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Japan Shocked To Find Abenomics Is Destroying Its Middle Class
In central planner “mission accomplished” news, the wealth divide in Japan is growing under Abenomics and middle class citizens are at risk of falling into poverty, The Japan Times says. Despite nightly sound bites from Kuroda, Aso, and Abe himself designed to assuage fears that the country’s gargantuan monetary experiment may yet fail to pull Japan out the deflationary doldrums, some people are getting impatient as the number of households on welfare continues to rise as does the number of nonregular workers. This comes on the heels of the rather amusing news that the country's Labor Ministry had fabricated a year's worth of data on wage growth (it turns out there was none) and after countless warnings from us that the PM's policies would end in spactacularly bad fashion (see here, here, and here for instance). Here’s more:
According to Akio Doteuchi, a senior researcher at the NLI Research Institute, what is threatening people here is that, under the current social structure, virtually anyone in the middle class is at risk of falling into poverty.
“It’s like walking in a mine field. Many risks lie ahead of you,” Doteuchi said. “Even if you are in the middle class, if something unexpected happens, you could slip into poverty.”
Such risks could include contracting diseases such as cancer and being unable to work, the failure to land a job soon after graduation, or an ill parent who needs looking after.
The big problem in Japan is that there are few social safety nets for such situations. In the past, workers had been shielded by the guarantee of lifetime employment at companies. When they retired, they were supported by family members, Doteuchi noted.
But now, there is an increasing number of nonregular workers, particularly younger ones, whose financial situations are unstable. More and more single-person households are vulnerable to serious health problems.
Data back this up. According to labor ministry figures announced April 1, the number of households living on welfare hit a record 1,618,817 in January. This figure has been on the rise for the last two decades.
The country’s relative poverty rate has also edged up over the last 30 years, especially with single mothers and fathers raising children, although the latest data are for 2012.
Meanwhile, the rich are getting richer (as they are prone to do anyway but especially so under monetary policy regimes explicitly designed to inflate financial assets).
On the other hand, data also show that the rich became even wealthier under Abe’s tenure.
Their numbers and the amount of their assets surged in 2013 and are still rising mostly due to sharp gains in stocks triggered by the Bank of Japan’s aggressive monetary easing, which started in April 2013, experts said.
According to the Nomura Research Institute, the number of wealthy households jumped 24.3 percent, with the amount of their total financial assets rising 28.2 percent in 2013, compared with 2011 figures…
Households on average are believed to have a majority of their assets either in bank accounts or in cash. But the wealthy hold risk assets such as real estate, stocks and bonds — assets more likely to grow in value faster than mere savings accounts, Miyamoto said.
Of course the real punchline when it comes to the Japanese QE experience is that the so-called “wealth effect” — which certainly makes the wealthy wealthier but exactly how far down the benefit ultimately trickles is up for debate — is on steroids because not only is the central bank helping to push up the prices of the financial assets held by the rich, the BoJ actually won’t let them fall, as we recently discovered when it was revealed that the bank intervenes in morning trading when sentiment seems less than euphoric. In other words, they are more than “supportive", they have openly rigged the system, and we don’t mean in a kind of “behind the scenes the market is rigged by HFT firms that never have losing trading days” type of way — we mean in a blatant “we’ll print money and buy every single ETF that trades if we have to in order to ensure that stocks don’t fall” type of way. But we guess the fact that this is increasing the disparity between the haves and the have-nots is just further evidence that, much like poor people in the US, Japan’s poor similarly don’t understand Janet Yellen’s extolling of the virtues of having assets.
Here’s The Japan Times again to sum things up:
“Abenomics has boasted economic strength, telling people that higher economic growth will shrink the gap between the haves and have-nots via the trickledown effect,” Doteuchi said. “But is that really true? I think not. Solving inequality is the way to improve the economy.”
Indeed.
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This one falls into the "no shit !" category...
The report below details all full-time job and nearly all population "growth" in the US is taking place in the 55+ and 65+ year old segments...I'm pretty confident it is far worse in Japan.
Employment Train Wreck - An Economy that Needs Ever Fewer Workers and Simultaneously Needs Ever More Consumers?!? But All Full Time Job "Growth" is Taking Place in the 55+ and 65+ year old Segments...Collapsing the 16-54 year old American Core.
http://econimica.blogspot.com/2015/04/employment-train-wreck-economy-that.html
Im shocked, SHOCKED to find gambling going on here!
Abe, you can't print your way to country-wide prosperity. (Listen up Yellen!)
You mean a centrally planned economy is not thriving? I am shocked.
'Krugman Does Japan: MOAR & HARDER'
Sounds like a Pr0n DVD I care not to view!
Central banks creating bank notes out of thin air doesn't create wealth and prosperity for all?
File under Wealth Defect
Sadly, I used to view the Japanese as being a smart group of people in general
I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.globe-report.com
Duh, I see many "unexpected" events in our future...
Golly gee friggin' whiz, that's a complete surprise and totally unexpected......
Japan: Yet another country in which there has been no class war waged, yet the rich still seemingly keep on winning every battle waged against the masses.
nobody saw this coming!
So which ETFs should we front-run?
Now Japan has classes so the word is correct.
You really have to wonder about these 'economists' or any sentient, supposedly intelligent person that wonders why people with few resources do not spend, spend, spend or borrow to spend, spend, spend.
There is benefit to the average Joe-san....if he has a pension it might meet it's 7.5% (on average) assumptions if the central banks rush to hyperinflation fast enough.
Americas future
but but Paul Krugman has been advising japan ...
lol
Such risks could include contracting diseases such as cancer and being unable to work, the failure to land a job soon after graduation, or an ill parent who needs looking after.
The U.S. crossed this Rubicon over a decade ago. It looks like the FSA is looking to start a Japanese chapter.
Aggressive Monetary Easing = Counterfeiting by the way, no matter how one phrases it.
rule #987: pretend to give a shit
Three lost decades - trifecta for Abe!
Yes, the key is to solve the problem that you've created.
"Janet Yellen’s extolling of the virtues of having assets."
what an absolute out of touch moron ... last year -
Four Building Blocks of Opportunity
"The third building block of opportunity, as shown by the SCF, is ownership of a private business.18 This usually means ownership and sometimes direct management of a family business. The fourth source of opportunity is inherited wealth."
wow, why didn't i think of that as a poor slob living from payday loan to payday loan? start a business or inherit a lot of $$s??
http://www.federalreserve.gov/newsevents/speech/yellen20141017a.htm
What an absolute turd. She's been an "academic" and government employee her entire life. Makes me sick these turds lecturing people about starting a business when they wouldn't have a clue how to start or run one if they had to in order to save their own life.
...I use the term "she" loosely.
"shocked" my ass. They are doing the same thing to us. It is the nature of fiat. Fiat is currency because of legal tender laws. They violate the 5th amendment. They were stuffed down our throats with a court packing scheme. Fewer than 1 in a 1000 even know about the case. http://www.thetruthaboutthelaw.com/they-make-you-use-money-that-is-backe...
The average Japanese is shocked? I thought they will thank for it.
Time will correct this error.
I thought the Japs were a proud people?
You fear China, but embrace Satan?
I don't understand.
Does the idea of Theft from the elites ever enter the minds of the presstitutes anymore?
Japan has been greatly romanticized throughout history as some exotic land of mystery and wonder, in reality it's been nothing but an island of half-starved peasants ruled over by violent warlords fighting each other what little arable land was available. The Exception being for this brief time in history that Capitalism brought more material wealth food and prosperity than the nation had previously known. But as the Buddhist saying goes: “As in the beginning, so in the middle, so in the end.”
BOJ, FED, BOE, ECB will drive the asset prices ever higher without value ... we know this. Wake up fucking sheeple because it is the same as saying ...
BOJ,FED,BOE,ECB will drive more and more at the other end of the scale into poverty. Same statement!
Message to the sheep now ...
Maybe you will be lucky for a decade or two but in the end the expansion of the poverty class will eventually engulf more and more like a creeping cancer.
This they openly admit too by the above but it is not how they are going to tell you for fear of being lynched today.
Go on central bank, state it as I have then lets see how fast you can run with nowhere to hide.
JAPANESE HOUSEWIVES DUMPING YEN FOR BITCOINS AND BEER CAPS
Abenomics bought for 12.3 trillion Yen (27 USD) by Marvel.
Source: www.financialpaparazzi.com
Im shocked that they're shocked. Liars lie about everything and when they are confronted with their lies they are shocked that their lies aren't working. The fact that Central Banks can PRINT $,¥,£, or whatever to buy stocks, is criminal in itself.
It will be too late when the masses figure out that by allowing this to happen that the top .0001 will own everything and everyone. Then they'll get their media shills to tell their people its someone else's fault and they have to go to war.
What kind of fucked up, bought and paid for government allows other Central Banks to purchase a countries companies with paper printed out of thin air. In reality if you wanted to control any nation the Central Banks could become majority shareholders in a company strip it of all its assets and bankrupt it.
I'd be shocked if in 10-20 years this isn't the case. Or they inflate stock markets and pull the rug. The Central Banks can just print more after the next big crash. To "Save the world" one more time. Wash, rinse, repeat.
those in control of information and the money system look after their own.
Rather than the Japanese people rioting their bowing their heads while being rape by the bankster directed Abeonomics.
Years ago they would have been rioting in the streets.
How about calling what it is.
Bankster rape-o-nomics.
DUH!!!!!!
Obviously this calls for more QE!
Traitors to the human race come in many shapes, sizes and color ... however, these days they are most frequently bankers (or bankers' puppets) and think of themselves as "elite".
"the number of nonregular workers"
This pattern of employment is sweeping the world. In Britain, the new concept is the "zero hours" contract. An employment contract you sign that puts you on call to your employer, but offers no compensation for your being on call. You are guaranteed no set hours, your job is to give up any other employment, and sit home everyday waiting for your employer to call and order you in to work. You can see that being under contract to an employer that guarantees no set hours, but only the prospect of hours when needed.
Millions of British people are seeking work and employers more and more refuse to offer anything but the "Zero Hour" contract. You get no pay for waitng, you can't work another job because you must be on call, and you never know how much you will eran in any given week, month, year. The British government praises the new inovative "Zero Hour" contract as a JOB CREATOR.
When Britian brags of creating mroe jobs than the regular EU nations, this is what they mean. They create more ZERO HOUR contracts. If you work 1 hour a week, you are EMPLOYED in Britain.
In other European countries such contracts are called "garbage" contract. They are also "popular" in the US especially in services like private daycare or fast food. A job without pay. It is all set up to manipulate employment numbers in addition to other tricks. The job unit should be defined as monthly pay to cover minimum living expenses for family of 4 at given locality.
Under such descent criteria unemployment would be 75% or more.
All the so-called jobs are subsidized by worker families (their income,savings,retirement) or local or national government to cover cost of being employed (subsistence, lodging,transport). Millions effectively work for free. They are slaves and do not even know it. Such low pay is a disgrace and direct subsidy to gluttonous corporations, the truth that is being suppressed
I've read of a substantial bit of Japanese manufacturers leaving China to come back to Japan on account of the cheap Yen. No mention of that here.
Whether by design of TPTB or not, the peasant class that rose into the working class and then into the Middle Class, is being reduced to peasant status in all of the "developed" nations.
The former system of feudalism, with lords and ladies having wealth and political power, and serfs effectively owned by the lords and ladies and tied to working positions on estates, is being reinstated. Workers' rights to bargain collectively, and their legal protections from unreasonable exploitation in working conditions, are being removed - either by "right to work" legislation or by the removal of employment opportunities from their places of residence to states or countries with little or no worker protections and low wages.
The "Golden Age" of working people in Europe and North America that began with the Industrial Revolution that needed labor for mass-production factories and spawned the Middle Class, is now coming to an end.
Even those who are fortunate enough to have jobs are now reduced to the status of "Tax Serfs" and "Payment Serfs" enslaved to the Finance Class who have fed easy credit to governments and individuals and then provided "bail outs" (more debt) to bankrupt governments.
Most of the governments in the developed world have actually been bankrupt since the 1970s, but fiat money-printing and easy credit allowed governments to maintain the illusion of prosperity and economic progress. It is easy to look prosperous when you have unlimited credit and are willing to spend no matter how much your debt level increases. It is clear that few governments can ever hope to pay off their accumulated debts, let alone meet unfunded pension and benefit-program obligations. But central banks contiinue to provide funding to these bankrupt governments. Central banks are now buying government bonds and holding them at effectively zero interest rates to conceal the hopeless indebtedness of governments and to allow those governments to continue to spend far beyond their means.
Central bank QE is being used to maintain stock and bond markets at levels unjustified by fundamentals, in a rigged conspiracy wiyh stock exchanges, Wall Street banks, regulators, and Congress. There is an increasing divergence between the financialized trading economy and the underlying world economy which is falling into recession. There is increasing disparity between the wealth and income of the richest few percent of citizens and the rest.
Multinational corporations have gained a position in world power that is superior to governments, by buying politicians and being liberated from government power by International Trade Agreements. TTP and TTIP represent the latest advances of corporate power with international trade tribunals that will over-ride and punish governments that pass laws that limit corporate activities or profits.
There is a serious question as to how long central banks can continue to issue fiat currency to keep bankrupt governments afloat. Some commentators speculate that central banks will keep government debt instruments on their balance sheets as assets and never sell them off into the markets, and never ask for repayment of principal sums. This is an effective stop-gap strategy, but the question remains how long confidence in fiat currencies will remain. If exporters in other countries refuse to accept fiat in exchange for exports, the fiat system will be shaken. The petro-dollar system has served to uphold the trading value of the dollar and its status as world reserve currency, but the petro-dollar system is under threat as more oil exporters begin to accept currencies other than the dollar. So far, military invasions and overthrowing governments that dared to sell oil for currencies other than the dollar have been fairly effective in maintaining the dollar's status, but nations are increasingly moving to exclude the dollar from their trade relations. The AIIB is the latest assault on the dollar-based trading system.
The problems of Japan are instructive since Japan has been using QE for longer than the US, and the Yen does not enjoy the international trade power that the dollar has had. Even though the BoJ is willing to purchase and hold ALL of the Japanese governments T-Bills, thus financializing the Japanese deficits, the economy of Japan is sinking along with its trade and financial surpluses.
It seems fundamentals do matter, after all.
In the developed world, governments have maintained the illusion of prosperity through deficit spending. QE has supplied the funds to cover the deficits. QE is pretend money supplied to governments pretending to economic health. As the Main Street economy crumbles and employment earnings crater, increasing numbers of residents survive on government handouts, and government deficits soar. How long can fiat printing cover these deficits and the country's international trade and financial deficits? If all major trading nations continue to use what is essentially the same fiat-generating central bank strategy, then the fiat game may continue in spite of falls in the stock, bond, and derivatives markets. But it remains a confidence game, and loss of confidence in any particular currency or market could have major downside consequences. The governments in Europe and North America have prepared for public unrest with militarized police forces, prepared concentration camps, diminished constitutional protections against search, seizure, and arrest, and politicized courts.
The members of the working classes should prepare to get used to diminishing career prospects, and to forelock tugging.
Welcome to America, aaaaaaaaafukkkkkkkkkkkk
I can fix it for you Japan It is the same thing that will fix it for America.
Ignore me to your own peril.
Here we go are you and all of ZH ready for it.
Silver certificate bills each and every one.
No need for applause.