Japan's Finance Minister Accidentally Reveals How It All Ends: "War"

Tyler Durden's picture

While this all started with a currency "war," it seems - according to a stunningly candid transcript of Japan's finance minister's conversation with none other than Paul Krugman - that the real endgame here is actual war. Aso remarked that "a similar [deflationary mindset] had occurred in the US in the 1930s. What solved the question? War! Because World War II had occurred during the 1940s and that became the solution for the United States. [We] have to switch [the Japanese] mindset... we are looking for the trigger."

Japanese Prime Minister Shinzo Abe has been the most hawkishly militaristic PM of a generation, shifting from the passive society to an aggressor, beginning around 2013. This has only been emboldened by rising nationalism and escalatuing tensions in the South China Sea.

We note this by way of background as just-released transcripts of a conversation between Japanese finance minister Aso and Uber-Keynesian Paul Krugman reveal perhaps the reality that Japan faces as its economic and social structure collapses...

(Minister of Finance Aso)


During the 1930’s, I remember that in the United States likewise there was a situation of deflation. And the New Deal policies have been introduced by then President Roosevelt. As a result, it worked out very nicely, but the largest issue associated with it is that for a long period of time entrepreneurs and managers of companies did not go to make a capital investment by receiving the loan. It had continued up until the late 1930’s and that is the situation occurring in Japan too. The record high earnings have been generated by the Japanese companies but they would not spend in the capital investment. There are lots of earnings at hand on the part of the corporate in Japan. It should be used for wage hike or dividend payment or the capital investment, but they are not doing that. They are just holding onto their cash and deposits. Reserved earnings have kept going up.


A similar situation had occurred in the US in the 1930’s.


What solved the question? War! Because World War II had occurred during the 1940’s and that became the solution for the United States. So, let’s look at the entrepreneurs in Japan. They are stuck with the deflationary mindset.


They have to switch their mindset and should start making capital investments. We are looking for the trigger. That is the utmost concern.


(Prof. Krugman)


The important point about the war from the macroeconomic point of view is that it was a very large fiscal stimulus. That fact that it was a war is very unfortunate. It was simply something that led to a fiscal stimulus that would not otherwise have happened.


In fact, the story in the 1930’s was that the New Deal, Roosevelt backed off the fiscal stimulus in 1937, because then, as now, there were many calls for balancing the budget. That was a terrible mistake. It caused the major second recession.


Yes, obviously we are looking for ways to achieve something like that without war.

Obviously... though war would be handy eh? All that ammunition manufacturing and no inflationary pressure as everyone of them gets shot away. What could go wrong?

So here is  74 seconds of pure Krugmanism from the mouth of the man himself - Keynes 1939 (pre-war) radio address on the beginning of The Grand Experiment...

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Herd Redirection Committee's picture

I say we send everyone who either calls for war, or supports a (new, hot) war, be sent to the frontline with the first dispatched regiment.


Arnold's picture

Hey, does clerk / typist pay well?

Pandelis's picture

and Krugman reply?

He us a member of the Group of Thirty



Squid-puppets a-go-go's picture

war starts with the tacit support for war..... yes im looking at you, krugman you fucktard demon from hell

0b1knob's picture

One thing almost always forgotten about the history of WWII is the transfer of gold it triggered.  Congress passed a neutrality law that allowed the sale of weapons to England and France but only if the purchases were paid for in gold.   From the start of the war in 1939 until the US entered it years later there was a massive amount of gold flowing into the US.   It remained in the US after the war and was the collateral for the post war boom.

NoDebt's picture

Perhaps lost amongst the war talk clutter is this little gem:

"because then, as now, there were many calls for balancing the budget"

Who the hell is calling for balanced budgets??  Sure, some may, on rare occasion, SAY they want it but there's absolutely ZERO emphasis behind it and NO action.  We're still running $400 billion a year deficit in the US and everyone is slapping eachother on the back congratulating themselves that it's down from a trillion a year.  So what the fuck is this balancing the budget strawman?  


Vampyroteuthis infernalis's picture

Mmmm yes, Japan has one of the oldest populations in the world. Are they going to send grandpa to kill the Chinese? Ha ha ha.

Stuck on Zero's picture

Bankers, lawyers, and politicians start wars. Nuff said.

Seeing Red's picture

Don't forget Popes and their ilk.

VinceFostersGhost's picture



Accidentally Reveals How It All Ends: "War"


All Wars Are Bankers' Wars


old naughty's picture

Nothing happens/ed accidentally...

So "Taro, Taro, Taro" is releasing (not leaking) info from right under our noses, to right before our eyes, no?

Quesion remains, what would Japan do/get?

A virtual cover for fuk-u-Rama (likely the most deadly aftermath for the Land of the Sun)?

As for the rest of the world, check out PCR's warning yesterday.

ilion's picture

Vipro Markets who is providing spot FX and precious metals trading recommended it's clients this week to put some funds into physical gold as the world will not be able to avoid serious military escalation and social unrest. I respect the people who actually tell the truth and don't lie.

aPlayer's picture

Fair reco but where exactly should I hold this physical gold? I mean I can't hold it in the bank because banks will be closed when war breaks up. I can't hold it also at my house because I might have to leave the house. 

xythras's picture

They might let themselves lose the war, and thus cut the social benefits to all those old japanese fucks. Starve them, let the chinese bomb them.. and voila.. balancing the budget.

teslaberry's picture

well the japanese conquere the republic of chinese army pretty easily , in fact there was so little chance of winning most of that army retreated after a time. 


most chinese peasants died from starvation, massflooding , and other non direct war related killing by japanese. 

the japanese already had occupied some of china since 31. and the ensuing invastion in ww2 saw far greater losses of chinese lives than japanese, even though the japs were eventually pushed out. if you count chinese peasants who died, the nubmers are pretty staggering. 


war is not about numbers of people, it never was. it used to be about nubmers of able bodied yougn men, but now it's barely that anymore. 


how does the u.s. acount for less than 5000 deaths in iraq over 10 years?

the war machine is about information and  weapons nowadays, not about superior numbers of able bodied men.


occupation on the other hand always requires bodies. i suspec that the real ww3 won't see too much in the way of occupation, as much of the areas of concern will be totally devastated . it most certianly will be far deadlier than ww2, better weapons and 3 times more people on the planet and a greater % of those people more than ever are living in cities. you couldn't imagine a better settup for a destructive war. 


New_Meat's picture

In many ways, the Japs ran out of bullets before the Chinese ran out of people.  Not that Mao minded in the least. 'cuz he kept up the killing in the next decades.


- Ned

{funny how that "Forward" thingie keeps coming up}

strangewalk's picture

China vs. Japan--One child, precious darling little emperors mounting human wave attacks against senile, octogenarian manned machine gun nests. 

Winston Churchill's picture

$6tn+ on a GAAP basis.

Common core math much ?

East Indian's picture

What was Keynes' response about accumulating the barbarous relic? He didn't insist US should have accepted paper money instead?

RiverRoad's picture

"the tacit support for" War (with an actual name attached to it) will come when the central bankers decide it is Time for a War.  Until then we will have Terrorism.

The Saint's picture
The Saint (not verified) RiverRoad Mar 26, 2016 5:54 PM

<Go to War or

<Go to Mars

Both are expensive and will fill national pride.  One will kill thousands if not millions of people, the other will kill just a few people.  Take your pick.

Arnold's picture

Sorry Simon Templar, you present non choices.

Mine was a down vote.

Winston Churchill's picture

That was my 'Uncle' Roger growing up.

He is no Roger.

The Saint's picture
The Saint (not verified) Winston Churchill Mar 26, 2016 8:02 PM

And, Sir, you are no Winston Churchill.

Manthong's picture




Woman: Mr Churchill, you are drunk.

Churchill: And madam, you are ugly. but in the morning I will be sober and you will still be ugly.


Travis M Sawyer's picture
Travis M Sawyer (not verified) Manthong Mar 26, 2016 10:01 PM

Woman:  Churchhill, if you were my husband, I'd poison your tea....


Churchill: Mam, if you were my wife, I'd drink it...........!

TeraByte's picture

Woman: Have you ever looked yourself in the mirror Mr Churchill.

New_Meat's picture

Man: Mr. Churchill, I don't smoke and I don't drink and I'm 100 per cent fit

Churchill: Sir, I smoke and I drink and I'm 200 per cent fit.

Tall Tom's picture

Sorry Simon Templar, you present non choices.






We are going to fucking War. It will be an Extinction Level Event.


And you, in all liklihood, will die as a result.


You may not like the choice.


I'd rather go to Mars, personally. Of I could then I would be on that first spacecraft to leave this wretched place.


I do not like the choice that I am to die in a War.


Eh...But everybody has got to go sometime.


YOU DO NOT HAVE A CHOICE. So War is a NON CHOICE. And as there is no political will to go to Mars then we shall die as a result.


Aren't you happy that you SUPPORTED the MIC as it was YOUR SUPPORT that allowed for this outcome, Arnold.


Financial support is SUPPORT.

Financial support is SUPPORT.

Financial support is SUPPORT.


Perhaps you should have supported Missions to Mars instead?


No worries. It is far too late.


Soon you will have no worries...at all.

Parrotile's picture

So, you're saying that now might not be the best time to rebalance the risk on my investment portfolio?? :-)

CultiVader's picture

Jeez, Tom. Lighten up already.

Tall Tom's picture




No. I will not lighten up. You need to understand it and have no doubt.

harrybrown's picture

i'll choose the 3rd option.... neither

Tall Tom's picture




War has already been chosen, barrybrown.


Life on this planet will go extinct.

tricorn teacup's picture

I'd like humanity to go to Mars, but not as a government project.

Seek_Truth's picture

Mars is the Roman god of war.

Therefore- much of humanity already has gone to Mars- and keeps going there.


Tall Tom's picture




If you want to see what Earth will look like after a Nuclear War then you need look no further than to Mars.


Mars is aptly named.


It demonstrates the result of waging a Global Thermonuclear War.


There is no such event as a limited Nuclear exchange when opposing belligerents are armed with Nukes


It will escalate.


There is NO DOUBT that we will use Nukes. We have done so in the past thus we will repeat it.


There is no hope in the World for humanity's survival. None.


We will go to War. It has already been foreseen.

robobbob's picture

I think you're a little pessimistic. have no fear. people wont go extinct. the elite have deep and vast underground bunkers beyond anything seen in the cold war age. 

with food and supplies, they can last out any man made disaster.

however, humanity's only hope is that the Guards the elite have to protect them wake the F* up, kick them out to die in the wasteland that they created

Chuck Walla's picture

War is only "unfortunate" if kills or maims one, not if one profits from it. I assume Krugman and Soros have their positions on, time to promote the result.



Miles Ahead's picture

Well, regardless of who won the last debate on Capitalism in an earlier thread (I did!) one thing is for sure...

... whatever it is you want to call it that WE have, the above article is how it all ends.  So the earlier thread - while interesting - is moot.

Orc from Mordor's picture

You are right, mate, but you're mistaken: it's you who'll be sent to the frontline, not them.

French Bloke's picture

It'd be interesting to see if all of those newly welcomed (over the last 50-60 years) immigrants count themselves as British (or whichever western "civilised" nation took them in) if conscription is ever reinstated... It won't be a whites only war next time (within Europe, if you exclude the Indian SS division that was based in France. Seriously - google it!).

I actually don't think it'll be between nations next time around. It'll be predominantly, the indigenous Europeans against the immigrants on their own doorstep.

Winner takes all but the zionists will profit nontheless.

Arnold's picture

Here in the US, the occasional push to have the draft for women as well as young men is gaining momentum with every push.

Heaven help any opposition to menstruating, college age bitches from the hood.

(Or menstruating college  aged young men, just to be fair).

Parrotile's picture

Well, I'm a bit long in the tooth for frontline duty (even by current Ukraine standards), but I WOULD be expected to help out "behind the Lines" should Australia get involved (and you KNOW they'd be VERY keen - we DO love our Wars, Down Under!). I better bone (!) up on Battlefield Medicine I suppose . . . :-)

Proctologist's picture


I say drop them behind enemy lines.

We'll tell them to think of it as money paradrops.

g&#039;kar's picture

"I say we send everyone who either calls for war, or supports a (new, hot) war, be sent to the frontline with the first dispatched regiment."


and their 18+ year old offspring...men, women or whatever falls in between

Frankie Carbone's picture

That includes posters here, correct? No deferrements for any reason whatsoever. If you're a chickenHawk, then you're cannon fodder, whether you like it or not.