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Japan's Monetary Pearl Harbor
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
Trying to "fix" a sclerotic, inefficient state-cartel economy by boosting inflation--the ultimate goal of Japan's Monetary Pearl Harbor-- is a self-liquidating path to destruction.
The Bank of Japan's surprise expansion of financial stimulus strikes me as the monetary equivalent of Pearl Harbor --not in the sense of launching a pre-emptive war (though the move does raise the odds of a global currency war), but in the sense of a leadership pursuing a Grand Strategy to the point of self-destruction because they have no alternative within their intellectual and political framework.
In the years before Japan's December 7, 1941 attack on Pearl Harbor, the Imperial government's Grand Strategy was simple: bring the entire Asian-Pacific region under the control of the Japanese Empire.
That this Imperial Project would necessarily lead to conflict with the United States was baked into the project from the moment of its inception.
The Japanese military had embraced the notion of the Decisive Battle as its core war-fighting doctrine. The goal is to draw the opponent's main force into a battle where that force could be decisively destroyed. With their military power shattered, the opponent would be forced to sue for peace.
Just as the logic of Imperial expansion made the attack on Pearl Harbor inevitable, the logic of the Decisive Battle led to the crushing defeats at the Battle of Midway and Leyte Gulf.
It is this stubborn allegiance to a self-destructive strategy that reminds me of Imperial Japan's devotion to expansion. In the 25 years since the 1989 apex of Japanese credit-bubble triumphalism, these same policies--monetary easing, zero interest rates and fiscal deficits to fund Bridges to Nowhere--have only exacerbated the stagnation of Japan's economy and social adaptability.
If this massive expansion of debt is the Decisive Monetary Battle that is supposed to defeat deflation and stagnation, it will inevitably result in defeat and capitulation.
What is needed is structural reform of the real causes of that stagnation--real political and financial reform that dismantle the structural causes of Japan's failure. But such a strategy is not even discussed, much less actively considered, because it would upend the powerful elites and vested interests who benefit from the status quo Grand Strategy.
As John Kenneth Galbraith observed: "People of privilege will always risk their complete destruction rather than surrender any material part of their advantage."This describes Japan's Status Quo of cartels and central state technocrats perfectly. Unfortunately, everybody else gets destroyed along with the Elites when the system implodes.
The political resistance in Japan to meaningful reform is immense. The inflexible sclerosis of Japan's economy is described in Voodoo Abenomics: Japan's Failed Comeback Plan (Foreign Affairs):
To lift productivity, Japan needs serious structural changes to promote creative destruction, the process of replacing decaying firms with vibrant ones. The sectors of Japan’s economy that face international competition, such as the auto industry, enjoy high productivity. But the lion’s share of the economy is domestically oriented, and much of it is shielded from both international and domestic competition by domestic regulations and cartel-like business practices.Japan’s milk market isn’t even open to domestic competition. The powerful farm cooperative known as Japan Agriculture uses its stranglehold on distribution to protect inefficient farmers in the main part of Japan by hindering shipments of milk from the larger, more efficient farms in the northern island of Hokkaido. Tokyo turns a blind eye because Japan Agriculture is a powerful electoral ally of Abe’s political party and because rural voters are disproportionately represented in the Diet. A real reformer would scrap Japan Agriculture’s exemption from the Antimonopoly Act, a law passed in 1947 designed to encourage competition, and use the act to crack down on such practices.
The net result of protecting cartels and fiefdoms by lowering interest rates to zero and flooding the financial sector with "free money" is social depression, characterized by the erosion of employment, and a hollowing out of the economy's core strengths:
Since Japan’s rigid labor laws make it nearly impossible to lay off permanent employees in downtimes, companies now tend to fill open slots with part-time or temporary workers, and they typically pay them a third less. Today, 17 percent of Japanese men aged 25 to 34 hold such second-class jobs, up from four percent in 1988. Low-paid temps and part-timers now make up 38 percent of Japanese employees of all ages and both sexes -- a stunning figure for a society that once prided itself on equality.
Trying to "fix" a sclerotic, inefficient state-cartel economy by boosting inflation--the ultimate goal of quantitative easing and the Monetary Pearl Harbor-- is a self-liquidating path to destruction:
Since 1997, wages in Japan have fallen by nine percent in real terms. They are expected to continue falling, despite highly advertised wage hikes by a few hundred giant firms whose profits from overseas sales have been artificially boosted by the weaker yen. Abe claims that wages will rise once workers and firms come to expect inflation. In reality, deflation is not the cause of Japan’s problems but a symptom. Trying to cure Japan’s malaise by generating inflation is like trying to cure a fever by putting ice on the thermometer.
The same devotion to a self-destructive Grand Strategy characterized Japan's Imperial High Command: dissent was suppressed, lest the truth step on powerful toes. And so the voices of experience within the Establishment who recognized the enormous risks of the Grand Strategy were ignored or silenced.
Admiral Yamamoto, architect of Pearl Harbor and Japan's early victories in the Pacific, provided one such voice of caution: "In the first six to twelve months of a war with the United States and Great Britain I will run wild and win victory upon victory. But then, if the war continues after that, I have no expectation of success."
Despite his reputation and rank, his influence within the Power Elite was limited. The Grand Strategy of self-destruction played out with all the hubris and inevitability of a classic tragedy.
Now the Bank of Japan is pursuing its own self-destructive tragedy, and all the world can do is watch from afar and hope the eventual collapse of this Grand Strategy doesn't take the entire global financial system down with it.
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Otherwise know as QE 4.
....EVA
..is a self-liquidating path to destruction.
We suppose they don't know this. That assumption may be ill placed.
its as though I am looking into a crystal ball of the future of the US. Ain't it grand....
fuckin japs...they will rather take the world down with them as they themselves as a nation goes down the tubes....there is nothing we can do about it....they will kamikaze the world into oblivion.
Where is Jack fuckin Jew Lew when you need him??? So he says China is a currency manipulator??? and when Japan does this, this fucker dont make any comment??? Japan is the worst fuckin Currency manipulator out there right now.
just wait until the fingers and missles point from each country blaming the other.... gonna be a fun decade coming.
Yooo Hoooo, serial ZH hata and down-voter, don't forget to down arrow this one toooooo. I'll even get it started for ya.
http://whatreallyhappened.com/WRHARTICLES/McCollum/index.html
the mcollum memo sheds a little different light on pearl harbor history
Kyle Bass's predictions about Japan are finally seeing their fruition.
Accurate predictions often come to fruition very, very slowly, then very, very quickly.
Keep an eye peeled on the CNY, now, since China simply can't afford to not react to Japan's sudden crazy currency debasement.
"Tora! Tora! Tora!"
A sad road from the "lightning strike" on Pearl Harbor to the surrender on the deck of the U.S.S. Missouri.
They won't be surrendering to the U.S. this time though.
This bitch already hit the iceberg dude, there is no saving it, the japanese are just jumping up and down seeing if they can make it sink faster.
This is all Noe theatre by the Japanese. They are just playing their role, dancing to the tune of the Deep State that owns their ass since 1945.
Think of this stage of Abenomics as the "777 hitting the building" with everyone tuned into the channel to watch the show. The airplane hit will make for a loud noise and impressive flames, but the preset charges going off inside the building will do the heavy lifting.
TPTB know the globalist economic edifice wasn't made the handle all the shocks of the last 7 years, but they've been propping it up, preparing for just the right moment, and the right culprit to blame it on before letting go.
I think the Japanese move signals that the moment has arrived.
The Bankers and controllers got all their bets covered, and will make the world economic structure collapse into the footprint they have chosen for them to maintain and enhance their control with the controlled demolition.
Never let a crisis go to waste more than just a saying - its their blueprint.
"They are just playing their role, dancing to the tune of the Deep State that owns their ass since 1945."
This is a fairy tale fantsay perpetrated for some posters here. Japan has been a Skull and Bones bitch since Perry took control in 1853.
Perry only woke them up. The Japanese Emperor and his council realized that the chivalrous romantic Samurai fantasy dreamworld they were living in could not be sustained in the modern world.Remember that the Samurai went on strike after common soldiers were able to kill them with western muskets, so these were banned for two hundred years in order to maintain the status of the Samurai class.
The Japanese mind exists in a different dimension than does the Western mind, and their decision making shows it. Bone headed doesn't capture the essence of their folly, and some of the things they did in WWII and before that in China show how bone headed they can be. Bone headed and brittle as a society, even if magnificent in their art, singlemindedness and esthetics.
For this reason the Japanese emperor, faced with the US Black Ships, send his emissaries to the four corners of the world to gather together the best orgnanizational techniques and technologies in order for Japan to modernize.
The 19th century equivalent of the Wehrmacht was to be the blueprint for their Army.
The British Navy was what they modeled the Japanese Imperial Navy on.
They imported Dewey's ideas on education from the US.
They learned beer making, steel making and chemicals from the Germans.
They learned to make whiskey from the Scots.
Within 38 years they kicked Tsarist Russia's ass in Siberia, supposedly with British intelligence help. But they were still not yet owned by the Bankers.
After Hiroshima and Nagasaki, when Japan was prostrate and defenseless, that is when the US Deep State moved in and bought up everything for pennies on the dollar, and set up the Japanese government to TPTB's benefit.
"They are just playing their role, dancing to the tune of the Deep State that owns their ass since 1945."
This is a fairy tale fantsay perpetrated by some posters here. Japan has been a Skull and Bones bitch since Perry took control in 1853.
Oh, please. They're trying to use the same fucked-up, broken tools as the rest of the planet to save themselves, and taking the world with them is a side effect, and not intent. They'd rather be living like it was 1985 again than take the world down with them.
If Japan doesn't take the world out, then it'll be Europe's turn to try, and if not Europe, the US or China.
It's not the fucking japs, it's the fucking TPTB, the fucking statists, and the fucking Keynesians.
Understood bro...but the Japanese sheeps just standing there is beyond belief.
I don't think it's an accident that the most printing is happening where the people are most docile.
very true, an important point. They are very docile and subservient to their central authorities, even more so than most in the US. Its doubtful you will see riots in that country. We are talking about a culture that promoted ritual suidice if your 'master' told you to do so. And right now, they are telling them that they are 'suiciding' their currency and economy, and, so far, most of the people seem ok with it. I would hope more US citizens would wake up before we reached that point in debt and money printing, but Im not optimistic
US citizens aren't about sacrifice. No one here is going to fall on the sword. The seas change event could be when the young voters have a chance to take it to the retirees numbers wise. We all know the elections mean little but whatever crumbs are thrown to the 99% are often tossed by whatever criminal is elected. I assume some small manner of opportunity, even if mostly illusionary, will have to go toward the young and working at the expense of the boomers.
there is no gun ownership in japan....
"Now the Bank of Japan is pursuing its own self-destructive tragedy, and all the world can do is watch from afar and hope the eventual collapse of this Grand Strategy doesn't take the entire global financial system down with it."
It's just another black swan in the ever growing flock of black swans. Any one of them can trigger the Great Reset. All you can do is take advantage of the remaining time left, prep, and stack for all your worth and then some. Don't be complacent. Always consider that this day may be the last one before the SHTF.
If it so happens that the Japanese implosion triggers the economic dark ages, don't hold a grudge against them. It would have happened somewhere else and sometime else. There is no way any of us with any decent amount of sand left in the hourglass is going to avoid this upcoming shitstorm.
"There is a banker behind every blade of grass"
or sumfin likie that.
Epic man. Just, epic :-)
Pearl Harbor shouldn't have been a surprise.
It was most certainly was not a surprise. FDR and many others knew it was coming.
James Perloff explains...(great interview, historically speaking).
http://nwopodcast.com/fetz/media/blakeney%20real%20deal-perloff%20pearl%...
yes indeed. The US intentionally backed japan into a corner, and ignored every plea for negotiations and reconciliation the japanese govt made the FDR to ease the economic sanctons. This was done to goad japan into attacking the US as a back door way for the US to enter WWII. Despite assuring voters in the US that "American boys will not be sent to fight in another european war" during the last presidential campaign before the war, FDR's admin was doing everything it could to make sure exactly that happened.
Sounds a little like what Obola is doing to Russia.
Good call.
Disturbingly, FDR needed a war because his Keynesian failures had prolonged the depression.
FDR "cornered" Japan into attacking Pearl Harbor and I supposed he orchestrated Kristallnacht? Maybe he knew Pearl Harbor was coming, maybe not, but you have to be off the deep end to think he "made it happen" because he "needed a war."
What, you think the U.S. should *not* have entered WWII? If there was ever a justified war...
simpleton....asking simpleton questions...
Japan was butchering and raping it's way across China. Your theory is that it's America's fault because we didn't offer up more people to Japanese enslavement and torture. Nice.
DonutHole,
It isnt a theory. And nobody here is defending Japanese atrocities in WWII. Try to stay on point.
Is the US to invade and destroy every country that commits Human Rights violations? Causing yet more death and destruction gets you exactly nowhere. It is not our Job or place to run around the world playing super hero.
you are right, they were. But everything bad that happens in the world is not our problem. Things like that happen all over the world today. As an (allegedly) free indidvual, you are free to go over to any of these places and fight for justice, fairness, all that good stuff. Just don't try to make me pay for it, or get the govt to draft my kids to go fight for it. But, you won't. You will expect others to do so for you. We were hardly kind to the chinese with our presence there, or anywhere else in the world at the beginning of the last century. All the US did overseas in those thrid world places was make them safe for US corporate intrests. Japan offered to largely abondon their presence in china in order to avoid war, we persisted in our push towards war becuase it was the easist way to enter into war with germany a well. Nothing that I said implyed "offering up more people to japanese enslavement and torture" either argue your point like an adult or take your trolling elsewhere. Thanks for playing....
Donut, need I remind you that if you do not tow the line that the illuminati are in total control and everyone elected to any public office is prima facia a totalitarian and the entire span of human history is a massive ploy by generation after generation of "bankers", "the tribe" and "the elite" then you will suffer the wrath of the many here on ZH.
... and stop being a crybaby, you embarrass yourself. Come back with something a little more erudite
It was only a surprise to the useless eaters
It wasn't. FDR persued an oil embargo on Japan which he knew would force the Japanese to attack us. It was a ploy to get the US public behind the US going to War.
All sanctions are way to get our enemies to attack us and then we can use that as justification for war.
Think about who the USA has sanctions against now. They are targets for our future wars.
yep. And when they tried to open up negotiations to end all of this, FDR refused. He tried unsuccessfully to goad the germans into attacks US flags ships, which the germans, having learned their lesson from WWI, refused to do, even though they were legitimate targets according to established international laws. Wilson used the same ploy of the Kaiser in WWI, who eventually did attack US ships and ships known to be carrying US persons. Wilson basically declared that US citizens have the right to travel aboard beligerent countries' ships, even those carrying munitions, without the risk of said ships being sunk by the other warring parties. Absurd, on its face, yet this was used to enter into a war that cost hundreds of thousands of american lives and reshaped the world, ensuring WWII was inevitable. FDR tried to use the same tactics on hitler, but he didn't fall for it, and wanted the US to stay out. realizing this, FDR engaged in economic warfare against the japanese, refused to engage in talks to bring about a peaceful resolution, all while lying to the american people about his war mongering intentions. And the guy, FDR, is STILL a hero to those on the left. disgusting
Yeah, we should have left Hitler alone and stayed out of the war. Sieg Heil mother fucker.
You think sanctions were crazy harsh and FDR a war monger? Get some perspective...
http://en.wikipedia.org/wiki/Hakk?_ichiu
That FDR was real son of a bitch compared to this....
http://en.wikipedia.org/wiki/Comfort_women
okie - using Wiki does nothing to strengthen your argument ... in fat it lessens its impact. Wake the fuck up.
I gave this guy a very good link to listen to an expert on Pearl Harbor and he blathers on about some bullshit that nobody even brought up.
An Okie from Muskogee?
Yep. Game Theory in practice.
I think that FDR thought Japan might sink a ship or two. I don't think it occured to him at the beginning that our fleet would be ransacked at Pearl as the first strike.
FDR didn't care about the obsolete battlewagons lined up in Pearl Harbor - he knew they were relics from the previous war-making mindset.
For that reason, there were no aircraft carriers at Pearl on Dec 7. Those were what was really important, and were safely at sea, out of harms way.
The most salient fact to take away from Pearl Harbor is that the US had broken the codes and knew what chess moves the Japanese were making. Never let a crisis go to waste.
The idea was that the Japanese hit be impressive enough to get the US public on-board with the idea of entering the War.
Hari kari, senior style.
Japan is killing their old people.
70 years ago they destroyed their youth!
How much of a sin is this today in Japanese history and tradition?
Unfortunatlly, the elders need alot more encouragement than the younger more ignorant kids...
Now the Bank of Japan is pursuing its own self-destructive tragedy, and all the world can do is watch from afar and hope the eventual collapse of this Grand Strategy doesn't take the entire global financial system down with it.
On the contrary Charles, I'm watching from afar and praying for exactly that collapse.
Russia and China could isolate Japan like the west is trying to isolate Ukraine...
It's all fucking theater for the sheep. The oligarchs around the globe have never had it better.
they are doing it to japan now.
That's one heck of a "Crack suicide squad"...
/s
no bankers or oligarchs have been harmed in these bread and circuses...
nah, this isn't to fix their own sclerotic economy, it's to make sure US-UK hedgies can keep borrowing freely and plowing it into high-yielding trash overseas ...
this isn't about Japan, US-UK hot money created the Japan bubble in the first place.
All roads lead to US-UK hyperfinancialization. That's the root of the sclerosis.
Nailed it. Although Japan is fully Trilateralist and printing with eyes wide open.
Japan is still occupied. Change the analysis
But doesn't the fast food taste great at Camp Schwab
eventually, the japanese yen carry trade will return to japan to destroy itself.
The great majority of Japanese debt is held by Japanese, the Emperor will just get on the radio, apologize, there will be lots of bowing, he'll say that for the sake of the nation everyone gets a 75% haircut, sorry, sorry, so sorry...then everyone just goes back to work. Tokyo will still be one of the best restaurant destinations in the world, I love that little place in Roppongi that has fresh barbecued eel, amazing, especially with a nice crisp Coedo Shiro beer...
gomenasai, gomenasai, gomenasai
will be in tyokyo on thursday. if i get to the big R, I'll toast some sake in honor of your shiro
jb
They are exporting radioactivity. So, they've got that going for them.
Japan has done another Pearl Harbour .
This time against the major oil producers .
See
The Smoking gun of Clathrate mining .
http://arctic-news.blogspot.com/2014/08/horrific-methane-eruptions-in-ea...
See also
http://andreswhy.blogspot.com/2014/09/rogue-swan-tech.html
http://andreswhy.blogspot.com/2013/04/petroleum-price-and-clathrates.html
http://andreswhy.blogspot.com/2010/09/mexican-gulf-oil-spill.html
Theyr'e using tailored archaeobacteria to release methane in a controlled fashion .
Very cheap . Seed the clathrate bed , then harvest the bubbles .
A high wastage percent , but it costs nothing .
This is what you are seeing in the
http://arctic-news.blogspot.com/2014/08/horrific-methane-eruptions-in-ea...
We're just seeing the leakage .
The Japanese Yen is going to laugh last .
This news is already breaking .
"the move does raise the odds of a global currency war)"
absolutely
no way other mercantile countries don't respond
Japan has gone from a trade surplus of $175 billion US in 2006 to running a trade deficit ... beneficiaries of japan's trade loss will not stand idly by.
US will be importing deflation ... S&P earnings will be crushed ... recession near
Oh ya mean like feckin' China? China is just looking for an excuse to pump up the volume on Japan to take the eyes off of their own money printing problems.
The problem with the devaluation ploy by Abe is (as kobe beef so well pointed out in another ZH thread, sorry, don't have it handy), that japan.gov is flat broke and doesn't have enought to cover their spending commitments.
This puts them in a *really* vulnerable position should the Chinese start rattling sabers which require a Japanese response. If the Japanese get into a serious arms race with China, it will be USSR all over again, with Japan reprising the role of the nasty Soviet Union and spending themselves into oblivion.
You can only print so much, and having to fund a much larger military will take the bigger chunk of the pie - something will have to give. As a minimum, the Japanese population will decend into US Detroit-like middle class misery...
Japan=US colony
Japan would do anything to save US economy (Stock and Bond market.), if they are ordered to do so. They don't care about Japanese economy nor Japanese people.
Abe is a puppet of US Neo con (not White house).
I love Charles, but here he fails to apply Occam's Razor to the BoJ actions. As I said here on ZH over the weekend, this latest QE is really best viewed as a currency de-valuation disguised as QE.
While I agree that the alternative - a generational restructuring of the Japanese economy - is inevitable and essential, it is also very painful in a democracy, even a Japanses-style democracy. Heck, it was very painful for them in the 20's and 30's.
People here on ZH like to joke about the assassination of finance ministers etc., but the sad truth is that the 1920's and 1930's saw a rash of political assassinations in Japan as the "elites" of the time attempted expansionist/QE policies at the expense of the military and other vested interests, who pushed back very hard.
Charles left this out of his analysis and that's too bad, because the folks in charge of Japan know how de-stabilizing real reform can be from a review of their history. I'm not excusing their actions, rather trying to put them in more context.
This downvoter is so clever...I wonder how that is working out for him....being clever
I have been a long time student of Japan's road to World War II and especially it's Naval History. I read it up during my time in the Navy. This quote really hits the nail on the head : "but in the sense of a leadership pursuing a Grand Strategy to the point of self-destruction because they have no alternative within their intellectual and political framework."
If you study WHy Japan made the insane decision to attack Pearl Harbor and go to war with a nation that could crush it with ease, you need only accept the above quote as reflective of just how the Japanese mind worked then, in the early 1940's. Now we see today's economic crisis handled in much the same way, a suicide pact. Because this monetary stimulation and buying of all issued debt by the BoJ is nothing short of suicide. Sadly, all this printing will liquify the speculators and bankers of the world, who go around planet earth seeking liquidity at zero interest rates, and take to to play all the "carry trades".
If you study real economic growth models form past history of economic growth, I wish you good luck finding "Carry Trade" anywhere in there. Or "Money Printing" Or "Bond Buying" or "Liquidity Injections".
Fuck, this all comes down to people who believe financial engineering has replaced the laws of supply and demand. The Unseen Hand that grows economies if the playing field is level.
I just think, that if someone could repeal all this central bank bullshit, and return all markets back to a level playing field with no government playing of favorites, then growth would return. Lots of people are anxious to go into business, but the present system kills them before they can even think up a business plan. Corrupt corporate control of congress takes the play field and tips it all their way! America in 2014 has "No Democracy" "No right to privacy" "No free markets" "No level playing fields"
All is greed corruption lies and rewarding of failures! Think about it! America = Reward Failure. Especially at the Highest Levels of economic, political and social life in America.
Yep. The financial "Industry" is all monkey business and no real business. the Oligarchs seem to like this carry trade bullshit; what do you think of Kyle Bass, he's looking better all the time.
"Liquidity Injections"
Sounds like a porn film, except in this instance it's a snuff flick.
Someone should write a book on this matter.....oh wait, she has....time for Atlas to Shrug.
Wait until Zombie LeMay gets done with their little asses this time around. He only got to what, 63 cities the first go.
Talk about greatest bed-wetting pyromaniacs in history, when that guy died Pele her fucking self was waiting for him with open arms and a smile and Baal Harmon held a barbecue in his honor.
paybacks a bitch, bitchez
"raise the odds of a global currency war"
I'm pretty sure it's well under way, and that we're closer to all-out global war than most wish to think.
Kuroda is the new asshole.
Just printing paper money like there are no consequences.
What a bastard. Thanks to him, gold is down, stocks are up, all the swindlers are having a laugh, the rich get richer and so forth.
What they are printing useless shit like yen. Total shit.
Hunch, SWIFT has become a troubling producer under Basel Accord. Just like quantitative easing, another Roman number. My surname ends at IV. Time to hail a few bullets to the people that think Brussels is the New America Transformation. Once the families body bags stack up, this European agenda will end.
FYI
They despise our Constitutional Laws. Death by the second ammendment.
brilliant http://www.bloomberg.com/video/faber-japan-is-engaged-in-a-ponzi-scheme-...
The whole interview here http://www.bloomberg.com/video/marc-faber-on-japan-bonds-economy-gold-an...
as a correction the japanese view of pearl harbor as the decisive battle is in line with the european view of war until that time(including ww1). japan learned all she knows about empire building from the euro empires. while your view of japan's motivation in attacking pearl harbor is a minority western view but the correct historical view it only complies with today's actions in an equally formidable way.
japan's decision to consider an attack on the usa was motivated by the oil embargo imposed by the western colonial powers so japan needed to secure indonesia's oil and knockout the usa pacific fleet at pearl harbor. japan's motivation for this weekend's action is the sellout of usa allies by the last 4 presidents foretold in the demonstrations over the security pact renewal in 1970. remember, japan's biggest trade partner by far is china. trade with the usa is only around 100bil/year. the only need japan has for dollars is oil. iran(japan's biggest supplier) and japan have a swap agreement so dollars aren't needed and even though japan denies having much gold it is hard to believe they don't have some secret stash to back other currency swap arrangements made throughout asia. japan's future is with china, the rest of asia and the other brics.
this is the trillion yen coin. this is a circular loop of new debt that has no meaning since the boj is .japgov. like a reserve currency cannot technically default a .gov buying its own debt owes nothing to no one technically, totally sanitized in the present environment of no real growth. it is total zirp. zero interest, zero principle bond. it is a lincoln greenback laundered through the boj into real yen to pay "real" debt. loolll. fn fn brilliant!!!!
It is to late to reverse the weak yen policy, Japan has gone over the edge into the abyss. It is clear that the prospects for Japan are lousy. Simply put the country is to far in debt to ever pay it off. Remember that Japan has few natural resources and imports raw goods a weak yen will drive up the cost of these imports. The days of huge surplus trade deficits that blessed Japan are gone!
The writing is on the wall. Japan is facing a wall of debt that can only be addressed by printing more money and debasing their currency. This means Japan will be paying off their debt with worthless yen where possible and in many cases defaulting on promises made. Japan's public debt, which stands at around 230% of its GDP and is the highest in the industrialized world. They are past the point where they can return to a "free and fair market" interest rate marketing their bonds to the world and still be able to pay the debt service. When Japan crumbles it will be felt across the world. More on this subject in the article below.
http://brucewilds.blogspot.com/2014/05/japan-sliding-towards-abyss.html
deflation is not the cause of Japan’s problems but a symptom
So fucking true!!!!