Things That Make You Go Hmmm... Like Is Japan Totally F##ked?

Tyler Durden's picture

We have detailed the straitjacket into which the Japanese have been strapped for the past two decades numerous times in the last few years (in great detail here)  but as Grant Williams leaned back in his most comfortable chair after reading an article about proposed changes to the GPIF (Government Pension Investment Fund), Japan’s public pension fund; the thought popped into his mind - "Japan really is totally f##ked." What led him to that well-thought-out and eruditely expressed conclusion? Read on...


In an interview with CNN’s Fareed Zakaria earlier this year, Abe explained the true significance of the third arrow:

“What is important about the third arrow, structural reform, is to convince those who resist the steps I am taking and to make them realize that what I have been doing is correct, and by so doing, to engage in structural reform.”

Read that again.

Yes folks, the important part of structural reform in Japan is to convince people that Abe is correct. If he can convince them he is right, they will have engaged in structural reform.


You should be.

This is how Japan works — or doesn’t.

Immigration reform has been widely recognized as the only answer to Japan’s crippling demographic problem for well over three decades. Nothing has been done about it.

How about the “Wage Surprise” — increasing wages on a national basis — hailed by Abe as the key to lifting Japan out of the doldrums, and a key feature of Abenomics?



Markets will eventually tire of Abe’s continual promises that more is coming, so he desperately needs to somehow break the entrenched deflationary attitude in Japan.

(WSJ): In a survey of 1,000 consumers on March 29-30 by broadcaster Fuji News Network, 69% said they had not made any special purchases ahead of the sales tax rise, and 77.4% said they didn’t feel an economic recovery was under way.

Good luck with that attitude problem, Shinzo.

This week we got a look at how Abe is faring with one of his promises, that of guaranteed 2% inflation.

Core CPI (excluding food and energy) rose 1.3% in March — unchanged from the previous month and lower than analyst forecasts.

Of course, that was taken as a sign that further easing by the BoJ would be forthcoming...

And round and round it goes... until it stops.

The briefcase in Pulp Fiction ONLY works because we DON’T find out what is in it.

Abe’s third arrow can be loaded into the bow, but it can’t be fired once and for all, because if it IS fired, the game is up. There will still be continual promises of more to come, and markets may buy into that for a while; but, like all central bank-induced “boom times,” Abenomics has a shelf life, and that is nearing an end.

The changes at the GPIF are potentially disastrous, and Kuroda’s BoJ and Abe’s government are desperately trying to MacGyver their way out of an impossible situation, armed only with hollow promises and faith, when what they really need is duct tape and a Swiss army knife.

Abenomics is a plan by which to change Japanese behaviour; but as anyone who has spent any time in that wonderful, perplexing country will tell you, the Japanese do NOT change their behaviour — even when facing a demographic disaster.

Sorry, but Abenomics is actually nothing at all.


To understand why it's all smoke and mirrors... here is Grant Williams fill letter:



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Yen Cross's picture

  KAMPO?   It's amazing how an (4) letter acronym changes BoJ Poli 

   I hedged aud /Jpy for the Sunday open. I think usd/jpy will breach the 101.378 area.


DeadFred's picture

I'd love to hear your reasoning.

TheRedScourge's picture

There should be a movie about the Bank of Japan. Suggested title: "Tokyo Grift".

prains's picture about

Land of the Rising Bum

Oh regional Indian's picture

"Cogito Ergo Bum"...ori -2003

wintermute's picture

Even Godzilla has been hijacked to New York. If Japan gets it back just imagine all the Abenomics stimulus from rebuilding the damage...

MeMadMax's picture

Immigration reform???

They don't let muzzies in, which is a good thing...

Reform, not... Japan may be the last safe place on earth, if they let you in...

Ahmeexnal's picture

Time for Shitzo Abe to take a swim in one of Fuk-u rod pools.

lotsoffun's picture

yes!!  the solution to all the wealthy, educated countries economic problems are to bring in massive amounts of ignorant, uneducated, poor people.   it makes perfect sense.



Monty Burns's picture

13 million Latin American welfare claimants would solve Japan's problems.  I have no doubt.

Oh regional Indian's picture

Japan....poor Japan. the Fed's whipping station....the nuclear industry's test bed, the culture creators dream, Japanese nightmare....

All because of flee energe....

Even America, free energy, only it was everyone elses...

Jam Akin's picture

Debtzilla Versus The Egomonster

Duc888's picture



No more so than USSA.


They have a radioactive problem. We are feeding on our own flesh.

Oldwood's picture

We always fall back on cannibalism when all else fails.

monkeyboy's picture

Soilent Green in 3...2...1...

Incubus's picture

We've been feeding on one another "spiritually" for decades.  It's only a small push to the physical level.

Keyser's picture

With the recent examples of outright contempt for anyone that doesn't "think right", watch for it to get physical soon... 

DeadFred's picture

Yes, I was thinking similar thoughts when he said there is no option other than immigration reform. Hmmm, engineered MERS virus, thermonuclear war, mandatory suicide, lots of other options for the demographics problem. They'll think about it, what they choose remains to be seen.

Spitzer's picture

"Japan really is totally f##ked."

Thought I walked into one of Kyles seminars.

Is it too early to say that Kyles bets were too early ?

Citxmech's picture
 "Is Japan Totally F##ked?"

What is "Yes," Alex.

0b1knob's picture

So Japan has been flat on its back for 30 years now.  Such is the fate of top heavy export oriented countries when they fall.  All that malinvestment.

Wait till China goes down.   The bigger they are the harder they fall.   And the longer they stay down.


CrashisOptimistic's picture

China has oil.

Japan does not.

That is all.

Parrotile's picture

China is currently "friends" with Russia, and Russia certainly has oil a-plenty.

Interesting that US activity has if anything significantly strengthened that friendship - which may turn out to be quite a strategic oversight.

machineh's picture

'oversight' = polite euphemism for 'gross fuck-up'

newbie vampire's picture

Japan has Fukushima and is happily exporting it to everyone foc.

Keyser's picture

If Japan has limped along for the last 30 years without collapsing, think how long the USSA can carry off the charade...


CrashisOptimistic's picture

There was still cheap oil 20 yrs ago.

Yen Cross's picture

 It's amazing? You Just show-up? Disgraced Governer and all?

dewasw's picture

why is it a disgrace to like pussy, unless You like something else.

Yen Cross's picture

     Yer getting there Junior Spalding.

dewasw's picture

Try as you may to discredit Spitszer, he was more of a patriot than most politicians and took steps to end/slow down gov't CORRUPTION and that is why he got the see eye aa axe.


ps..... FU on the spaulding comment



Yen Cross's picture

    You let Cuomo mess with you and also fucked some ugly douche, and we're supposed to vote for you're worthless ass?

TeresaE's picture

Wonder if the Japanese people feel the same pit in their stomach when their gubment lies to them and tells them it's sunshine and unicorns?

I bet they do.

Japan is facing the same thing all of us in the West are, the gubment has spent and borrowed it all, they continue to do more of the same while our standard of living is obliterated, and they come up with new and better clusterf*cks to wipe out more of the Middle and gift it to the ends.

Immigration reform cannot fix resource scarcity.

No jobs, high import expenses, mostly imported goods from food to medicines to energy and computers.

What part of MORE people fixes that?

"Experts" crack me up, yes it would "fix" (by can-kicking once more, if jobs are available) pensions and social security - for a while, it can never be fixed permantly as pensions are fiscal impossibilities no matter how badly we wish it were not true.

But more people won't solve the problem of too few consumer dollars, too few non-government/fiat jobs, and ever-increasing costs to just survive.  As a matter of fact, it will make it worse.

No matter, I'm sure we'll keep applying solutions for a different world and time to our modern problems of overcapacity, overpopulation and over-complexity.  More capacity, more complexity and more population will surely fix the problems that they have alredy caused.

zhandax's picture

Did I read that correctly?  I thought 2% inflation meant 2% per annum.  Not per month.

Grouchy Marx's picture

It must be annoying to TPTB when the people refuse to dance to the music played for them.

Oldwood's picture

They have always considered us stupid, so this only confirms it further. It would never dawn on them that the people may know better than they. It always falls back on the religious fervor. Anything is possible if we just believe strongly enough. They are doing it for us.....sure.

RafterManFMJ's picture

Oh but we are dancing ... Danse Macabre.

darteaus's picture

Print money since 1989, double down, double down and quadroople down, and you end in the crapper?

Who is that a surprise to?

Time to declare war!

Oldwood's picture

The "cleansing". What better way to make a whole new crop of believers.

trader1's picture

Time to declare debt jubilee.

bardot63's picture

Grant Williams always gets 5 stars.  There are precious few widely read observers, out of tens of thousands, who down the road will be seen as having been prescient.

holdbuysell's picture

Grant Williams should put all those 'Hmmm' volume intros together in a book someday and have a fantastic lookback on just how delusional and collectively insane the world had gone.

Great job again, Grant!

alfred b.'s picture


   a Waterloo always comes to the greedy ignorant & so-called fixers who play this absurd money game.


The Blank Stare's picture

The farming mafia JA is a megabank. They control everything from the fertilizer sales to the price offered to the farmers for their products. The farmers still hold a lot of political voting power because the districts were never readjusted to reflect the urban population increase. And this is the LDP's and Abe's base. Any reforms will have to start with destroying JA's power and influence. He can't do it. All he can do is try to get the TPP going, which will serve the same purpose.

suteibu's picture

The government has allowed agriculture to decline since the war.  Currently, Japan can only provide about 35-36% of its food needs even as the government continues to subsidize the JA.  However, the TPP would allow the likes of Monsanto, ADM, and other big-Ag companies to purchase/lease large and small tracts of land.  It is likely subsidization of the JA would continue in order to buy their support for the TPP.  It is also likely that the government would subsidize the foreign big-Ag companies under rules of the TPP which allow foreign companies to sue governments who give benefits to locals that they can not have for themselves. 

And, of course, who will work these mega farms?  The TPP opens the door for low wage immigration.

The TPP is a disaster for Japan (or any other Asian nation).