP at about 3%. NGDP - Nominal GDP - the magic ticket here.

The argument is that this provides the 'right' amount of inflation to deal with the debt overhang, it sparks the economy going, and lets everything rather adjust out of the crisis period and leads to positive growth. It is obviously an art to do this well, but the monetarists say this is THE answer, and some aspects of economic history support this, tho people have fallen into the answer accidentally instead of consciously.

Like how in the 1930s the countries that left the gold standard (Britain, Nazi Germany) did much better than the countries that stuck with gold (France, USA) ... similar to how today countries make their people suffer by sticking to a euro they do not control. A subtle argument that free gold is better than government-ordered gold standards.

The NGDP monetarist theory also emphasises how the euro-zone policy is pure disastrous error. Southern European countries trapped in the euro cannot goose their own money supply, and thus are condemned to economic self-impoverishment, even when, like Italy, they are intrinsically rich with an intrinsically powerful export economy. Obsessive Germans are willing to destroy 10 other countries to avoid giving themselves a bit more inflation, not realising they will ruin themselves as well in the longer run.

Ambrose Evans-Pritchard's latest on this

'Stocks to soar as world money catches fire, Calvinist Europe left behind'

LawsofPhysics's picture

What a load of horseshit. The underlying destruction of trust is the only issue that matters. Nothing changes until trust is restored and fraud has been prosecuted. So, long black markets and any asset of real value that can't be stolen or devalued by paperpushering fuckwads. Fine with me.

economics9698's picture


FDR devalued the dollar to gold 69%, defaulted on Liberty Bonds and the economy still sucked.


CPL's picture

Let's hope that's not the script.  You know what came after that.

AgAu_man's picture

LoP, glad to see you back after your Xmass holidays.  Always good for nailing it on the head.

lewy14's picture

What a load of horseshit.

It may be horshit, but bgiB and AEP are correct in pointing out that it is, nonetheless, current policy.

snowlywhite's picture

I don't know why trying to balance the money supply so you don't fall either in hyperinflation or in sharp deflation always seemed to me the equivalent of me driving at 300km/h a F1 bolid(while not even having a driving licence). The chances you don't crash are 0...


There are 2 simple problems:

- our economic cycle was always based on boom/bust model where we didn't destroy everything gained in the boom phase during the bust. But bust means war. And we can't have war anymore; that's why Bass will keep looking at his peace time debt levels chart and wonder another 100 years how it's possible...

The model doesn't work anymore. Either come up with a new model, or... wank around for decades while losing much more in the bust phase than was gained in the boom. Having an obsolete system always helped; not.

- productivity is too high; either reduce hours worked/day drastically or accept high unemployment rates and redistribution. The problem with reducing work time is, like in free floating currencies, that there's always an idiot country who think they're smarter and try to game the system...


and none of the two problems can be solved with monetary policy..

DonutBoy's picture

To give credit where due - Jim Rickards has been calling out NGDP targeting as the next step in QE for some years.  Not to say I don't read everything AEP writes.

In Japan - NGDP targeting with a declining working population and now a net importer - it's hard to imagine how that can happen without currency devaluation at a rate equal to the sum of: 1) target NGDP rate; 2) the rate of decline in nominal income earned due to a shrinking workforce, 3)  the rate of increase in nominal spending for imports, and 4) the rate of increase in nominal savings. Productivity growth seems unlikely post-Fukushima.

That seems to be a death spiral, there's a posistive feedback loop from currency devaluation to nominal spending on imports.  They will be dis-saving soon, spending more than they earn, which may enable it.  The retirees empty their accounts at the grocery store.  

It seems fantastic that they are still purchasing treasuries while they are showing music videos on the MOF web-site trying to encourage the sale of their own debt.

I don't think Japan will go nuclear - I think they'll have a conventional dust-up with China to rally the tribe to sacrifice their saved wealth.  Of course, once that kind of thing starts there's no predicting where it ends.

I'm short the yen - like everyone else - which scares me a lot.  I hate being in the pack becaue I feel like I'm headed for slaughter - but there's nothing else to do.  They have to crush the yen.

falak pema's picture

well at least he sticks his neck out like a man on the the guillotine block; we'll see if AEP is Sydney Carton or the Scarlet Pimpernel  when he predicts fiat printing of FED beating out the perceived death wish of autocratic Europe and its austerity guilotine! 

Mike in GA's picture

There has never been nor can there ever be a central bank or any other central authority that can accurately maintain such a perfect, proper ratio between interest rates and money supply such that GDP stays at a "level just slightly above the prevailing interest rate". 

Aye Cap'n, I can givver a wee bit moar.

"The argument is that this provides the 'right' amount of inflation to deal with the debt overhang, it sparks the economy going, and lets everything rather adjust out of the crisis period and leads to positive growth. It is obviously an art to do this well..."

And we all know what an art economics is.  Artiste Bernanke.  Not to mention we can all agree on the 'right' amount of inflation, yes?

"it is possible that post-Friedman monetarists may be more right and clever than anyone."

Ahh, yes, we are so much smarter now so of course It's Different This Time.  Gimme a break.

We are all screwed now because fedgov thinks they can and should do everything when their best effect would be to back off and get out of the way of free people.  Too late. 

You know, the pisser about this is when the whole thing blows sky high, the ones that are responsible for the policies that led to the failure will be the very ones clamoring to put the system back together.


Ayn NY's picture

Professor G, is that you? I thought I wouldn't have to listen to this horse crap after the semester ended and now you follow me here?

The gold standard was not the cause of the worsening of the depression in the US - you can't cherry pick that and ignore ALL the other factors such as massive federal spending, taxation, and debilitating regulations on businesses. Oh and did you forget about the founding of the Federal Reserve in 1913 - I suppose that had nothing to do with anything.

Atomizer's picture

Christian Noyer: Monetary policy – how to cope with the current financial crisis?

americanspirit's picture

Does anyone seriously think that Japan does NOT already have an arsenal of nuclear weapons and the means to deliver them? Really?

KingTut's picture

Thank you!

They say it themselves: 2 weeks to nuclear capability.  That means the designs are finished and known to work (US designs perhaps?)  Or perhaps they designed them, and we tested them here (Nevada) pretending they were "US"  tests?  That also means the parts have been manufactured, and the Uranium has been enriched to wepaons grade and proabaly shaped into weapon components .  Can't do all that in 2 weeks!

This would have happened to placate Japanese leaders who were getting worried about the rise of China, and the inevitable confrontation.


Matt's picture

Uranium enrichment is time-consuming and unneccesary when you have plutonium. We know they have plutonium, because we know they used Mox fuel at Fukushima.

helping_friendly_book's picture

We also know because the censors let slip: Plutonium found in groundwater.

If the Japs were storing plutonium they are building bombs.

The Chinese would kill every last Japanese on the planet, including the ones outside of Japan, it they dare do such a dastardly act.

Matt's picture

Just like how the Chinese wiped out North Korea and Iran for building nuclear bombs? WTF are you talking about?

Nage42's picture

Ah, but the MOX was supplied to them by the French manufacturer... presumably because Japan doesn't have the tek'mology to do it themselves (plausable deniability about Plut capabilities?).

Hopefully a watchdog nation out there with the right Satelite in-place would be able to tell "where did all the fuel rods go," cause if they've gone to some secret-underground enrichment facility then that would be more reassuring than "the pressure explosion just scattered them into the wind."


*sigh*  What a clusterfsck.




flattrader's picture

Japan delivered a nuke [actually three of them] to themselves.

It's as deadly as if they had engaged in an exchange, but since it is slow motion, they hardly notice...untill they do.

Just a matter of time before people, children in particular, become seriously ill and start dropping dead...cancers take a while.

CPL's picture


Way ahead of you.  To read bad news today about where you live you must look outside your borders.

knukles's picture

Not gonna happen.

Because loud sabre rattling, defense industry build up accompanied by a fervent patriotic surge is good for Increased Control by the Reptilian Overlords.

(Here's "one big eye" lookin at you, kid)

karzai_luver's picture

ahhhhhhhhh, The Homeland scenerio.......USA USA USA USA!!!!!!!!!!!!!


Osama laughs -- who won that war again, o yeah i forget sometimes.



Cojock's picture

There is nothing whatever any Central Bank can do to generate inflation at the zero bound. Inflation targeting, employment targeting, and GDP targeting are all completely useless, and Central Banks right now as as much use as a chocolate teapot.

Modern fiat money is a tax credit created openly by Central Banks as fiscal agent of their Treasury, and by private banks (opaquely) as sub fiscal agents.

So the only economic solutions are fiscal.

The Zimbabwe etc etc hyperinflations trotted out by some were caused by fiscal not monetary mismanagement, such as the destruction of the productive base underpinning taxes, or the assumption of debt obligations in foreign currencies.

Printing money is the effect of hyperinflation not the cause, although try telling that to anyone who DEFINES inflation as an increase in money supply.

TrustWho's picture

Printing money is the reaction to deflation. Deflation occurs because people renege on financial promises. One's liabilities is someone's assets. Central banks (monetary policy) or central authorities (fiscal policy) try to stop the liability fall from shrinking the asset collapse, but they always fail. They fail because nobody knows who they can trust because the state's credibility is lost. At some point in time, the state's money becomes worthless and now you have HYPERINFLATION.

Hyperinflation is the last phase of a once great state. 

lolmao500's picture


Chinese ships begin patrolling disputed South China Sea areas

China's marine surveillance ships today began patrolling the disputed South China Sea, implementing a controversial order to border police to board and search ships entering disputed areas which Beijing considers its territorial waters.

Three Chinese government ships on Monday entered territorial waters around East China Sea islands at the centre of a dispute with Tokyo, Japan's coastguard said.

One of the surveillance ships entered waters around the islands known as Senkaku in Japan and Diaoyu in China at around 1:32pm (0432 GMT), while another followed about 20 minutes later, the coastguard said.

The third vessel entered the waters around the islands, controlled by Tokyo but claimed by Beijing, at about 2:35 pm (0535 GMT), it said.

The ships were spotted by coastguard aircraft which were patrolling the region, and were later ordered by a Japanese patrol vessel to leave the area, the coastguard said.

In response, the third Chinese vessel reiterated Beijing's claim.

"The ship responded in Chinese by saying in essence that Diaoyu and related islands are an inherent part of Chinese territory," a Japanese coastguard spokesman told AFP.

The three ships were still inside what Japan claims as its territorial waters as of 3:50 pm (0650 GMT), the Japanese coastguard said.

China has transferred two destroyers and nine other ex-navy vessels to its maritime surveillance fleet, reports said on Monday, as it moves to beef up its position in bitter territorial rows with Japan and other neighbours.

Beijing renovated the ships and transferred them to surveillance operations to "alleviate the insufficiency of vessels used to protect maritime interests", said a report on Tencent, one of China's major news portals.

apberusdisvet's picture

I wonder when China is going to get significantly pissed over the fukushima radiation hitting its mainland?