Ranting Andy - Hari Kari

Type:  Andy  

Ranting Andy - As the GLOBAL economy careens headlong towards catastrophic, systemic collapse, the "world's most dangerous wildcard" is left unnoticed by the MSM.  Such ignorance - blissful or otherwise - is typical for most dumbed-down, PROPAGANDA-brainwashed earthlings, but NOT Miles Franklin blog readers.  Our site is one of the few that points out reality, and doesn't coincidentally forget it to maintain an unreasonably optimistic façade. 

One of the most important services we provide is keeping you aware of important topics, none more so than historical precedent for what the Western world is on the verge of.  Japan may be vastly different culturally, but shares a common fiat monetary bond, with a track record of "modern era monetary policy" on a par with the world's worst, but over a far longer period.
 
Following its catastrophic World War II loss, the Japanese population bared down in an effort to regain self-sustainability, and equally importantly, its lost "face."  Amazingly, by the 1980s it had established itself as the world's pre-eminent economic power - and technological leader - creating per capita wealth exceeding its greatest rivals, including the United States.
 
 
By the late 1980s, Japan had become the envy of the global economy -sporting leading market shares, a soaring real estate market, and hyperbolic stock bubble.  In fact, it became "best practice" to emulate Japanese corporate policy, and "fashionable" to mimic Japanese culture...
 
Mr. Roboto- Styx
Mr. Roboto- Styx
 
However, the 'Japanese Miracle' came to an end in 1989, when its financial markets crashed from the weight of overvaluation and the spectre of heightened global competition.  More than two decades later, the Nikkei is down nearly 80%, housing prices are near multi-decade lows, and the vaunted Japanese manufacturing industry is steadily losing market share to China and Korea...
  
nov 2  
Few realize the most important factor behind the nation's woes is its horrific demographics, such as the world's oldest population...
 
 
...and lowest birth rate...
 
 
...ASSURING an ongoing EXODUS of business to China will continue ad infinitum...
 
 
Then you have the national debt; second only to the United States, but first by far on a per-capita basis and as a percent of government revenues...
 
The Japanese government runs debt at a 19:1 ratio to its own revenues, which is both outrageous and unsustainable. Wave after wave of Quantitative Easing, economic stimulus, and project finance have left the Japanese government debt a mountain impossible to remove. Growth to pay down debt is the great modern myth. The debt ratio for the United States is 3:1 to income and rising, and for Italy it is a 2.5:1 ratio.
 
When including unfunded liabilities and "off balance sheet" derivatives exposure, America and the UK - including domiciled corporations - have higher debt levels.  However, based on pure government debt, Japan's 225% of GDP (and growing) puts ALL nations to shame...
 
 
...a situation that will only worsen given the aforementioned factors, as well as the potentially multi-decade impact of last year's catastrophic natural disaster...
 
 
Compounding the nation's woes are its persistently strong currency - care of strong national savings and (until this year) persistent trade surpluses...
  
may 5 2004  
...despite BY FAR the most aggressive currency intervention in GLOBAL HISTORY...
 
 
...and sheer panic in the nation's Central Bank, where an incredible NINE Finance Ministers have resided in the past five years...
 
 
The "Land of the Setting Sun" has utilized "Quantitative Easing" for the past 23 years, with its own version of "ZIRP" in practice since 1990.  Since that time, the nation's debt levels have exploded, market shares dwindled, and economic growth stagnated.  This is what we call a "liquidity trap" - the ultimate, un-escapable scenario, as it has morphed into Ponzi Scheme status.  In other words, it MUST grow larger to survive, but ALL incremental debt negatively impacts the nation, per the law of "DIMINISHING RETURNS."
 
I could write about this forever, but just wanted to throw out the hideous Japanese record of monetary policy catastrophe, as well as the suicidal, "HARI-KARI" fiscal actions that have followed such failure - such as doubling the national sales tax...
 
 
Japan has posted eight consecutive months of trade deficits, and $2.6 trillion of Japanese Government Bonds (JGBs) must be rolled over within the next six months.  Thus, count on "QE to Infinity" to permanently destroy this once-great nation, as well as ALL the world's major, fiat-based economies.  In other words, ALL of them.