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"Godfather" Of Abenomics Admits Japanese Policy "Is A Ponzi Game... Taxpayers May Revolt"

Tyler Durden's picture




 

Koichi Hamada is a special adviser to prime minister Shinzo Abe and one of his closest confidants. That makes his comments, as The Telegraph reports, even more stunningly concerning. Focusing his attention on the fact that Japan must delay the 2nd stage of its planned consumption tax hike - for fear of derailing the 'recovery' - Hamada unwittingly, it seems, explains the terrible reality behind the so-called "godfather" of Abenomics' perspective on the extreme monetary policy he has unleashed...

Select stunning quotes that everyone should ignore and just BTFPonziD in Japan...

“The consumption tax hike is a great big turbulence to the Japanese economy. It may have erased almost two thirds of the benefits of Abenomics,” he told the Telegraph.At the very least, a third of this great experiment is gone."

 

“I used to say that we should wait until the third quarter figures are out. However, by various economic indicators, the GDP figures cannot be very optimistic,” he added.

 

...

 

“We should increase the consumption tax in the intermediate future,” he said. “This first shock starting in April has been countered by a monetary counter-move. But can we risk another shock in this way?”

 

He also said that while he fully supported the Bank of Japan’s bond buying spree, he said there would be diminishing returns from quantitative easing the longer it went on.

 

“I completely agree with Kuroda’s direction of policy, as well as his strategy of keeping quiet and surprising the market. Of course, if you repeat the same kind of action then the impact will be weaker,” he said.

 

...

 

Marc Faber, the famous Swiss investor, has accused Japan of "engaging in a Ponzi scheme" because the BoJ is hoovering up most of the debt that has been issued by the government. While Mr Hamada agreed that Japan had created a "mild ponzi game", he also said it was a "feasible" one because of Japan's huge foreign reserves.

 

“In a Ponzi game you exhaust the lenders eventually, and of course Japanese taxpayers may revolt. But otherwise there are always new taxpayers, so this is a feasible Ponzi game, though I'm not saying it's good.”

 

Mr Hamada said it was important that Japanese policymakers sent a clear signal that the government was willing to do whatever it takes to smash deflation and pave the way for wage increases for millions of workers.

 

“I’m optimistic about wages, but the uncertainty is how long it takes," he said. Business is still in doubt about whether Abenomics will continue. If they know it will continue and the profits of export firms are really soaring, they will start to share that with their employees.”

 

Read more here at The Telegraph...

*  *  *
So to sum up... as long as the BoJ keeps buying stocks and bonds in ever-greater amounts (and Japan has more taxpayers to foot the bill) then the ponzi scheme can survive in its fiscally unsustainable way... what a total farce.

The next time someone comes on business media and says Buy Japan (for whetever reason), maybe a reminder that the architect of Abenomics has said that the policy is nothing short of an attempt to keep the Ponzo scheme of Japan alive.

 

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Mon, 11/17/2014 - 19:06 | 5459122 Bangalore Equit...
Bangalore Equity Trader's picture

Listen.

Oh yea! Lets see that happen. Japanese are the most collective, passive people, ever!

Mon, 11/17/2014 - 19:15 | 5459157 Global Hunter
Global Hunter's picture

Hey retard what am I supposed to be listening to? Perhaps try looking up the meaning of a word before using it your posts, better yet piss off and don't come back.

Mon, 11/17/2014 - 19:24 | 5459183 Bangalore Equit...
Bangalore Equity Trader's picture

Listen.

Are you a Glo-ball head hunter? Then suck this bitch!

Mon, 11/17/2014 - 19:28 | 5459194 kliguy38
kliguy38's picture

You have NO idea what the Japanese people can do.......you can push them only so far. They are fearless and they are NOT afraid to die.

Mon, 11/17/2014 - 19:57 | 5459296 kaiserhoff
kaiserhoff's picture

What the leadership is trying to do, quite simply can't be done.

They are trying to protect the fortunes, not just of the banks, but the moneyed elite who own the real estate, and occupy the corporate offices.  Fukushima and demographics have made that impossible.

They need to forget the Keynesian horse shit and work on their real problems. 
Then again, we all do.  So far, the Swiss seem to be in the lead.

Mon, 11/17/2014 - 20:33 | 5459402 NoDebt
NoDebt's picture

Abe was just 'Grubered'?

Amazing the number of people coming forward these days saying "It was all a lie to decieve you.  But trust us, it was for your own good."

They don't even give a shit any more if you know.  Arrogant pricks.  But they're right about one thing- nobody's standing up to them.

Mon, 11/17/2014 - 21:16 | 5459561 TruthInSunshine
TruthInSunshine's picture

Bangalore whore really needs his ass tossed out - most fucking annoying commenter EVER.

LISTEN LISTEN LISTEN LISTEN LISTEN LISTEN LISTEN LISTEN
LISTEN LISTEN LISTEN LISTEN LISTEN LISTEN LISTEN LISTEN
LISTEN LISTEN LISTEN LISTEN LISTEN LISTEN LISTEN LISTEN

Mon, 11/17/2014 - 21:40 | 5459657 The Blank Stare
The Blank Stare's picture

Give him a break, maybe his parents were deaf

Mon, 11/17/2014 - 21:56 | 5459705 TruthInSunshine
TruthInSunshine's picture

Hamada:

“In a Ponzi game you exhaust the lenders eventually, and of course Japanese taxpayers may revolt. But otherwise there are always new taxpayers, so this is a feasible Ponzi game, though I'm not saying it's good.”

Anyone who doesn't now "get it" that Japan is in an inescapable death spiral, even after reading that current quote of a senior BOJ advisor, will never "get it" until it's so plainly evident that Japan's Bankruptcy/Default is featured on TMZ and the front cover of truly empty of any intellectual worth MSM outlets such as USA Today.

And good luck, Mr. Hamada, with that "new taxpayer"replacing old taxpers thing, given Japan's demographics and birth rate.

Tue, 11/18/2014 - 04:00 | 5460411 JamesBond
JamesBond's picture

Things may be bad economically in Japan, but life goes on.  This week is exam week and my teenager goes to school, takes an exam, comes home and studies from 11:00 am to midnight.  Off to school the next day for more exams.  Rinse and repeat all week.  This weekend, she her and pals will hit karioke and party all day and night.  They think their lives are the bomb living in Tokyo.  

 

jb

Mon, 11/17/2014 - 22:55 | 5459906 armageddon addahere
armageddon addahere's picture

Your own fault for reading his stuff. His posts are for skipping over not reading.

Mon, 11/17/2014 - 20:10 | 5459343 tc06rtw
tc06rtw's picture

Funny, they lose all their virtues
 to promote a  virtuous cycle  —

Mon, 11/17/2014 - 20:19 | 5459372 Bangalore Equit...
Bangalore Equity Trader's picture

Listen kliguy38 or whatever.

Yes I do. Japan, like America sold their soles for comfort "YEARS" ago.

Now the gov "IS" the fucking master. Like an obedient dog they will wait patiently until master comes home. They will not shit on the rug nor pee on the tile. They will wait, suffer, then die.

It is you who does not understand Japanese or stupid Americans.

Mon, 11/17/2014 - 20:23 | 5459382 Bill the Cat
Bill the Cat's picture

Pthwbbt?

Tue, 11/18/2014 - 03:02 | 5460360 williambanzai7
williambanzai7's picture

What kind of shoes were made with their "soles"?

Tue, 11/18/2014 - 05:04 | 5460435 Bangalore Equit...
Bangalore Equity Trader's picture

Listen photoshopboy.

Go Grayscale yourself. Then add a "WHITE" layer with 90% Opacity!

OH!

Tue, 11/18/2014 - 07:47 | 5460582 imaginalis
imaginalis's picture

Pendu

Tue, 11/18/2014 - 08:32 | 5460646 FredFlintstone
FredFlintstone's picture

I am a WB7 fan, but that was funny.

Tue, 11/18/2014 - 00:24 | 5460162 wintermute
wintermute's picture

kliguy38 "You have NO idea what the Japanese people can do.......you can push them only so far. They are fearless and they are NOT afraid to die."

If all the Japanese were dead then the question is: Would Chinese jackboots marching across the Kanto plain make any sound?

Mon, 11/17/2014 - 19:34 | 5459208 The Blank Stare
The Blank Stare's picture

Maybe you don't like this guy, and that's OK, but he's not far off the mark. 

 

On the streets, maybe not so much with the younger generation these days, but the older generation, a little. They've let their leaders get away with this BS for 25 years. With only 50% voting population, that makes Japan and the US politically passive. 

Mon, 11/17/2014 - 20:47 | 5459450 Aussiekiwi
Aussiekiwi's picture

Lol, Global retard...I mean hunter calls everyone a retard because he is one, he is just a pimply little kid trolling, forget him.

Mon, 11/17/2014 - 19:29 | 5459198 HedgeAccordingly
Mon, 11/17/2014 - 19:30 | 5459203 Payne
Payne's picture

Japanese are not passive.  They are tolerant to a point.  You seem to lack real world experience of Japanese.  They do have limitations as a culture but passivity is not one of them.

Mon, 11/17/2014 - 19:59 | 5459303 suteibu
suteibu's picture

"But otherwise there are always new taxpayers..."

Japan has lost one generation of taxpayers already, starting on the second generation.  Might not be as many new taxpayers as this pompous ass thinks.

I agree Payne, Japan has been known to take to the streets en masse, and not like those peaceful, orderly Fukushima demonstrations which were taken over by government/nuclear power-backed community organizers.  Personally, I'd like to see it.  Don't think it can't start in Japan first.

Mon, 11/17/2014 - 21:04 | 5459509 Grimnir
Grimnir's picture

They might for a little while, like they did with the Anpo renewal, nuclear power, and the state secrect laws among other rhings.  Then when the government makes it clear they will not budge, they'll quiet down very fast.

Mon, 11/17/2014 - 19:33 | 5459214 tarabel
tarabel's picture

 

 

They don't let cows wander around in their houses.

Mon, 11/17/2014 - 21:57 | 5459716 fuu
fuu's picture

Listen.

 

Gully Foyle

Mon, 11/17/2014 - 19:08 | 5459127 NoWayJose
NoWayJose's picture

Ponzi -- you mean like the Social Security system in the United States???

Mon, 11/17/2014 - 19:34 | 5459220 BlindMonkey
BlindMonkey's picture

In 2014 Charles Ponzi would be the IMF head or Fed chairman or maybe a Nobel prize laureate working for the NY Times, not in jail.

Mon, 11/17/2014 - 20:51 | 5459471 NoPension
NoPension's picture

In 2014, Charles Ponzi wouldn't even rate the third string.

Mon, 11/17/2014 - 19:08 | 5459132 i_call_you_my_base
i_call_you_my_base's picture

Japan: Totally Fucked.

Mon, 11/17/2014 - 19:08 | 5459135 jubber
jubber's picture

Nikkei up 200 bitchez

Mon, 11/17/2014 - 19:10 | 5459138 The_Prisoner
The_Prisoner's picture

You mix Asian single-minded-detemination with Western-style monetarist games you get Japan.

Mon, 11/17/2014 - 19:11 | 5459143 Josephine29
Josephine29's picture

I read some disturbing numbers on Japan's debt burden earlier.

For example 24% of all Japanese government expenditure is projected to go on debt costs this year and that is in spite of what are extraordinarily low government bond yields. Or if you prefer debt costs are 43% of all government revenue. Japan’s official debt measure excludes some of what is counted elsewhere but  even so it is some 17.5 times the expected central government revenue this year (Cabinet Office figures).

 

http://wp.me/pHQQ9-UI 

 

What could go wrong?

Mon, 11/17/2014 - 19:13 | 5459153 i_call_you_my_base
i_call_you_my_base's picture

Which was the point of raising taxes...along with pulling demand forward, which will not happen now.

Mon, 11/17/2014 - 20:08 | 5459337 wintermute
wintermute's picture

Japan has pulled demand forward until the year 2340 is now. Unfortunately several nuclear reactors completely melted down by then.

Mon, 11/17/2014 - 19:18 | 5459169 Bennie Noakes
Bennie Noakes's picture

While Mr Hamada agreed that Japan had created a "mild ponzi game", he also said it was a "feasible" one because of Japan's huge foreign reserves.

Those huge foreign reserves are "invested" in the Ponzi schemes of other countries. They are absolutely lost. There would be a better chance of reclaiming the money if it had been tossed into a black hole.

Mon, 11/17/2014 - 19:19 | 5459176 Bunga Bunga
Bunga Bunga's picture

Civilization is the mother of all Ponzi games.

Mon, 11/17/2014 - 19:20 | 5459173 Sinnedi
Sinnedi's picture

Related https://www.youtube.com/watch?v=hcQTysyGwKQ  

 

Inside ?Japan's Controversial Military Expansion
Mon, 11/17/2014 - 19:19 | 5459177 limacon
Mon, 11/17/2014 - 19:23 | 5459186 czarangelus
czarangelus's picture

I'd like to believe that the impending dénounment of the Western monetary experiment will teach humanity the lesson about running out of other peoples' money once and for all, but we haven't learned anything to date and I'm not holding high hopes.

Mon, 11/17/2014 - 19:24 | 5459190 JuliaS
JuliaS's picture

Japan can't be helped.

Mon, 11/17/2014 - 19:32 | 5459207 WTFUD
WTFUD's picture

YES WE SHAM

Mon, 11/17/2014 - 19:33 | 5459200 WTFUD
WTFUD's picture

Listen! We all know Japan is a glove puppet of BankTrash. Patching up the wailing weeping wall with a 'print as you go nowhere' policy enables the strawmen to circle jerk another day.

Mon, 11/17/2014 - 19:31 | 5459201 WTFUD
WTFUD's picture

Bah.

Mon, 11/17/2014 - 19:34 | 5459205 booboo
booboo's picture

Listen.

Kyle Bass said buy nickels, lotsa nickels, and butter, salt too. Soak nickels in salt, pour on the hot butter and eat.

Guys starting a trend here, listen bitchez

Mon, 11/17/2014 - 19:35 | 5459221 WTFUD
WTFUD's picture

booboo just listen like the NSA.

Mon, 11/17/2014 - 19:33 | 5459211 Rock Sniffer
Rock Sniffer's picture

Princes of the Yen: Central Banks and the Transformation of the Economy

https://www.youtube.com/watch?v=p5Ac7ap_MAY

Fascinating 90 minute documentary on Japan's monetary clusterfuck since WWII.  A few questions left unanswered, though.

Mon, 11/17/2014 - 19:54 | 5459290 NotApplicable
NotApplicable's picture

Like how to spell Rockefeller in Kanji?

Mon, 11/17/2014 - 19:41 | 5459240 yogibear
yogibear's picture

Quietly bring screwed by the BOJ. 

Mon, 11/17/2014 - 19:52 | 5459274 Laughinggrizzley
Laughinggrizzley's picture

Shinzo Abe: "We sucky fucky you lonnng time!"

Mon, 11/17/2014 - 19:51 | 5459278 NotApplicable
NotApplicable's picture

Feasible ponzi... *head asplodes•

Mon, 11/17/2014 - 19:56 | 5459293 AdvancingTime
AdvancingTime's picture

Talk about bone headed moves, Japan is on a course with disaster. The moment the Japaneses stock market fails to rise enough to offset inflation and realizes even a weaker yen will not help we will see a tsunami of money fleeing Japan.

This will constitute the end of the line for those left holding both JGBs and the yen. This has been a long time coming and I contend the cross-border flow of money leaving Japan is why some stock markets have remained so resilient . 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

Mon, 11/17/2014 - 20:00 | 5459307 jubber
jubber's picture

this Nikkei Ponzi abortion now up 250 points wtf?

Mon, 11/17/2014 - 20:01 | 5459310 ClassicCommodity
ClassicCommodity's picture

Hurry up and die Japan

Tue, 11/18/2014 - 04:14 | 5460422 synopsisTODAY
synopsisTODAY's picture

You first. Let us know how it turns out for you.

Mon, 11/17/2014 - 20:09 | 5459335 khakuda
khakuda's picture

"I am confident that we have no idea what we are doing. Thank you very much."

Mon, 11/17/2014 - 20:18 | 5459364 jubber
jubber's picture

up 300 now LOL

Mon, 11/17/2014 - 20:18 | 5459367 Ronaldo
Ronaldo's picture

Maybe this is the reset they need. Limping along for 20 years has gotten them nowhere. Maybe now a crash can happen.

Mon, 11/17/2014 - 21:23 | 5459586 Pareto
Pareto's picture

“In a Ponzi game you exhaust the lenders eventually, and of course Japanese taxpayers may revolt. But otherwise there are always new taxpayers, so this is a feasible Ponzi game, though I'm not saying it's good.”

 

What a prick.

Tue, 11/18/2014 - 08:23 | 5460620 Marc To Market
Marc To Market's picture

Why do you razor sharp wits let Tylers get away with this sloppy stuff.  It was not a godfather of Abenomics that called ponzi scheme but Faber.  Abenomics  was aggressive  monetary and fiscal policy.  The sales tax increase contradicted the thrust of Abenomics. 

I believe that of all one must be critical of.  Yet Tylers are more critical of the US and more trusting of China and Russia, often taking what those officials say at face value.  Many of the comments in this space are critical of everything but the Tylers.   

I think we are all better served by questioning every one. 

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