Memo To Japan: It Is Going To Be A Cold, Expensive Winter

Tyler Durden's picture


Two weeks ago we showed that while the short-term gains generated by the Japanese stock market are welcome, the impact of Abe's synthetic "wealth effect" is far less than generally accepted for one reason: unlike the US, the financial assets held by the Japanese public in the form of equities are a tiny fraction of the whole pie.

However, while the Nikkei surging was a boost to a small percentage of the Japanese population, the negative offset, the lost purchasing power due to a plunging Yen which is the sole reason for the nominal rise in the stock market, has impacted all equally. And as the January trade deficit data showed, when Japan's trade deficit plunged to a record level despite the arrival of Abe (or perhaps due to: after all, the nationalist regime's territorial squabble with China has been a primary reason why Chinese imports from Japan has imploded), the primary reason for crushing the Yen: unleashing exports (or boosting the current account surplus for that matter), has so far been a complete disaster.

One must also remember that Abenomics' reflation attempt is being enacted at a time when Japan, in the aftermath of Fukushima, has virtually no domestic energy creation left as the entire local nuclear power industry has been mothballed, resulting in a chart showing the Japanese power generated by nuclear looking like this:

Yet one place where Abenomics has worked "miracles", inversely to what was intended, is in the area of energy import prices. As the chart below from Diapason shows, and just as we warned would happen, the price of LNG imports into Japan have just hit all time highs.

Which means one thing: while Abenomics has failed in spurring exports, while the rise in the Nikkei has benefited some 1-2% of the population, the most direct consequence of crushing the yen some 20% is that energy costs, virtually all of them imported, are if not surging, then about to soar to all time highs.

In other words, our sincerest condolences to Japan, for whom this winter will be a very cold one (and a very hot summer follows), unless of course in Japan, like in the US, energy costs don't matter when calculating CPI and inflation and the consumer can spend any amount to keep themelves warm, or cold as the case may be.

Naturally, should inflation accurately reflect that record surge in LNG prices, then Abe's inflation target of 2% has long since been surpassed however without generating any of the required beneficial side effects. All this would mean that central planning has failed once more: who would a thunk it?

And as a final thought experiment corollary: perhaps the reason why Japan has been so belligerent when it comes to the Senkakus/Diaoyu islands is because the administration knows that relinquishing control of the Chunxiao gas field would force the country to revert back to its deflationary path in a world in which it is forced to rely on external, and very rapidly inflating in price, sources of energy.

Now for those who recall their history, is this not simply a replica of the conditions that led to Japan's premeditated, and US-devised, attack on Pearl Harbor (recall the McCollum memo from October 7, 1940)?

Which then begs the question: is Goldman Sachs, in its policy of populating every central bank with its tentacles, and pursuing - without fail - a reflationary policy which leads a wealth effect for the 0.1%, and the kind of general popular outcome that led to Pearl Harbor and the US entrance into World War 2, simply agitating behind the scenes for global war: whether it be between Japan and China, whether it is the Arab Spring of 2011 due to soaring food prices, whether it is the advent of Neo-Nazi powers in Europe due to preserving the EUR-centered status quo, and which inevitably will result in bloody civil conflict?

Because while millions may die, just think of the benefits to global GDP, and to those financially innovative companies that know just how to provide funding in times of global need, should yet another global war break out...

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Sat, 02/23/2013 - 15:01 | 3270052 Oquities
Oquities's picture

george soros makes another billion to change the world with

Sat, 02/23/2013 - 15:18 | 3270076 francis_sawyer
francis_sawyer's picture

Snuggle up along side some Fukushima fuel rods... Howa u say 'rukewahm'...

Sat, 02/23/2013 - 15:55 | 3270128 willwork4food
willwork4food's picture

Or just snuggle up...


Cue WB7!

Sat, 02/23/2013 - 20:53 | 3270602 Edward Fiatski
Edward Fiatski's picture

Wat yu also liek the smell of Sakura in the haeze of radioaktive clouds? How butiful is Spring here: three-eye birds signing, yello water flowing, geiger counters going klik-klik - like a hart beat. There's buty in deff.

Sat, 02/23/2013 - 23:53 | 3270948 ClassicalLib17
ClassicalLib17's picture

Beautifully poetic.  +1 fiatski

Sun, 02/24/2013 - 01:55 | 3271065 Buck Johnson
Buck Johnson's picture

Many of the central banks know that the only thing that can clean the slate without them losing money is to have a another world war. 

Sat, 02/23/2013 - 15:07 | 3270057 suteibu
suteibu's picture

The sad part is that, while many in Japan are angry about what is happening, they are too well-conditioned to accept government dictate to make much of a fuss about it.  Remember, this is a nation where the government declares the start date of summer fashion for workers as part of its "Cool Biz" program.

Sat, 02/23/2013 - 15:08 | 3270060 world_debt_slave
world_debt_slave's picture

yep, spent some time in Japan, it does get cold and hot there on the mainland.

Sat, 02/23/2013 - 15:10 | 3270064 Motorhead
Motorhead's picture

And if the Japanese really piss off the Chinese, it's gonna be more than a cold, expensive winter.

Sat, 02/23/2013 - 15:43 | 3270111 Mr. Hudson
Mr. Hudson's picture

True, but there will first be a brief period of intense heat.

Sat, 02/23/2013 - 16:34 | 3270208 Not Too Important
Not Too Important's picture

No, they'll just wait. No reason to spend the money. Five years from now - or less - Japan will be a nuclear wasteland with nothing but mutants left. No workforce, no military, no economy.

Soros and Bass know how to make a buck. Shooting fish in a barrel.

Sat, 02/23/2013 - 17:47 | 3270335 The Heart
The Heart's picture


"Five years from now - or less - Japan will be a nuclear wasteland with nothing but mutants left."

That pretty much also goes for all of the USA.

People have no idea how bad things really are as far as radioactive contamination in the US is concerned.

Looking at these extinct charts below, one can easily surmise that this ongoing population reduction agenda has been running in the background for a long time. Little wonder why there are so many cancer and Leukemia deaths nation wide. There are leaking radiation travesties all over the nation. The only future at this point is "On the Beach."

Part 1:
Part 2:

Here are some historical charts that prove the radiation in the USA is an old population reduction tool. Been killing for decades. All one needs do is ask, who profits by purposely making people ill with radiation poisoning? Who profits by killing off much of the populations of the earth?


Sat, 02/23/2013 - 20:01 | 3270515 Muppet Pimp
Muppet Pimp's picture

Pfffft.  China is already a polluted wasteland, and all their so called 'leaders' flee the country as soon as their stolen loot is safely stashed offshore.  China will be a more or less an industrial wasteland/penal colony within a decade.  Future China will make a great depository for the worlds unreformable criminals.

Sun, 02/24/2013 - 01:56 | 3271055 Non Passaran
Non Passaran's picture

I see you're familiar with the fact that their working force has started shrinking and they need some fresh blood...

Seriously, I never cease to be amazed by the number of psychopathic commenters (not you) here. I have been trying to figure out the pattern of articles that make lunatics start commenting en masse but so far I haven't spotted a pattern. Ideas?

P.S. In case of Japan, I think one of main reasons behind the malicious comments is that it lacks a prominent and easily identifiable group of "opressors", which enfuriates bigots and haters of all sorts :-)))
Te easiest way to "solve" the puzzle is to identify Japan as proxy of the US bankster mafia.

Sat, 02/23/2013 - 15:11 | 3270065 cifo
cifo's picture

Which winter is this? 2013-2014? The current winter is almost over.

Sun, 02/24/2013 - 14:53 | 3271887 TPTB_r_TBTF
TPTB_r_TBTF's picture

There is still plenty of time this Winter for a nuclear war.


A nuclear war only lasts for 33 minutes.

Sat, 02/23/2013 - 15:11 | 3270067 JustObserving
JustObserving's picture

Japanese pension funds made a huge mistake by not investing in gold.  When the world is involved in competitive devaluations, you have to own real assets.

UK pension funds will learn that lesson next week as the pound continues its plunge.


Sat, 02/23/2013 - 15:15 | 3270078 earleflorida
earleflorida's picture

like the real assets they bought during the 80's in ussa?

something called real [living] estate? 

Sat, 02/23/2013 - 15:16 | 3270079 Motorhead
Motorhead's picture

Ah, yes, back in the 1980s when everybody was saying that we should all learn Japanese and their style of management.

Sun, 02/24/2013 - 00:21 | 3270981 sitenine
sitenine's picture

Kanban, bitchezz!

Sat, 02/23/2013 - 15:28 | 3270092 JustObserving
JustObserving's picture

Japanese pension funds have $3.4 trillion in assets and less than 0.03% in gold.  That is an insanely small percentage with currency devaluations and a risk of war with China.

Gold has been easily one of the best investments of the last decade, and dwindling supplies and more expensive mining ensure that price cannot fall much below $1200, which is the current production cost.  With rising wealth in Asia, demand for gold can only go up no matter how often Bernanke beats it down by leasing US gold.

It is simply stupid to have so little of your money in gold given the massive printing all over the world. The US alone has printed $3.6 trillion already and will print $1.02 trillion in the next year.  

Any money manager who holds only 0.03% of his assets in gold is failing his clients.

Sat, 02/23/2013 - 15:11 | 3270070 earleflorida
earleflorida's picture


Sat, 02/23/2013 - 15:19 | 3270082 booboo
Sat, 02/23/2013 - 15:19 | 3270085 TheGardener
TheGardener's picture

Comfort energy index as in decadent societies?

What if people don`t care, get back together in a warm
family kitchen and say good bye to external energy buys ?

We don`t need no globalization, much less so anything
that gets our regional independence fucked up as our ability to cut some woods near by. If it is tainted as in taxed ,
don't buy it. Energy taxed ? Stop buying it, it might hurt
you now, but kill the beast within and with out that feasts
at you buying more.

Sat, 02/23/2013 - 15:23 | 3270087 chistletoe
chistletoe's picture

believe it or not,


there were people who actually lived and prospered in such places as

Moscow, Tokyo, Ottowa, Edinborough, and Copenhagen

for several years before the invention of central heating or even the discoveries of oil and gas .....


and there are quite a few folk, worldwide, who are even today rediscovering nifty new money-saving inventions like

wool sweaters and blankets ....

Sat, 02/23/2013 - 15:31 | 3270099 azengrcat
azengrcat's picture

Long wool blankets, newspaper, and tinfoil.

Sun, 02/24/2013 - 01:25 | 3271040 tango
tango's picture

Most folks would question that these places  "prospered." Existed is more like it.  The low population was due to the death - not birth - rate.  Women still had 8 kids but after the Industrial Revolution the death rate dropped dramatically. 

Even those who "prospered" did so with chamber pots, rotten teeth, freezing rooms, foul odors and early death. The vast majority lived in squalor.      

Sun, 02/24/2013 - 15:03 | 3271911 TPTB_r_TBTF
TPTB_r_TBTF's picture

the Good Ole Days


coming soon to a prosperous area near you.

Sat, 02/23/2013 - 15:28 | 3270096 Peter Pan
Peter Pan's picture

Taro Aso, their finance minister recently said that the Japanese elderly should be allowed to hurry up and die.

As callous as that statement sounds, it nevertheless reflects both the reality as well as the hopelessness of the situation in Japan.

Sat, 02/23/2013 - 16:31 | 3270202 fudge
fudge's picture

And he was quick to qualify that statment :)

Asohole = a stupid 72 year old man long past his prime.




Sat, 02/23/2013 - 16:39 | 3270216 Not Too Important
Not Too Important's picture

Socialized medicine will do that to a political leader. They all talk about it privately. It's the main theme of the CFR - population reduction. What it really means is let them all die, but save the few taxpayers for last.

Coming to a broken health system near you.

Sun, 02/24/2013 - 05:58 | 3271177 Sandmann
Sandmann's picture

You mean like Ariel Sharon

Sat, 02/23/2013 - 17:03 | 3270256 Rustysilver
Rustysilver's picture

Peter Pan,

What people are omitting from his statement is that he said .. people that can not feed themselves. They are spoon fed.

That's a big difference.  I have a living will with such stipulation.

Anybody that has worked in a hospital knows the conditions and would never subjected himself to such fate.

Sat, 02/23/2013 - 19:30 | 3270477 Peter Pan
Peter Pan's picture

Thank you for the additional information, but you must admit that he was not driven by compassion when he said it.

Regardless of the intent the reality remains that not only Japan but many other nations are faced with an impossible bill to pay in terms of the aging population.

Sat, 02/23/2013 - 20:24 | 3270545 Rustysilver
Rustysilver's picture

Peter Pan,

I grant you that.

I worked in a Cancer Center on the East Coast, (on the electronics / engineering side), I told my sister that I would not want to be spoon or IV fed.  Most end of life decisions are made by doctors that want to "capture the charge" (even being a last one). The suffering you see is horrendous.

European have "solved" this problem by delaying the treatments so that by the time you get to beginning of the line, there are no easy solutions.  Also, unlike US, 88 or 90 year old are not being treated in most European countries.

Sun, 02/24/2013 - 11:21 | 3271384 Kobe Beef
Kobe Beef's picture

Sure thing Taro, you go first.

Sat, 02/23/2013 - 15:32 | 3270102 Mad Muppet
Mad Muppet's picture

The New Bushido; Buy Abebonds, go beat up a Korean or Chinese worker, laugh off a mild case of radiation sickness, and dig out the old brazier Grandmother used to use.

Sat, 02/23/2013 - 15:44 | 3270116 Ribeye
Ribeye's picture

Those Norweigen twits gave the EU the Nobel Peace Prize,

The second I heard that I knew that war in Europe was inevitable,

Sat, 02/23/2013 - 16:51 | 3270223 Not Too Important
Not Too Important's picture

It will not be 'war' as it is commonly known. There will be 'civil' war as the havenots attack the haves. The militaries, or what's left of them, will be used to defend the bankers/politicians.

Europe has no military to speak of. The US forces will be required back home for martial law. And if they can't be fed . . .

OTOH, once everyone realizes all the food and water worldwide is radioactive, that we're all dying of radiation poisoning, then what?

There is no history to show us what will be happening in a very few years.

Sat, 02/23/2013 - 16:52 | 3270236 Oldballplayer
Oldballplayer's picture

People seem to think the US military will be on the government side. Who do you think is going to get whacked before the whole thing falls apart.

The army on the streets will be made up of doughnut eating assholes.

The Army will just go home.

Sun, 02/24/2013 - 05:58 | 3271175 Sandmann
Sandmann's picture

Which US Army supported the Feds in 1861 ?

Sun, 02/24/2013 - 05:57 | 3271173 Sandmann
Sandmann's picture

Europe has no military to speak of


You might be surprised when the time might be outside NATO

Sun, 02/24/2013 - 15:15 | 3271926 TPTB_r_TBTF
TPTB_r_TBTF's picture



Those Norweigen twits gave the EU the Nobel Peace Prize

"This goes to show that the Norwegians really do have a sense of humor."
Nigel Farage


BTW:   Norway has twice voted "no" to joining the EU, in 1972 and 1994.  The irony of it all.

Sat, 02/23/2013 - 15:47 | 3270121 Mr. Hudson
Mr. Hudson's picture

: "Which then begs the question: is Goldman Sachs,...agitating behind the scenes for global war?"


Just like they started WW1. Touche, Mel.

Sun, 02/24/2013 - 05:55 | 3271172 Sandmann
Sandmann's picture

J P Morgan.....Goldman was small fry in 1914

Sun, 02/24/2013 - 11:23 | 3271387 Kobe Beef
Kobe Beef's picture

Ask Albert Pike and Guiseppe Mazzini. The Lodges were plotting WWI back in the mid-1800s.

Sun, 02/24/2013 - 15:24 | 3271947 TPTB_r_TBTF
TPTB_r_TBTF's picture



The war must be conducted in such a way that Islam and political Zionism  mutually destroy each other.
Albert Pike in a letter to Giuseppe Mazzini

Sat, 02/23/2013 - 15:51 | 3270125 Manipuflation
Sat, 02/23/2013 - 15:56 | 3270127 falak pema
falak pema's picture

'Cos its not going to be a cold; expensive winter in USA, UK, France and Italy?

I don't meNtion those who are already drowning in numbers like Spain and Greece! 


There are a lot of biaised contributors at pseudo "fight club!". 

Sat, 02/23/2013 - 16:33 | 3270205 disabledvet
disabledvet's picture

"may they all have beautiful women to keep them warm then." We really are lacking in philosophy here in the West these days f p. "we want what we want...but we don't want to work for it. we strive for MEANING in our lives...yet are repulsed by the "mean"ness of it all. what has value...what enriches us and the human experience?" and indeed you help provide that. here's my contribution: for the record i have no idea what this is. I do remember "the phenom" though. It was like reading "Children of Corn...LIVE" and i will tell you "it was very odd to be that young and see all us youth caught up in something." clearly "this has taken it to its logical extreme" in all its Marxist glory. But i have wondered of this point? is this the reason we have all been put here? and i must say part of me says.....HELL YEAH!

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