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Japan Is Dying And We Still Don't Get It?!

Tyler Durden's picture




 

Submitted by Raul Ilargi Meijer via The Automatic Earth blog,


Dorothea Lange Miserable poverty, Hooverville, Elm Grove, Oklahoma County, OK Aug 1936

What is it with us? Don’t we WANT to understand? Japan announced on Monday that its economy is in hopeless trouble and back in recession (as if it was ever out). And what do we see? ‘Experts’ and reporters clamoring for more stimulus. But if Japan has shown us anything over the past years, and you’re free to pick any number between 2 and 20 years, it’s that the QE-based kind of stimulus doesn’t work. Not for the real economy, that is.

The land of the setting sun has during that time thrown so much stimulus into its financial system that Krugman-esque calls for even more of the same look even more ludicrous today than they did all along. Abenomics is a depressing failure, just as we knew it would be since it started almost two years ago. It’s not complicated, and it never was.

Japan’s stimulus has achieved the following: banks get to pretend they’re healthy and stocks rise to heights that are fundamentally disconnected from underlying real values. On the flipside of that, citizens are being increasingly squeezed and ‘decide’ not to spend (not much of a decision if you have nothing to spend). Since Japan’s ‘consumer’ spending makes up about 60% of GDP, things can only possibly get worse as time passes. If ‘consumers’ don’t spend, deflation is the inevitable result – and that has nothing to do with the much discussed sales tax, it’s been going on for decades -.

Therefore, the sole thing QE stimulus has achieved is a wealth transfer from poorer to rich. And that’s not only the case in Japan. Mario Draghi yesterday hinted – again – at all the stuff he could start buying next year, including sovereign bonds, even though that would violate EU law. And whether or not Germany will let him in the end, the fact that he keeps the option alive even if only in theory, tells us plenty about the mindset at the ECB.

That is, it’s the same as in Japan. And doing the same can only lead to the same results. A poorer population, a richer toplayer and an economy that continues to shrink, which will and must lead to the same deflationary trend. The idea that an economy can be rescued by pushing public funds into its finance system and stock markets has been forever thrown out by Japan’s experiences.

Draghi said yesterday that ‘monetary policy has done a lot’, and while that may be correct, it says nothing about WHAT it has done. From where I’m sitting, Germany’s recent drift into negative territory and the ongoing record unemployment rates around the Mediterranean certainly tell us a lot about what it has NOT done. QE, no matter how big and how crazy, doesn’t heal real economies, it makes them sicker.

If consumer spending makes up 60% of GDP, as in Japan, or even 70%, as in the US, then you need to boost that spending. And you don’t do that by handing over what financial wiggle room you have left, to banks so they can pile it on to the reserves they hold at central banks.

It is accepted as gospel that it’s a good thing to give banks free money, but it would be the devil’s work to give it to consumers. Instead, the latter must be squeezed from all sides, through austerity, the loss of services, benefits, wages and jobs, in order to prop up the financial system. How and where is it not clear what that will result in? There’s only one possible outcome.

The reason why all governments and central banks keep following the failed QE stimulus path regardless lies in the relative political powers that different parts of a society have. In today’s world, saving the banks, which equals saving the rich, is not only the priority, it’s the only deliberation.

And if you might be under the impression that what is true in Japan and Europe does not hold in the US, why not start with this graph from Doug Short, and take it from there.

If and when an economy is as deep in the doldrums as all major economies today are, you can’t rescue it by taking from the poor to save the rich. It’s fundamentally impossible. You need the bottom 90%’s spending in order to generate enough GDP to stay out of deflation. Money must move through an economy for it to stay sufficiently ‘lubricated’. And the only people who can keep that money moving are the bottom 90%. It’s Catch-22.

Any stimulus must be directed at the bottom, or it must of necessity fail. Nothing commie or socialist about it, but simply the way economies work. And it’s not just some difference of ideal or insight or something, it’s very simply that an economy cannot function without its poorer 90% of citizens spending.

Anything else is simply Grand Theft Auto. Both Japan and Europe are preparing for more of it.

 

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Tue, 11/18/2014 - 18:13 | 5462686 stant
stant's picture

Now we know why they build cars here now

Tue, 11/18/2014 - 18:14 | 5462696 Divided States ...
Divided States of America's picture

Honestly if the Japanese citizens themselves dont give a shit, why should we?

Tue, 11/18/2014 - 18:20 | 5462717 FreeShitter
FreeShitter's picture

We don't. We have a game on Sunday though.

Wed, 11/19/2014 - 01:26 | 5464160 imaginalis
imaginalis's picture

Go Galaxy

Tue, 11/18/2014 - 18:21 | 5462718 FreeShitter
FreeShitter's picture

We don't. We have a game on Sunday though.

Tue, 11/18/2014 - 18:30 | 5462761 Statetheist
Statetheist's picture

Thanks for that complete non-sequiter.

Tue, 11/18/2014 - 18:35 | 5462776 SeattleBruce
SeattleBruce's picture

The point is that the average person is not yet paying attention, and is distracted with things like NFL and reality TV.

Tue, 11/18/2014 - 18:41 | 5462793 max2205
max2205's picture

Fuck this shit, lets go to Costa Rica. 

 

This place is like Children of the Corn

Tue, 11/18/2014 - 18:48 | 5462810 Divided States ...
Divided States of America's picture

Or in Japanese's case, they are distracted by pachinko booths, JAV, video games and sumo wrestling.

Tue, 11/18/2014 - 21:39 | 5463306 markmotive
Tue, 11/18/2014 - 22:10 | 5463385 KnuckleDragger-X
KnuckleDragger-X's picture

Time to sing along with the market/banker theme song....

 

https://www.youtube.com/watch?feature=player_detailpage&v=NvgzNEPhYQA

Tue, 11/18/2014 - 22:16 | 5463405 knukles
knukles's picture

That's fucked up.

The famous Shakespearean actor, Danny Bonaduce, got his start there.
And to think I used to get off on Shirley Jones

Where the fuck did you remember that from?
Hooked up to a black hole of odd deeply disturbing memories ....
Holy Kashmolie!

Tue, 11/18/2014 - 22:47 | 5463546 KnuckleDragger-X
KnuckleDragger-X's picture

I'm a sick person too, I also had a woody for Shirley Jones....

Wed, 11/19/2014 - 00:04 | 5463922 Al Huxley
Al Huxley's picture

No way man, Susan Dey, all the way.

Wed, 11/19/2014 - 00:20 | 5463970 SafelyGraze
Wed, 11/19/2014 - 06:26 | 5464466 The Navigator
The Navigator's picture

If there was wood for Shirely Jones, there wasa forest for Susan Dey - born in 1952, don't go looking for her picts now, it'll destory your old dreams.

What a babe in the old days.

Wed, 11/19/2014 - 00:11 | 5463929 SafelyGraze
SafelyGraze's picture

coincidentally, we are doing a Unit on japan at my school this week!

we have been folding paper into shapes like a frog or a box and that is why it is called origami. origami is a word with the accent on the third syllable

also, we will be going to a japan restaurant on friday if everybody has finished their paper on time about the people of japan and their culture. we passed around a copy of their menu. did you know that in japan they eat "water chestnuts"?!!!!

and get this -- we had class today while sitting On The Floor! that's also a japan thing to do.

there are alot of interesting things about japan!

next week: bolivia!

oh, and we also had a "lock down drill", which allows us to get a better idea of the dangers that the school resource officers have to face in their daily lifes!

 

Tue, 11/18/2014 - 23:33 | 5463803 LordEffingtonTh...
LordEffingtonThreeSticks's picture

Come on! Get happy.

Wed, 11/19/2014 - 01:41 | 5464199 Hapte
Hapte's picture

Hi Lorddudewhatever. Still wondering what an "Anasazi Jew" is... I goolged the term but the oracle gave me no insight.

Cheers.

Wed, 11/19/2014 - 01:48 | 5464212 prmths2
prmths2's picture

ashkenazi

Tue, 11/18/2014 - 22:12 | 5463392 knukles
knukles's picture

Why can't any of you cold hearted people care about yachting important?

Today is the 39th anniversary of the Jonestown Massacre and you're all pushing for us to bail out Japan....
Let's take care of our own, for a change.
Like the impending riots

Like the banner hung when our campus was occupied by the National Guard after Kent State

"Welcome National Guard.  Hope you have a blast"

 

Wed, 11/19/2014 - 13:23 | 5465849 Optimusprime
Optimusprime's picture

Speak Espanol?  Have a truly marketable skill or trade?  If not, only  if you are already rich.

Tue, 11/18/2014 - 18:47 | 5462809 Uchtdorf
Uchtdorf's picture

Right, otherwise they would be buying precious metals like crazy.

Tue, 11/18/2014 - 19:13 | 5462895 logicalman
logicalman's picture

Humans mostly behave as herd animals.

There are 2 other types - both are awake to what's going on.

The psychopaths exploit the herd instinct out of greed, the outliers (a fair few in here, methinks) try to wake up the herd, so the psychopaths try to demonize/destroy them.

I guess a farmer with a cow that wouldn't cooperate would send it to the abbatoir before the rest.

 

Tue, 11/18/2014 - 19:00 | 5462846 Motorhead
Motorhead's picture

C'mon, man, get with the program (read:  sarcasm).  And, if you are going to try and be cool, spell non-sequitur correctly.

Tue, 11/18/2014 - 18:21 | 5462722 Bangalore Equit...
Bangalore Equity Trader's picture

Listen.

No really. Because USSA is Japan!

Tue, 11/18/2014 - 19:10 | 5462885 TradingTroll
TradingTroll's picture

Bangalore Equity Trader:

 

Listen. No, really. Listen.

 

Now Listen and take a deep breath.

 

Pfffft.

 

I fart in your general direction. h/t John Cleese

Tue, 11/18/2014 - 18:47 | 5462807 chubbyjjfong
chubbyjjfong's picture

And that is the key point here.  No one gives a shit! And even more disturbing is that no one WANTS to give a shit. People simply do not understand what is happening to them; the parameters of the system within which they live. The alternative is plain and simple too much for their Ishit filled brains to even contemplate. Ever tried discussing anything macro-economic to any Joe sixpack? They end up wanting to punch you in the face after the first sentence. It is absolute pure evil genius from TPTB. The fucking scum maggot banks and central planners are taking from the people at will, and the people do not even know, want to know, admit, discuss or acknowledge in any way that it is happening. Pure evil genius crimes of humanity of the highest order.  Fucked!

Tue, 11/18/2014 - 22:12 | 5463391 KnuckleDragger-X
KnuckleDragger-X's picture

The people who give a shit are quietly dropping out of the game....

Tue, 11/18/2014 - 22:19 | 5463409 knukles
knukles's picture

Ah, the fun and games at the peak of civilization

Tue, 11/18/2014 - 22:39 | 5463487 Anusocracy
Anusocracy's picture

If you think of morality as behaviors that promote survival in a group, you can see, from their point of view, that those behaviors won't change until their survival is threatened by them. It isn't sufficient that to change would be arguably, or even demonstrably, better, the current behavior must fail in terms of survival.

That's why the belief better the devil you know than the one you don't is so prevalent.

Wed, 11/19/2014 - 04:59 | 5464409 LostandFound
LostandFound's picture

Indeed Sir, this whole thing can go on up to the point that a significant amount of the population cannot feed themselves. Thats when the revolution kicks in, at the minute, we are on a long burn where our purchasing power disappears gradually without the dumbshits noticing until they do. 

Wed, 11/19/2014 - 08:15 | 5464607 olenumbersix
olenumbersix's picture

Both correct, But think EBT

Tue, 11/18/2014 - 18:53 | 5462827 GooseShtepping Moron
GooseShtepping Moron's picture

But the Japanese citizens do give a shit. They keep trying to scrimp and save out of their increasingly scanty and worthless paychecks, trying to keep some powder dry in spite of the inflationary fire hose they're blasted with day after day. Their actions testify to the fact that they do care, it's just that the subject is taboo and no one ever talks about it.

It's kind of like how when somebody asks you "How are you doing," and you instinctively reply "Fine," even though that's very far from being the truth. For some reason we are in mortal dread of answering the question any other way. Just in the same manner do the Japanese not talk about how boneheaded their government is, even though everyone knows it.

Tue, 11/18/2014 - 21:41 | 5463313 mastersnark
mastersnark's picture

No, if they gave a shit, they'd run out of lampposts from which to hang politicians. They are just a thinner version of Americans: happy to go along with whatever the govt says, as long as the internet/TV/cell phone works.

Tue, 11/18/2014 - 22:15 | 5463399 KnuckleDragger-X
KnuckleDragger-X's picture

You can't compare Japan to the USA, two completely different histories and mindsets.

Tue, 11/18/2014 - 22:41 | 5463503 Anusocracy
Anusocracy's picture

Not with the current mindsets.

Tue, 11/18/2014 - 23:24 | 5463747 mastersnark
mastersnark's picture

Dats Raciss!

Tue, 11/18/2014 - 23:49 | 5463868 Jstanley011
Jstanley011's picture

"Can you direct me to the railway station?" asks the stranger.

"Certainly," says the local, pointing in the opposite direction, towards the post office. "And would you post this letter for me on your way?"

"Certainly," says the stranger, resolving to open it to see if it contains anything worth stealing.

-Amartya Sen

Wed, 11/19/2014 - 08:13 | 5464602 rbg81
rbg81's picture

The Japanese economy is shrinking because both Korea and China copied their business model big time, and executed it even better than them.  Plus, they have weird technology and sexual fetishes that can't be healthy.  Lastly, lots of bad karma left over from World War II, especially from their more prosperous neighbors.  

Despite their current woes, the one thing that will save them in the coming century, however, is the fact that they allow almost NO Muslims into Japan.

Tue, 11/18/2014 - 18:21 | 5462727 ArkansasAngie
ArkansasAngie's picture

If Japan goes ...

Well ... I guess we will all be able to see if the FED can walk on water.

Tue, 11/18/2014 - 20:57 | 5463175 hobopants
hobopants's picture

Some of those tiny houses (trailers) go for 30k, that's pretty far from a johannesburg slum if you ask me.

More like a hipster playhouse, especially since most of them are located in their parent's backyard.

Tue, 11/18/2014 - 22:18 | 5463406 KnuckleDragger-X
KnuckleDragger-X's picture

Yep, right now that's what the people they sell to looks like but I see the tar paper shack making a big comeback soon.....

Tue, 11/18/2014 - 22:23 | 5463419 knukles
knukles's picture

You Don't See the Hoovervilles Because They've Been Supplanted by Section 8 Housing
No Bread Lines as They've Been Supplanted by EBT Cards.

All the Evidence and Indica of the Second Great Depression have been Hidden by the Bread and Circuses of the Electronic Transfer Age.

People need to WAKE THE FUCK UP its all there. 
Just hidden in Plain Sight

Wed, 11/19/2014 - 01:26 | 5464161 Aeternus
Aeternus's picture

Try taking a shit in one of those, the compost toilet stinks the whole place up.

Try doing your laundry in one of those, oh wait, no room.

 

http://www.youtube.com/watch?v=Gpzs6m2TbVE

 

 

 

Wed, 11/19/2014 - 01:23 | 5464150 Aeternus
Aeternus's picture

What the author fails to realize/and or point out is that they do not WANT to FIX the eCONomy. This is Agenda 21 playing out in a full fashioned parade of slow kill. Do you hear that sucking sound? It's what's left in your wallet being sucked into the abyss of some dark central bank basement while you take your last breath on some cold polar vortex highway of doom as your cars gastank gauge hits..... EMPTY!

http://www.youtube.com/watch?v=Gpzs6m2TbVE

Tue, 11/18/2014 - 18:16 | 5462702 slotmouth
slotmouth's picture

Sell yen errday and use it to fund short term losses on convex JGB short bets, ride that baby to Valhalla.

Tue, 11/18/2014 - 18:17 | 5462703 DavidC
DavidC's picture

"If and when an economy is as deep in the doldrums as all major economies today are, you can’t rescue it by taking from the poor to save the rich. It’s fundamentally impossible."

Shame that little nugget is lost on the bankers and governments.

DavidC

Tue, 11/18/2014 - 22:23 | 5463422 knukles
knukles's picture

And there ain't enough rich to fund everything, anymore.
The Inconvenient Truth of Math

Tue, 11/18/2014 - 22:55 | 5463583 Anusocracy
Anusocracy's picture

Maybe it's because the rich, who control the government, have squandered everything on their psychopathic dreams.

Wed, 11/19/2014 - 00:34 | 5464020 Greenskeeper_Carl
Greenskeeper_Carl's picture

This was mostly a good article, but this guy is banging the austerity drum, and there isn't any. In order for there to be austerity, that would mean govts are borrowing and spending less. They aren't. Every developed country, including the ones engaged in so called austerity, are still running huge deficits, and their debts are at all time highs. Same with his suggestion that giving money directly to the bottom 90% of the populace to spend with boost the economy. It won't. They will either take that money from one group and give it to another, or create the money out of thin air and hand it out to people to spend. That doesn't work either. Sure, you'll get a nice boost in GDP for a quarter or two, then you're right back where you started

Tue, 11/18/2014 - 18:21 | 5462719 limacon
limacon's picture

The government has failed .

The people long ago disconnected into a separate  , unmetered economy .

See http://andreswhy.blogspot.com/2014/11/economics-of-disrespect.html

 

Will they always land right-side-up ?

See

 

http://andreswhy.blogspot.com/2014/11/roman-dodecahedra.html

or

 

https://www.academia.edu/9373045/Roman_Dodecahedra

 

Tue, 11/18/2014 - 19:37 | 5462968 kchrisc
kchrisc's picture

"The government has failed ."

If government had failed, we'd actually be free instead being encased in a panopticon of tyranny.

An American, not US subject.

 

"Things are going to get worse before the guillotines show up."

Wed, 11/19/2014 - 06:37 | 5464471 The Navigator
The Navigator's picture

guillotines on the way - of course we don't make them here anymore.

From Japan with Samuri blades, a little extra, but with the Yen dropping maybe with our price range.

From France, very expensive, failure rate greateter than 50%, but "origianal"

Fron China, very cheap, but victims suffer longer than necessary, or well, so sorry.

Tue, 11/18/2014 - 18:23 | 5462734 BadKiTTy
BadKiTTy's picture

If Japan shows us anything it is that the game can go on longer than even our worst imaginations conjure up.  They also have show TPTB (as we were reminded in Greece) that people can be subjugated and stolen from practically without limit.  

This is the Hunger Games.  

 

Tue, 11/18/2014 - 18:27 | 5462743 yogibear
yogibear's picture

The sooner Japan has a currency crisis the better.

The US gets a preview into their future.

Tue, 11/18/2014 - 18:28 | 5462749 pine_marten
pine_marten's picture

And then there is the Fukushima debacle.   When the self delusional spell breaks on just what a hideous and intractable problem it is there will be no fixing Japan.  No one will want any food from them.  The epidemic of cancers is just picking up steam.  Birth defects and miscarriages.   The nucler demons loose there are insatiable destroyers of living things.  No economy can withstand an onslaught of deadly radio nuculides. 

Tue, 11/18/2014 - 18:44 | 5462799 heywood2
heywood2's picture

Actually, there is not the slightest evidence of increased cancers or borth defects in Japan.

 

Tue, 11/18/2014 - 19:01 | 5462859 The Blank Stare
The Blank Stare's picture

Not on CNN anyway. Dumbass

Tue, 11/18/2014 - 22:25 | 5463427 knukles
knukles's picture

Ain't on MSNBC either, so there!
Or the NY Times

Wed, 11/19/2014 - 05:12 | 5464419 Skateboarder
Skateboarder's picture

I have personally seen people I know, or heard of relations of people I know, getting (or dying of) cancer over the last three years. Never before was this so frequent. In fact, no one I ever knew got or died of cancer before Fuku.

Your generalizations are misplaced. Look to public datapoints for truth.

Tue, 11/18/2014 - 18:55 | 5462829 css1971
css1971's picture

It's a predicament, not a problem. Problems have solutions. Predicaments don't.

Tue, 11/18/2014 - 18:57 | 5462841 Parrotile
Parrotile's picture

It is illuminating to compare the Western hullabaloo over the Chernobyl incident with the relative deathly (!) silence re. the ongoing Fukushima Daichii "problem".

To the Russians' credit, they fixed their problem pretty quickly, and have had no problems in permitting Western nosey parkers to "monitor" progress. Fukushima? Nothing, apart from the regular press "releases" admitting that their storage capacity is inadequate, resulting in "unplanned release of radioactivity" into the environment.

One wonders whether the silence (in the MSM) has anything to do with US involvement in both reactor procurement and site design / construction.

Wed, 11/19/2014 - 09:15 | 5464747 Son of Captain Nemo
Son of Captain Nemo's picture

To the Russians' credit, they fixed their problem pretty quickly, and have had no problems in permitting Western nosey parkers to "monitor" progress. Fukushima? Nothing, apart from the regular press "releases" admitting that their storage capacity is inadequate, resulting in "unplanned release of radioactivity" into the environment.

Great points P

I've come to the conclusion that as bizarre as all these accumulated events have become since ushering in the NWO, what happened to Japan Magna BSP aside, the moves by the Japanese CB over these last two years were very deliberate and may very well have never happened had March 11, 2011 never happened!

Tue, 11/18/2014 - 18:31 | 5462764 SeattleBruce
SeattleBruce's picture

"Japan’s stimulus has achieved the following: banks get to pretend they’re healthy and stocks rise to heights that are fundamentally disconnected from underlying real values."

Good thing we're not headed down the same path in the good ol' US of A...Uh, oh yeah....

Tue, 11/18/2014 - 18:35 | 5462775 LawsofPhysics
LawsofPhysics's picture

Given the demographics of Japan, "dying" is very appropriate here.

Tue, 11/18/2014 - 18:38 | 5462785 Gurgeh
Gurgeh's picture

Who is John Galt?

Tue, 11/18/2014 - 18:42 | 5462787 Notsobadwlad
Notsobadwlad's picture

I think TPTB see the Japanese people as a sacrificial experiment that is completely disposable.

How else can you explain their role and misfortune in the world?

The unfortunate conclusion that one can probably make from this is that the Japanese people are generally good and honorable and that is why they are being persecuted.

Tue, 11/18/2014 - 18:45 | 5462805 Uchtdorf
Uchtdorf's picture

Lived in Japan for 8 years. Married to a Japanese woman. There is considerable truth in what you wrote.

Tue, 11/18/2014 - 18:49 | 5462811 tired1
tired1's picture

Sounds to me like Fugu poisoning. (hint: it has another meaning to Japanese)

Tue, 11/18/2014 - 18:51 | 5462816 Parrotile
Parrotile's picture

I think you'll find The Powers That Be regard ALL "non-Club" members as sacrificial / completely disposable.

Many "club" members are pretty keen on starting the "Great Disposal" of all us "Useless Eaters" ASAP - gotta "Protect" the Planet, and "Global population is far too great". The Georgia "Guide Stones" (!!) are pretty substantial evidence of this mindset.

Wed, 11/19/2014 - 03:18 | 5464314 Debugas
Debugas's picture

bingo, you've got it right

Tue, 11/18/2014 - 19:57 | 5463025 Matt
Matt's picture

"How else can you explain their role and misfortune in the world?"

Well, they are sitting on a piece of land that is volcanic, prone to earthquakes, and lacks hydrocarbon fuels for one.

Their nearest relatives, the Koreans, instead of trying to integrate with them, they enslaved them and used their women as disposable sex slaves. 

They tried to take over all of Asia, and in return lost what they did have outside their own islands.

In short, the previous generations played their hand poorly, and the current generations are stuck with the consequences.

Tue, 11/18/2014 - 18:42 | 5462791 Joebloinvestor
Joebloinvestor's picture

I hope the autopsy is made public.

Tue, 11/18/2014 - 18:41 | 5462792 ted41776
ted41776's picture

not a bad time to pickup a copy of rosetta stone chinese edition if you're in japan

Tue, 11/18/2014 - 18:44 | 5462803 Uchtdorf
Uchtdorf's picture

Right, and there's not much those Marines (including my son) in Okinawa can do about it...if the Chinese get serious about expanding their territory.

Tue, 11/18/2014 - 18:51 | 5462819 css1971
css1971's picture

Or...

It is the MARGINAL consumer who decides the direction of an economy. If he can afford to buy or not.

Those not at the margin, either can or cannot afford to buy. Simple. Those who have money will continue to buy as they always have. Those without money cant afford to buy. The strength of the economy is decided at the margin. NOT at the average.

Surely this is obvious.

So I have no idea why they throw money at the people at the top. Other than they are in the old boys club/maintaining the status quo etc.

Tue, 11/18/2014 - 19:09 | 5462878 Parrotile
Parrotile's picture

> So I have no idea why they throw money at the people at the top. Other than they are in the old boys club/maintaining the status quo etc.

Exactly the reason. "Us" vs. "Them"

"They" have the necessary connections / family / political leverage to ensure their continued comfortable (very comfortable) standard of living.

"Us" - a VERY few with "useful skills" (to maintain "Their" standard of living) may be worth keeping, the rest - not so much.

The commoditisation / financialisation of the Human Race - reduced to anonymous numbers on the Financial Elites' ledgers. When "They" decide to cull "us" they will do so with no more concern than our killing off ants' nests, or wasp's nests. "Just another problem to be eliminated"

Don't think so? Look back on the last 20 years' "Wars of Acquisition". Now think again.

Tue, 11/18/2014 - 18:50 | 5462820 geno-econ
geno-econ's picture

The Emperor still has clothes, but the middle class and seniors are gradually bieng disrobed.  Japanese are a placid lot until they are not. 

Tue, 11/18/2014 - 18:51 | 5462821 blindman
blindman's picture

well said. living. people must live or die.
if they live that is translated, in the financial
lexicon, as "spending" and performing "work" or
"service/s". without that basic dynamic there is
no culture, society or wealth; merely misery all
around. no amount of monetary manipulation can
replace a true purpose infused with creativity
and simple economy of resources.

Tue, 11/18/2014 - 18:52 | 5462822 ramacers
ramacers's picture

this is just warmed over stuff. valid, but still just warmed over. soon, it won't matter.

Tue, 11/18/2014 - 19:16 | 5462908 Jack Burton
Jack Burton's picture

" Therefore, the sole thing QE stimulus has achieved is a wealth transfer from poorer to rich"

This is something I said, and lots of others did too, when QE began. Just looking at Zirp and QE, it is obvious it is a wealth transfer machine from workers and savers to those long stocks, like the 1%. who, by fact, hold most of these asset classes/\.

Over a Mish's site, this got a few trolls coming out to call me a communist. I was unable to see that QE was rewarding the hard workers and paying off for those contributing to wealth. So I wonder about those fucking trolls now. Do you little liar pricks still throw around your words a mile ahead of both your brains and provable reality?

QE was NEVER meant to do jack shit but transfer wealth to the stock market, to allow the "wealth effect" to juice incomes of the 1%. So, is there anyone left who would deny this fact? Why am I told all the time that a system of Fed manipulation that benefits the 1% is really just good old capitalism and free markets at work. When facts show that QE is communism of the 1% by the 1% for the 1%. Success of QE is that the majority have lost jobs, taken part time work, lost all interest on their savings, been trapped in wage stagnation. WHile anyone whose income springs from holding assets has had trillions added to their value. Not through market productivity, wealth creation, growth, expansion, or any of that. Fuck NO! It has been added by Money Printing and using the new money to juice assets held by the 1%. Oh so simple. No need for a gun to hold people up, just debase their wages, steal their interest on savings, stagnate wages and send the jobs overseas. WHile a roaring stock market takes the elites to every higher heights of unearned income.

Tue, 11/18/2014 - 22:28 | 5463438 Zero-risk bias
Zero-risk bias's picture

"QE was NEVER meant to do jack shit but transfer wealth to the stock market.."

I guess that's the size of it. The irrefutable denial of reality happened at TBTF. At least anyone with basic literacy should know that TBTF really described, papering over cracks. TBTF? Surely that statement is equal to a child playing the game Monopoly and declaring, "I can't lose because it's my birthday", or starting to cry, so we all let the child win. There is no other possible interpretation in my mind.

It was a genius creative use of language to misdirect and obfuscate, allowing for more artistic verse, a la "Stress Test, and downgrading", aluding to the notion of, new rules of play, rationality and firm guidance. While the natural state and under belly of reality is increasingly chaotic.

Always interesting to read your insightful remarks. It is also interesting to hear how your angle is received elsewhere. Very telling.

 

 

 

 

Tue, 11/18/2014 - 19:26 | 5462927 falak pema
falak pema's picture

Economic recession does not mean civilization's or nation's death.

It means death of a paradigm. 

We've survived worse times. Those who are flying fish. 

Tue, 11/18/2014 - 19:57 | 5463028 tok1
tok1's picture

there is a way out.. but no Gov will do it or they have to admit failure.

 

Really they have no choise they need to 

1) move to balance budget (no choice look where devt had got them)

2) there is obviously huge issue with pension payments.. so reforms need to be all targeted at this (forget the sexy 

projects .. more day care)

So how can they do this. Instead of or the rambling about wages ect.. they should simply focus on the issue.

Ie for instance give very large tax relief for people that take in their parents to live with them and cover their cost.

(ie reduced pension but worker gets tax benifit.  Also public works focus on consolidation of cheap accomidation for 

Japanese pensioners that are on very small pensions. Ie rather than brigde to no where ect reform cheap old vacent houses and privde cheap accomidation for old Japanese at low rates..

 

Hospital / medical for old Japanese again combined with accomidation reform can be hospital reform to consolidate 

the number of holspitals in areas designated for old people (which match where the accomidation is).

 

 

And lastly the debt (after balanced budget reform introduced) must be restructured. porb with BOJ coming clean they monetize 60% (bring it down to 100% to GDP)  and the last 100% need to be managed properly.

 

This will allow rates to rise so what funds the pensioners have they can get some yield..

 

This is the hard decisions focused on the kind of ugly.. non sexy issue of dealing with aging population. Bizarly.. they want to focus on expanding the armed  forces and other complete waist of moeny issues.. its too stupid to belive.

 

Whats the problem .. too many poor pensioners requiring benifits.. ok so put the resouses there to reduce the cost of servicing them (build the infastructure to reduce the cost)

 

and the balance the budget.

is  that so hard... hello....

 

 

 

 

Tue, 11/18/2014 - 20:19 | 5463080 NoWayJose
NoWayJose's picture

The picture of 'miserable poverty' is the type of housing that the survivors of the economic collapse will be living in. The McMansions, suburbs, and inner cities will be burned out. For a preview, just watch Ferguson, MO!

Tue, 11/18/2014 - 20:23 | 5463093 Dre4dwolf
Dre4dwolf's picture

Everyone understands perfectly.

But we don't want to starve.

So we keep doing what we been doing.

And we will keep doing what we been doing, till it stops working.

The Fed is there to make sure it doesn't stop working for as long as possible.

The banks are there to rob you till the very end (because they want to build up their supply of cocaine and hookers they have saved in cryo-stasis for apocalypse).

The govt is there to make sure you don't get any ideas about escaping the apocalypse, they want the whole boat going down at the same time, with as many passengers onboard as possible.

 

And thats the story.

 

Tue, 11/18/2014 - 20:39 | 5463119 medium giraffe
medium giraffe's picture

"That is, it’s the same as in Japan. And doing the same can only lead to the same results. A poorer population, a richer top layer and an economy that continues to shrink"

Exactly this.  The extended recession that the Japs suffered was entirely down to the MoF and BoJ stuffing newly printed money into areas that would keep the banks rich to the detriment of everyone else.  It was obvious that the Fed were trying the same trick, as they had no other ideas.  The only real surprise is how the Yen didn't depreciate then, and how the Dollar is not depreciating now.  It's outrageously short sighted - consumer spending stimulates the economy, SMEs make up 50% of GDP, kill them both and what the hell do you expect will happen?  These guys are stupid beyond description, might as well have expanded the balance sheet then buried all of the money down a mineshaft for all the good it has done.  And that depreciation risk is not going away.

There is no way out but down.  And whilst Japan is figurativley dying, the Japanese will actually be dying if nothing is done about that glow-in-the-dark clusterfuck on the eastern coast, though no one gave a shit about dying Japanese when suicide rates when through the roof as jobs evaporated, so we can expect much of the same.  And probably coming to a country near you too in the not too distant (if the rads don't get there first).

Yeah, Louis Armstrong, you were right.  It really is a wonderful world.....

 

Tue, 11/18/2014 - 20:35 | 5463124 garlll
garlll's picture

i'm very stupid, since 2008 we all predict armageddon in japan europe usa but nothing.

only pain for some sheeps, yes i'm stupid my time series do not predict anything, and the  world

will stay in dat way for many time

Tue, 11/18/2014 - 21:29 | 5463267 americanspirit
americanspirit's picture

Within the next 6 months Abe will either

Commit Hari Kiri

Accept an appointment as an MIT professor emeritus

Tue, 11/18/2014 - 21:39 | 5463293 Irishcyclist
Irishcyclist's picture

dp

Tue, 11/18/2014 - 21:38 | 5463295 Irishcyclist
Irishcyclist's picture

By rights Japan should have imploded over a decade ago. The fact that Japan has survived until now is amazing given the mess she was in then. Of course their fiscal and budgetary situation has got a lot worse but she is still holding on. And that is the problem right there.

When Japan implodes and it will implode the economic seismic shock will be all the greater. She will end up not only blowing her own country and citizens to economic pieces, she will take down other country's and the people in those other countries too. It's only then that people will care, but at that stage it will be far too late.

Tue, 11/18/2014 - 21:42 | 5463315 mastersnark
mastersnark's picture

So what you are saying is Abe has to give away free stock instead of gift cards? Makes sense...

Tue, 11/18/2014 - 21:50 | 5463330 MathWins
MathWins's picture

Don't forget to add Fukushima to their list of problems.

Tue, 11/18/2014 - 23:05 | 5463635 bbq on whitehou...
bbq on whitehouse lawn's picture

Thats what i thought this artical was going to be about. Thats something money wount fix. They all will get cancer and most will die before this decade is out. Yes eating, breathing and liveing in nuclear fallout will kill you.
To bad the fallout covers most of the world.

Tue, 11/18/2014 - 22:16 | 5463403 Gort
Gort's picture

How did the Japanese go from being the meanest, nastiest fighters in the 40's, to being the most passive sheep on the planet?  Two nuclear bombs couldn't castrate 3 generations, could they?  The US must have insisted they fluoridate their water or something after the war, seems to be working here too.

Wed, 11/19/2014 - 01:51 | 5464221 cornflakesdisease
cornflakesdisease's picture

Same as Germany; the first thing installed in Japan after the surrender was a FED controlled central bank.  It never left.  Why do you think they buy our treasuries?

Tue, 11/18/2014 - 22:36 | 5463467 AdvancingTime
AdvancingTime's picture

The fact that for so many years Japan could do nothing wrong has made many people immune to the idea it is about to go belly up. Neither monetary nor fiscal policy will adequately solve Japan's problems because they run so very deep.

Continuing to run fiscal deficits only means that government debt is pushed onward and upwards leading to a variety of possible scenarios as to the what the end game will be. Simply put, the fundamentals for Japan are lousy. More on the downward path that Japan is on in the article below.

http://brucewilds.blogspot.com/2014/05/japan-sliding-towards-abyss.html

Tue, 11/18/2014 - 22:36 | 5463469 hairball48
hairball48's picture

Japan ain't the only country dying from too much QE. Amerika should look in the mirror.

Tue, 11/18/2014 - 22:46 | 5463542 yogibear
yogibear's picture

Both Japan and the US are being QE'd to death.

QE to infinity for both Japan and the US. 

Probably a 90% chance the Fed starts QE 4  $125 billion/month in the 1st quarter of 2015.

 

Up until there's a currency crisis. Japan implodes first, then the US.

Tue, 11/18/2014 - 23:17 | 5463703 Yes_Questions
Yes_Questions's picture

 

 

makes one wonder if spending by the plebs is really low on the list of priorities by those who make the list.

 

may their "fortunes" turn to dust in the reset.

 

fuckers.

 

 

 

 

Tue, 11/18/2014 - 23:28 | 5463776 zerohedgejjxxzz12
zerohedgejjxxzz12's picture

I found/watched this video on ytube a couple of years ago.  A man in a black suite walked onto the stage, a spot light followed him, the stage was dark with a black curtain behind him.

He looked around at the audience noticing the average age was not over 45 years old, then he said " I can tell by the majority of  age in the audience, that everything you have ever learned in your life, you probably learned from watching tv, what if everything you learned was a lie? What if they used this tv against you?"

 Has anyone else seen this video? Can anyone find this video? it was rather an eye opener. 

 

Wed, 11/19/2014 - 00:05 | 5463926 Jstanley011
Jstanley011's picture

While you're looking for it, check out Jerry Manders' Four Arguments for the Elimination of Television. Written in 1978, but talk about an eye opener -- it still is...

Mander presents four main arguments, and dozens of corollary arguments, against having television as any part of our lives. Any one of them alone might seem plausible but perhaps overblown, but the overall effect of their combined presentation is overwhelming. I closed the book absolutely revulsed by the nature of this technology and how it has manipulated us. I can anecdotally attest to its ill effects in my case, certainly -- I can recognize thousands of brands but only a few plants. My direct knowledge of the world has been reduced by about 20,000 hours' worth of actual experience interacting with real people, time that I spent instead glued to the boob tube, absorbing hundreds of thousands of commercials....  What I consider to be my natural aesthetic sense has been perverted such that I can hardly look at a man or woman -- or myself in a mirror -- without automatically, subtly judging the person's appearance against an internal metric, a deep and narrow palette of beautiful faces and lithe body parts, implanted by hundreds of thousands of advertising images. This phenomenon subtly cheapens and distorts many interactions I have with people.

...Just scan the table of contents to Mander's book, and you will begin to see the array of influences these forces have in our culture and in our individual minds...

Wed, 11/19/2014 - 01:23 | 5464147 TruthTalker
TruthTalker's picture

The USA to Japan - destroy your currency so the dollar remains king - no?  Then have some earthquales to help you decide!   Now - destroy your currency....

Stealth QE3: Operation Tokyo Twist    http://www.gold-eagle.com/article/stealth-qe3-operation-tokyo-twist

Wed, 11/19/2014 - 01:25 | 5464157 TruthTalker
Wed, 11/19/2014 - 01:33 | 5464179 kappal_toba_dhu...
kappal_toba_dhurr_ne_thook's picture

Japan is far from dying. Recession in Japan is like  boom time in USA.  I go to Japan often.  Comparing the Japan that exists to the Japan that is protrayed in USA media is like night and day.  They are far better off than any Americano can fathom.

Wed, 11/19/2014 - 02:04 | 5464243 MKD
MKD's picture

I have actually read a few articles going back a few months ago which stated that the japanese economy is about 10 years ahead from the eu and usa.so whats happening in japan now is what will happen to the eu and usa.so zero hedge readers you have about 10 years to prepare for the countdown.

Wed, 11/19/2014 - 04:59 | 5464410 RabbitOne
RabbitOne's picture

It is not a question of economies dying. Politicians and Central banks will always find a temporary way to appease the situation with drastic measures. Rather it is the debt excesses around the globe that are increasing day-by-day. One of these excesses will soon trigger the next financial panic. Maybe it will be Argentina going belly up - who knows? The real risk is that during one of these small financial panics it will topple the whole house of cards. That is what we must continue to plan for…    

Wed, 11/19/2014 - 05:22 | 5464431 bliss
bliss's picture

why the whole world keep printing money when it mostly harmful for its citizen,

i truely think it a set for agender 21(REDUCE POPULATION) & NEW WORLD ORDER!

it does not make great sense with all these PRINTING at all

Wed, 11/19/2014 - 06:57 | 5464485 petedanels
petedanels's picture

If in fact Japan's economy is 10 years ahead of us as stated is true, I don't believe that means we then have 10 years ourselves before the crumble into economic oblivion.  I bet it will be much sooner, because in our case we will have had the 3rd largest economy fold right before us, followed by the EU, which Japan doesn't have to whitnes as they will be the first.  Just my opinion.

Wow these are interesting times, I'm truly scared!

Wed, 11/19/2014 - 07:43 | 5464549 Last of the Mid...
Last of the Middle Class's picture

Guess they never heard of the law of diminishing returns. Or they're just too fukishima'd to care.

Wed, 11/19/2014 - 08:37 | 5464662 Raoul_Luke
Raoul_Luke's picture

It is pretty simple, actually.  Deflation is a market force.  A function of supply and demand.  The more you try to avoid it the less market oriented your economy becomes.  And the less market oriented your economy becomes, the more it dies.

 

The end.

Wed, 11/19/2014 - 09:09 | 5464694 655321
655321's picture

As a vassal state to the US, Japan is dutifully playing possum for the USD sake. All else is smoke and mirrors.

Wed, 11/19/2014 - 10:22 | 5464986 numapepi
numapepi's picture

During the hight of QE3 85 billion dollars a month were being printed and used to buy long bonds and long derivatives. Had that money instead been distributed in a national lottery, 85 thousand people a month could have been made millionaires, that would have stimulated the economy with the additional spending and it would have accelerated the velocity of money as well.

While I agree with the premise that stimulus sent to the bottom, as in our lotto example show, the transmission of money directly into the hands of consumers would be exponentially better at stimulating our economy, I disagree with the thrust of the article however, that it would in any way solve the underlying problems.

The problems are regulation and taxation. If the US went back to the regulatory and tax environment of 1923 the economy would follow suit.

Wed, 11/19/2014 - 16:34 | 5466753 Monty Burns
Monty Burns's picture

What you're suggesting would lead to rampant inflation.

Wed, 11/19/2014 - 10:27 | 5464989 numapepi
numapepi's picture

The definition of insanity is doing the same thing over and over and expecting different results. - Einstein.

Wed, 11/19/2014 - 20:13 | 5467683 rickv404
rickv404's picture

"Any stimulus must be directed at the bottom, or it must of necessity fail."

 

What? No "stimulus" can succeed. A "stimulus" is the equivalent of extracting blood from one arm, only to inject it into the other, all the while the body is weakening. Government has no money to distribute to the lower classes to spend. It inflates the currency to provide "stimulus", thereby destroying the value of the "stimulus" to being with. It is necessarily a tax, in other words.

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