That was a good video Apis. The video that I posted above might have taken place in the past or in the future. And before you roll your eyes remember that the population of Japan is shrinking. In 2100 the population might be as low as it was in the Edo period.
Wolfram alpha.
Imagine Japan with a agrarian population protected by robot weapons 90 years from now .
[quote=Mots]I agree completely with Berman that Japan is advanced and on the road to a sustainable new paradigm. However, 1. most (ie big city) Japanese are pessimistic and dont believe this themselves (because they are thinking like Americans and unlike their rural cousins do not appreciate their society's strong points) and 2. Japan will go through wrenching changes to settle their debt issue. But this is a small thing compared to what they have endured and they will deal with an economic collapse much better than other countries.
I lived in Japan 4 years during the bubble period and live their part time now. I am building a home in a next paradigm remote island community there and invite others to join me. If you are willing to live in a world without drugs, without guns, where you are expected to engage with and care about your neighbors, where the people trust, love and adore their federal government much, much, much less than Americans do but instead have the best reasons historically to avoid a despotic central government, and where the population is declining and good agriculltural land readily available, where the local government strongly will help you get and use agriculture land, and where the infrastructure is the best in the world, then please consider rural Japan. There is more to life than worship of an exponentially increasing / consuming economy (as members of this blog well know), rural denizens of Japan have already figured this out, and are quietly and humbly progressing in the next paradigm now.
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ha! where do i sign up! Does rural Japan need a Food Safety/Animal Health Specialist/Quality Assurance Specialist/Microbiologist (Avian flu certified!)/ Industrial electrician.
Is it warm there year round? Whats the downside? Im getting tired of Canada. Too much like the US these days. No offence of course. Its the system, not the people.
Here is a relevant excerpt from a report I wrote for Chris Duane's silver group:
"Many Japanese (particularly in the countryside and Osaka area, but not so in the cities/Tokyo area) seem very aware of the coming economic calamity. I have been buying /importing gold and silver for a few friends in Osaka. However the first response of most people outside of this aware group (who are mostly CPAs/economists and/or deal with foreign trade it seems) is to exchange their yen into dollars because “don’t I know that the dollar is the reserve currency” and therefore a safe haven? That memo has not been circulated yet it seems.
Democracy and fiat money: I searched out an old friend who is a high ranking bureaucrat in one of the national agencies in charge of guiding the country and reviewed how people inside the government here view things. I learned that continued economic growth is expected in the other counties of Asia (Vietnam, Burma, Indonesia) and thus economic expansion can proceed as in the past. Furthermore the national debt “is not a problem” because “after all, that is held by the Japanese people themselves” and is not subject to market forces.
Another interesting point was that only recently have the Japanese people experienced real democracy (alternative competing directions to vote on) and they strongly decided to vote for printing fiat currency to stimulate the economy. The people voted specifically for inflation.
I suppose that much unhappiness will result from resolution of the internal debt (BUT externally, Japan is the biggest or second biggest creditor in the world), However, the solution will become another rather small event in a long history punctuated by successful severe responses to evolution of western culture.
I understand that this money printing was done in the early 1930's. Why arent the pundits reviewing this cause-effect history, if this is NOT a new thing? I understand that the last time Japan printed money to get the Yen way down and export more they did not experience Weimar Germany inflation but instead importing countries got upset. Isnt this effect on other export countries a more important factor? Why is Japanese history ignored and why is everything about Japan understood from the viewpoint of shoehorning Japanese acts into German and US history perspective instead?
While I am largely in agreement with Berman’s analysis of how the US has lost its way I am bemused by how he falls into the trap of using Japan as a screen upon which to project the country’s past, present and future as everything that the US was not, is not and will not be. There is a receptive audience both in Japan and abroad for this kind of well-meaning Orientalism that has more to do with magical thinking than reality. Perhaps this is not surprising in light of the fact that Berman freely admits he has only a glancing familiarity with Japan. Pace James Kuntsler’s "world made by hand" visions for Japan’s future, I see things somewhat differently.
Japan’s unwitting genius was to follow John Michael’s Greer’s advice to “collapse now and avoid the rush”. Well, perhaps it hasn’t actually collapsed yet but, rather, stumbled into its own version of a steady-state economy. This has been possible against a backdrop of issuance of stupendous amounts of government debt and readily available imports of affordable fossil fuels and food.
The world is a very different place compared to what what it was 20 years ago when Japan’s genteel decline was emerging as a chronic condition. Now in 2013 the JGB market appears to be entering into a Bassian endgame. As well, with peak cheap oil well and truly behind us, Japan having as it does to import something like 99% of its oil looks vulnerable. Similarly, as climate instability worsens, Japan’s need to import approximately 60% of its food (by caloric value) puts it at real risk of food shortages at some point in the not necessarily distant future.
In the Q&A Berman is called out on his failure to address the ramifications of the ongoing Fukushima disaster. He has the intellectual honesty to acknowledge the Japanese socio-cultural traits that were responsible for making the accident possible in the first place and the utterly dysfunctional (on all levels) response to its aftermath but then bats the issue away by dismissing as another whole talk.
Well indeed it would be. A talk in fact that would go some way to invalidating most of his romanticized vision of Japan’s future.
Re Sugarandfat: "But what I don't understand after reading this article is why (if this is correct) stimulate through the banks, if they're concerned all the new money will get caught up in the financial sector? Why not just pay it to people directly, in the form of a universal cost of living allowance or similar?"Why the banks? Well, look who's supplying the stimulus – the BOJ! It's a bank and despite all the rhetoric, it's sole role in life is to look after Japan's banking sector.
It's really just like the US Federal Reserve. Despite all the bleating about its "dual mandate" (price stability and full employment), it's real function is to look after its member banks. Everything else-- and I mean by this everything else – is twaddle. Or, more accurately, a smokescreen. Thus Stock Markets and Wall Street bonuses are at record highs at the same time as is enrollment in food assistance programs. What's not to understand?
It's exactly the same as in Japan. While the Japanese government may want to "cure" deflation, the BOJ is 100% committed to the health of it's financial sector. Period. Therefore, any fresh money is going to the banks. End of story.
Maybe they'll "lend it out" to the public. Ahhhhhhhhhhhhahahaha! Yeah right. I'm betting it's headed straight for the Nikkei. Time to load up on Asia-Pacific mutual funds.
Because simply printing currency does not create wealth or prosperity.As Chris and others have pointed out countless times, simply creating additional units of currency (not the same as money) will not by itself create a sustainable and growing economy.
In a debt based monetary system, central and commercial banks can only create additional currency if someone is willing to borrow from them.
If the only reason anyone, either on the public or the private sector, wants to borrow is because they were enticed to do so by the central planners low interest rate policy and outhright debasement of the currency, no good thing will come from that in the end.
The quantity and the price of money should be determined by the market participants and not by decree and simply giving away more units of currency to companies or households would only create inflation in the medium/long term.
@Carlos P re: "The quantity and the price of money should be determined by the market participants and not by decree and simply giving away more units of currency to companies or households would only create inflation in the medium/long term."This is exactly correct. "Loaning" it (at near-zero interest) to banks is thus ideal. It enriches the financial sector without significant spillover into the real economy. Thus the bankers continue to get eight-figure bonuses and equity holders make double-digit gains, while ordinary savers get zilch and millions are forced onto food stamps.
One could almost believe that enhancing wealth disparity is the whole point of the policy…
Interesting endeavor you have embarked upon their Mots. I would be lying if I said it didn't have some appeal to me. I too lived in Japan in the late 80s and had the opportunity to travel all over rural Japan, from Hokkaido to Kagoshima, it is (or was and perhaps still is) a beautiful country with a fascinating culture. For the last 20 some odd years I've been working for Japanese companies and remained a (middling) student of the country. But I've mostly lost touch with the rural part of Japan dealing as I do now almost entirely with people in Tokyo who are ever more driven to a frenetic state of activity to stay afloat. It saddens me, truthfully, because when I worked in Japan during the bubble, my colleauges were much more open and honest and knew how to laugh freely and have a good time. They seem much more "nose to the grindstone" than before.
Anyway, I have dog in this BOJ QE fight since I work for a Japanese trading company that does business all over the world. I wonder what impact this will have on my business. If the Japanese people don't trust their currency, then I assume Japanese corporations will adopt the same mindset and a) stop repatriating profits to Japan and b) start investing more heavily in tangible assets, such as land, equipment, means of production in other countries. But they will have to do the latter quickly as their currency deflates. Unfortunately, I have experienced first hand the Japanese difficulty in making quick decisions. Shackled by the 根回し (consensus building) syndrome, they develop analysis paralysis and end up passing on opportunities. It will certainly be very interesting to see how this plays out.
Multi: everything you say makes sense to me. I am surprised by how pessimistic big city (ie most) Japanese are about the future, but at the same time, the real rural people I have met seem "already there" when discussing topics of collapse and changing to the next paradigm. That is, I believe that many people in the rural areas know well what is coming down the pike and understand the role of DIY agriculture etc in the countryside as the future of their country. Also, the few I have met in Japan who have "woken up" are moving to the countryside and talking/doing the same things as on this blog site. I had thought that at some point the entire country might start paying attention to these pioneers, but now I am not so sure.
Anyway, if you have any time, please explore this small area of Japan with me. As you well know, Japan is not that homogeneous. Even when I was there full time during the bubble period, I was surprised at how different the rural areas were compared to the cities, like night and day (my large corporation had a factory in the countryside: people there laughed often at work and shared feelings, and one friend for example, would go out in his boat fishing on his way home from work). I dont want to say too much publically, but there are many fantastic next-paradigm opportunities in Japan that very few people are aware of. .
Multi: Good point about nemawashi (根回し (consensus building) syndrome)
However, each community has its own attitude/character. I think that the big organization nemawashi is not that relevant to a small town.
We are working together to build small businesses in the rural area so that people can live here. Because there are fewer people and not a big company, things (decisions/acts/government regs) seem to be carried out the same way and with the same speed as in any other small town in America, in my opinion. My impression is that small town Japan has much more in common with small town America than with big city Japan or America. An added bonus in this regard is that the Japanese dont worship/adore their central government as much as Americans do. Much freedom comes from that. What a relief…
Dear Chris:
The failure of Japan's near-zero interest policy of 1995 to stimulate Japanese economy is due to the attitude of Japanese consumers. Average retirement age of Japanese workers is about 55 years old, meaning much less active years to accumulate retirement savings. Japanese consumers are known as diligent savers, and good at math too. By cutting interest rates to near zero, they immediately figure out that they must save more, much more, to have a reasonable retirement nest egg. This means much less spending and the whole economy tanks until today. The only result is sharp suppresion of Yen vs. Dollar to postpone the decline of Japan's trade surplus. By this reason we call Japan's near zero interest rate policy as "The Currency Market Manpulation of the Second Kind". The stagnation of Japan due to that policy has been predicted in article 1 of 1998, posted on our website, www.forcastglobaleconomy.com.
Since Mr. Bernanke starts to hold down U. S. interest rates also to near zero and printed huge amount of fiat Dollar, the edge of Japan's near zero-interest rate policy has been lost and Yen bounced back to near 80 Yen/$. The new monetary policy of Japan is first most to weaken Yen again, probably to 100 plus Yen/$. As for the reaction of Japanese consumers? Inflation is the deadliest enemy of retirement. They may rush to save more, instead of spending more!
Chih Chen
Dear Chris:
The failure of Japan's near-zero interest policy of 1995 to stimulate Japanese economy is due to the attitude of Japanese consumers. Average retirement age of Japanese workers is about 55 years old, meaning much less active years to accumulate retirement savings. Japanese consumers are known as diligent savers, and good at math too. By cutting interest rates to near zero, they immediately figure out that they must save more, much more, to have a reasonable retirement nest egg. This means much less spending and the whole economy tanks until today. The only result is sharp suppresion of Yen vs. Dollar to postpone the decline of Japan's trade surplus. By this reason we call Japan's near zero interest rate policy as "The Currency Market Manpulation of the Second Kind". The stagnation of Japan due to that policy has been predicted in article 1 of 1998, posted on our website, www.forcastglobaleconomy.com.
Since Mr. Bernanke starts to hold down U. S. interest rates also to near zero and printed huge amount of fiat Dollar, the edge of Japan's near zero-interest rate policy has been lost and Yen bounced back to near 80 Yen/$. The new monetary policy of Japan is first most to weaken Yen again, probably to 100 plus Yen/$. As for the reaction of Japanese consumers? Inflation is the deadliest enemy of retirement. They may rush to save more, instead of spending more!
Chih Chen
Chih Chen, I agree with your ideas of less consumption by households instead of more. I think that the American experts on Japan who keep prattling on about inflation as the primary reason for money printing and that the main result (high consumer inflation causing households to spend) is extremely misleading. Unless the central govt orders companies to increase wages, (which they COULD have done years ago to INCREASE inflation if THEY HAD WANTED increased inflation!! ) the service sector and domestic labor should not inflate. Wages are not expected to increase but high inflation of inported Chinese/Korean goods and energy will occur and discipline the Japanese consumer to be more frugal and also spend more on Japanese companies again. The govt. did not bother to increase inflation by this simple method available but instead is concerned with JAPANESE INDUSTRY exports etc. Japan is getting creamed by the low Korean Won and the low Chinese Yuan. That is a most dispositive fact, which everyone seems to ignore.
- Japan could have easily made price inflation anytime by simple govt fiat (orders to companies /minimum wage etc) but chose not too, mostly because of the need to compete with China and did the opposite instead. In fact Japanese govt DECREASED wages (caused deflation) by agreeing with big companies to CHANGE the LAWS to allow part time workers to replace higher paid salary man. That is a major cause of deflation!! THe opposite could have been done if inflation was such a priority (it wasnt).
2. The "game" as it were is all about international competitiveness. Japan needs to sell again against a very weakened Won in particular. Follow the money. Large companies are in control and decide policy. They got deflation in an effort to compete with China via part time workers to replace salarymen. NOW they need a much lower yen. The yen went haywire the last few years, going from 120 per $ to 82 per $. No way can the country survive that exchange rate. That is the main reason for "money printing." The pundits look at Japan through American RedWhiteBlue colored glasses.
- The cause and effect of money printing is all about export wars, JUST LIKE THE 1930s and the SAME strategies are being followed and history is repeating. Why cant any of the expert pundits see this? The extreme printing of 1933 etc let to closing of markets by competitors and to world war. That is the more accurate story that self appointed experts should be discussing. I am not an expert but I am concerned that no one is paying attention to facts a. deflation caused by a government/industry reacting to China and Korea industry (and also by a high yen), b. money printing now (yen way way too high) caused by a government/industry reacting to China and Korea. Future/consequences, a repeat of the 1930's, trade friction.