http://www.zerohedge.com/news/2013-01-01/guest-post-japans-patriotic-war-agenda
Guest Post: Japan's Patriotic War Agenda
Authored by Andrew McKillop,
The Sickly Giant
Japan has the the world's third-biggest economy and was only recently pushed into this third place by China - but it remains world No 1, and by far, as measured by its sovereign debt-to-GNP ratio. Its new Liberal Democratic Party-LDP government, no different from LDP governments which have almost exclusively ruled since 1955, is setting out with a proud (in fact desperate) task: to end deflation by pushing down the world value of the JPY (yen) to a theoretical point where "inflation of 2% or 3% a year" will be possible.
Japan has the the world's third-biggest economy and was only recently pushed into this third place by China - but it remains world No 1, and by far, as measured by its sovereign debt-to-GNP ratio. Its new Liberal Democratic Party-LDP government, no different from LDP governments which have almost exclusively ruled since 1955, is setting out with a proud (in fact desperate) task: to end deflation by pushing down the world value of the JPY (yen) to a theoretical point where "inflation of 2% or 3% a year" will be possible.
The return of inflation, in official Japanese liberal newspeak, will make the economy less sickly even if the strategy "has risks". One of these is war with China, if only as a (Japanese) crowd pleaser, and another is selling off Japan's over-one-trillion dollar holding of US Federal debt at exactly the right psychological moment to implode the US economy, already teetering on the brink of its fiscal cliff.
The sickly Japanese economy can look quite healthy on cursory first glance.Probing deeper shows it is much, much worse than most Japanese either know or non-Japanese want to know. One reason that "nobody wants to know" is because Japan is the world leader in Neoliberal economic decline, having run the gamut of New Economy fads and foibles over more than 20 years. It has blown them up one by one, and slumped ever further into permanent and probably terminal decline. To be sure, firebrand Free Marketeers will contest this picture, saying that Japan is an entitlement strangled, over-developed monoculture with indelible cultural barriers to "the open economy" that however in no way prevent the country technologically innovating at a rapid pace, and having much more than a random selection of thriving world-class multinationals.
Debt And Deficit
25% of Japan's annual state and local government budgets go to servicing debt.Interestingly enough, the very first stock market scams - France's Mississippi Company scam of 1719-1721 and its 'sister scam" in England, the South Sea Bubble - were driven by greedy and incompetent monarchs (the 18th century equivalent of Big Brother government) running up massive debts. Scraping around for a quick fix, the "finance sector professionals" advising the greedy monarchs soon hit on cranking up an asset scam, Facebook or Apple-style, and siphoning quick and fraudulent profits from this to the monarchs. After a short while, of course, the scam went 'Madoff the wall'. The asset mountain imploded leaving nothing but paper promises, popular rage, and more debt.
25% of Japan's annual state and local government budgets go to servicing debt.Interestingly enough, the very first stock market scams - France's Mississippi Company scam of 1719-1721 and its 'sister scam" in England, the South Sea Bubble - were driven by greedy and incompetent monarchs (the 18th century equivalent of Big Brother government) running up massive debts. Scraping around for a quick fix, the "finance sector professionals" advising the greedy monarchs soon hit on cranking up an asset scam, Facebook or Apple-style, and siphoning quick and fraudulent profits from this to the monarchs. After a short while, of course, the scam went 'Madoff the wall'. The asset mountain imploded leaving nothing but paper promises, popular rage, and more debt.
Japan can in no way be criticized for being ahead of the Neoliberal pack in running up its sovereign debt to delirious extremes and, much later on, panicking about it. This is what Neoliberal Freedom is all about - called "laisser faire"!
The incoming, recycled LDP stalwart Shinzo Abe – once again destined to be Japan’s prime minister by Japan's No Alternative political machine – lost no time in undertaking to flood the economy with money until inflation reaches at least 2%. The critical point is that Japan is the country where deflation has been a "permanent" fixture, a spinoff from its permanent decline and despite its incredible debt and now impressively huge trade deficits, and a list of other no-no things for the trader fraternity hunched over their playstation consoles.Apparently, Abe and his LDP Old Guard imagine that "gaijin", including the Chinese, are awed by the risks this sets for the world economy and will not react.
Foreigners will not show disrespect to Japanese bonds, but will obediently hold them. They will also, in very orderly fashion, only moderately sell off the JPY, by exactly the amount needed to get the magic 2.5%-a-year inflation rate that Japan's new (in fact old) bosses pine for. Japan is by definition “too big to fail” – but unfortunately Japan's liberal and neoliberal Apprentice Sorcerors are dreaming.
Nationalism Rising
For outsiders, whether we call them gaijin, Martians or Wall Street Journal editorialists, Japan seems to be struck by a strange curse. It’s population is shrinking rather fast, surviving Japanese are therefore rapidly ageing, consumer attitudes and behaviour go from bad to worse - Japanese will not consume - Japanese savings are "ridiculously" high with bank deposits bringing 0% per year interest, taxes are high, the country makes only the faintest attempt to attract talent, ideas or products and services from the rest of the world. Its agriculture is a nightmare of low productivity and high subsidies, its uncompetitive rural industries are cosseted by the government to the point of absurdity. Its reaction to the Fukushima disaster - abandoning nuclear power - appeared 'unrealistic' to some, and its theatrical bellicosity in response to China's theatrical bellicosity over the disputed South China Sea islands (Senkakus in Nippon-go, not in Chinese) seems unrealistic to most and outright dangerous to most.
For outsiders, whether we call them gaijin, Martians or Wall Street Journal editorialists, Japan seems to be struck by a strange curse. It’s population is shrinking rather fast, surviving Japanese are therefore rapidly ageing, consumer attitudes and behaviour go from bad to worse - Japanese will not consume - Japanese savings are "ridiculously" high with bank deposits bringing 0% per year interest, taxes are high, the country makes only the faintest attempt to attract talent, ideas or products and services from the rest of the world. Its agriculture is a nightmare of low productivity and high subsidies, its uncompetitive rural industries are cosseted by the government to the point of absurdity. Its reaction to the Fukushima disaster - abandoning nuclear power - appeared 'unrealistic' to some, and its theatrical bellicosity in response to China's theatrical bellicosity over the disputed South China Sea islands (Senkakus in Nippon-go, not in Chinese) seems unrealistic to most and outright dangerous to most.
Gaijin criticism of Japan however faces all kinds of problems: Japan has solved the conundrum of "progress without growth", but this has made Japan "unadapted" or out of synch with the present real world and what at present is the only slowly dissolving and dispersing global economy.The Senkakus issue is of course "only symbolic" but the problem is that War and Circuses are a liberal trick dating back almost as far as the Mississippi Co. crash, if not further.
For Marie Antoinette and her quack doctor Francois Quesnay (called "a founding father of liberal economics"), Bread and Circuses seemed the right way to fool the crowd at the gates of the Bastille but in her case this was a fatal error: she literally lost her head, by guillotine, not so much later on. War and Circuses can be called the hard-edged, stout-lipped ultimate and final version of liberal mindwarp, to be used only after the economy has been sucked dry by bottom feeders and imploded by liberal burger-nothings spouting idiot-friendly one-liners.
Today's Japan, after too many decades of New Economy fooling around, has the government we might expect or fear.Shinzo Abe's LDP has a sure and certain ally in parliament in the shape of the far-right Japan Restoration Party (JRP), led by Japan’s 80-year-old version of Dick Cheney, Ishihara Shintaro. His plan for the disputed islands is for Tokyo's city government to purchase them from their private Japanese owner, and station “civil servants” on them, which is Japanese coded language for Japanese SDF, Self Defence Force, personnel. Even "SDF" now has special meanings, because Japan's "self-defence" navy now boasts roughly four times more major battle-class ships than Britain's Royal Navy. Placing these "civil servants" on the disputed islands can only draw one possible reaction from China, which in absolutely no way would allow this provocation to slide.
Nuclear Wipeout
Japan can be called the nation that even if it did not go the fastest, certainly went the furthest with nuclear power, that is so-called "civil" nuclear power.
Japan can be called the nation that even if it did not go the fastest, certainly went the furthest with nuclear power, that is so-called "civil" nuclear power.
Japanese in March 2011 were able to witness the simultanous meltdown of at least 3 (possibly 4) reactors on primetime TV, along with hundreds of millions of non-Japanese. Probable cost - to the state of course, not Tepco the owner and operator of the reactors - of clean up and economic recovery operations will probably be more than $500 billion, even if this is peanuts compared with Japanese sovereign debt! Much more important and proving again, if needed, that "civil" uranium fuelled reactors are only good for making nuclear weapons and generating expensive electricity, the JRP regularly crows that Japan is a "single screwdriver turn" from nuclear weapons capability and can at any time start production at an initial rate of four Hiroshima-equivalent weapons-per-week. In total, the JRP goes on to boast, Japan can have fully functional nuclear weapons in at most two months from getting the green light - from Shinzo Abe's governing party.
The US 'Foreign Policy' magazine, described as "administration friendly", suggests that the lure for Japan to go nuclear, despite Hiroshima and Nagasaki, despite Fukushima, may be too tempting for its current War and Circuses, career liberal politicians with retrograde and spurious nationalist credentials. 'Foreign Policy' goes on to imply that the White House, if not Americans at large would appreciate this – because it would tend to neutralises the Chinese nuclear threat in the region, and "reset the game" of regional geopolitics at a highly belligerent zero.
Japan's endgame flirt with Neoliberal mindwarp, what we can call the "slogan based economy", has brought about a situation where War and Circuses is surely on the Japanese political agenda, along with Japan's threats to sabotage the global economy. The inventors of kamikaze suicide war now have an Old Guard of political deciders who are prepared to pilot the economy straight into the ground, while bleating about "national pride". After these have-beens have been dumped in the trashcan of History, however, the Japanese nation will really re-emerge and be proud to do it.
and.....
http://www.aljazeera.com/news/asia-pacific/2012/12/20121231443436671.html
Chinese fishing boat 'detained in Japan' | |||
Japan's coastguard seizes Chinese fishing boat within Japanese waters, reports say, amid row over disputed islands.
Last Modified: 31 Dec 2012 11:21
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The disputed islands near Taiwan are known as the Diaoyu in Chinese and Senkaku in Japanese [REUTERS/Kyodo]
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| Japan's coastguard has detained a Chinese fishing boat within Japanese waters, China's Xinhua news agency said, citing the Chinese consulate general in Fukuoka, a city in southwestern Japan. The captain of the boat, registered in the southeastern Chinese province of Fujian, and two crew members have been brought to the southern Japanese city of Kagoshima for questioning, Xinhua said on Sunday.
It said the captain had admitted he was in Japanese waters.
A spokesperson for the Japanese embassy in Beijing could not be reached for comment late on Sunday evening. The Chinese fishing fleet tends to range far into the waters east of China to offset depleted stocks closer to shore. The incident came as China transferred two destroyers and nine other ex-navy vessels to its maritime surveillance fleet, reports said Monday, a move designed to beef up its position in bitter territorial rows with Japan and other neighbours. Beijing renovated the ships and transferred them to surveillance operations to "alleviate the insufficiency of vessels used to protect maritime interests", said a report on Tencent, one of China's major news portals. Maritime dispute China is embroiled in a maritime dispute with Japan that has seen tensions between the two Asian giants, the world's second- and third-largest economies, at times reach fever pitch. It is also engaged in a simmering row with its southern neighbours over its claim to vast swathes of the South China Sea. Beijing has been sending maritime patrol vessels into waters around the East China Sea islands - which it claims as Diaoyu and which Japan controls and calls the Senkaku - since Tokyo nationalised the chain in September.
Two of Beijing's newly-refurbished vessels are destroyers, with one each to operate in the East and South China Seas, with the others including tugs, icebreakers and survey ships, according to the Tencent report. It was not clear whether it was the first time the maritime surveillance fleet has acquired destroyers, or when the transfers took place. The report was first published in the International Herald Leader, a Chinese-language newspaper linked to Beijing's official news agency Xinhua, and the author said the operation had been significantly strengthened.
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http://uk.reuters.com/article/2012/12/31/uk-japan-apology-idUKBRE8BU03020121231
Japan PM Abe wants to replace landmark war apology - paper
TOKYO |
(Reuters) - Japanese Prime Minister Shinzo Abe wants to replace a landmark 1995 apology for suffering caused in Asia during World War Two with an unspecified "forward-looking statement", a newspaper reported on Monday.
Abe, a hawkish conservative who is known to want to recast Japan's position on its wartime militarism in less apologetic tones, led his party to a landslide victory in a December 16 election.
He outlined his intention to restate Japan's position in an interview with the conservative Sankei newspaper, but he did not give details.
Any hint that Japan is back-tracking from the 1995 apology, issued by then Prime Minister Tomic Murayama, is likely to outrage neighbours, particularly China and North and South Korea, which endured years of brutal Japanese rule.
"The Murayama statement was a statement issued by Socialist Party Prime Minister Tomiichi Murayama," Abe was quoted as saying in an interview with the conservative Sankei newspaper published on Monday.
"I want to issue a forward-looking statement that is appropriate for the 21st century," he said.
Abe said he would consult experts about the details and the timing of statement.
He has also said he wants to loosen the constraints of Japan's post-war pacifist constitution.
Abe hails from a wealthy political family that includes a grandfather, Nobusuke Kishi, who was a wartime cabinet minister who was imprisoned but never tried as a war criminal after the war. He went on to become prime minister from 1957 to 1960.
First elected to parliament in 1993 after the death of his father, a former foreign minister, Abe rose to national fame by adopting a tough stance toward North Korea in a dispute over Japanese citizens kidnapped by North Korea decades ago.
More recently, he has promised not to yield in a territorial row with China over tiny islands in the East China Sea - known as the Senkaku in Japan and the Diaoyu in China - and boost defence spending to counter China's growing influence.
During a first stint as prime minister, which began in September 2006 and lasted a year, Abe pushed through a parliamentary revision of an education law to "restore patriotism" in school curriculums.
and......
http://www.bloomberg.com/news/2012-12-31/japan-rebuke-to-g-20-nations-may-signal-more-moves-to-weaken-yen.html
Japan Rebuke to G-20 Nations May Signal Moves to Weaken Yen
By Eunkyung Seo & Masaki Kondo - Dec 31, 2012 2:36 AM ET
Japanese purchases of foreign bonds to weaken the yen may become more likely as the nation rejects trading partners’ rights to criticize its currency policies.
“Foreign countries have no right to lecture us,” Finance Minister Taro Aso told reporters at a briefing in Tokyo on Dec. 28. He said that the U.S. should have a stronger dollar and questioned whether major Group of 20 nations had stuck to pledges from 2009 to avoid competitive currency devaluations.
Shinzo Abe, Japan's prime minister. Photographer: Katsumi Kasahara/Pool via Bloomberg
Yen has dropped more than 10 percent versus the greenback since the end of 2011, set to complete the biggest annual slump since 2005. Photographer: Kiyoshi Ota/Bloomberg
Japan’s new Prime Minister Shinzo Abe may accept trade friction as a cost of spurring growth and countering deflation through a looser monetary policy and weaker yen. The currency is set to complete its biggest annual decline in seven years after Abe’s Liberal Democratic Party secured a landslide victory in this month’s lower-house election. During his campaign, Abe said foreign-bond purchases were a possible monetary tool.
“The LDP wants to boost stock prices before the upper- house election in July next year, and the easiest option for them is to weaken the currency,” said Satoshi Okagawa, a senior global-markets analyst in Singapore at Sumitomo Mitsui Banking Corp., a unit of Japan’s second-biggest bank by market value. “The explicit policy to weaken the yen is likely to upset the U.S. and China.”
The yen was at 86.08 per dollar as of 7:30 a.m. in Londonafter touching 86.64 on Dec. 28, the weakest since August 2010. It traded at 113.53 per euro.
Currency Promises
The currency has dropped more than 10 percent versus the greenback since the end of 2011, set to complete the biggest annual slump since 2005. At the same time, the yen remains about 30 percent higher than it was five years ago.
In his Dec. 28 comments, Aso, a former prime minister, said that Japan and other countries made “a promise not to resort to competitive currency devaluations” at a G-20 meeting in 2009. “How many countries have kept the promise? The U.S. should have a stronger dollar. What about the euro?” he asked. “Foreign countries have no right to lecture us” as Japan is the only major economy to keep the pledge, Aso said.
The U.S. criticized Japan for undertaking unilateral sales of the yen in August and October last year, after Group of Seven economies earlier jointly intervened to weaken the currency in the aftermath of an earthquake and tsunami.
“Rather than reacting to domestic ‘strong yen’ concerns by intervening to try to influence the exchange rate, Japan should take fundamental and thoroughgoing steps to increase the dynamism of the domestic economy,” the Treasury Department said in a report in December last year.
Shrinking Economy
The Liberal Democratic Party faces the task of reviving growth after the economy contracted for the past two quarters, meeting the textbook definition of a recession. The nation’s industrial output tumbled more than forecast in November to the lowest level since the aftermath of last year’s record quake.
At the same time, stock prices are climbing, with Toyota Motor Corp. at a more than two-year high, as a weaker yen and prospects for central-bank easing brighten the outlook for exporters. Such improvements may cause concern for some of Japan’s Asian neighbors.
“South Korea is one of the countries most vulnerable to the weak yen policy as many export items are in direct competition, such as cars and electronic goods,” said Lee Sang Jae, a Seoul-based economist at Hyundai Securities Co. “Japan will try whatever it can to stop the deflation and to weaken the yen for export growth.”
Shirakawa’s Caution
After a Dec. 28 call with U.S. Treasury Secretary Timothy F. Geithner, Aso said he had told Geithner that the yen was making some corrections from one-sided moves and Aso would keep monitoring changes in the currency.
Bank of Japan (8301) Governor Masaaki Shirakawa, whose five-year term ends in April, has rejected suggestions that the bank buy foreign bonds and called for respect for the BOJ’s independence. Such a policy would amount to currency intervention, which is the responsibility of the finance minister, he says.
At the same time, the Nikkei newspaper on Dec. 29 cited Shirakawa as saying that central bank and government must work together to overcome deflation. Abe is pressing for the Bank of Japan to adopt a 2 percent inflation target, compared with a current goal of 1 percent. Consumer prices excluding fresh food fell 0.1 percent in November from a year earlier, showing the central bank is struggling to fulfil even the lesser ambition.
The LDP proposed in its campaign manifesto establishing a joint BOJ, Ministry of Finance and private sector fund to buy foreign bonds. Takatoshi Ito, a former finance ministry official and a possible contender to become central-bank governor, said in a Dec. 6 interview that the BOJ “can and should buy foreign bonds,” adding that such a move is possible if the finance minister publicly declares support for it.
In a note this month, Australia and New Zealand Banking Group Ltd. said that foreign bond purchases are contrary to the legislation governing the BOJ. At the same time, it’s possible that the government may cajole the central bank into putting money into a proposed private-public vehicle for investment in foreign asssets, the lender said.
and.......
http://articles.economictimes.indiatimes.com/2012-12-28/news/36036714_1_boj-law-economic-and-fiscal-policy-shinzo-abe
Determined to achieve shared policy goals with BOJ: Japan's Economic Minister
TOKYO: Japan's Economics Minister Akira Amari said on Friday that the government and the Bank of Japanwill work more closely to establish shared policy goals and will send a clear message to the markets of their strong determination to achieve them.
Japan may also consider setting up a public-private sector fund to address yen strength as needed, Amari told a small group of reporters.
Newly installed Japanese Prime Minister Shinzo Abe on Wednesday appointed former Trade Minister Amari as cabinet minister in charge of a new "Economic Revival Headquarters", tasked with rescuing the stalledeconomy via Abe's reflationary policies.
Amari will also head the Council on Economic and Fiscal Policy (CEPF), an advisory body that had lain dormant under the outgoing Democratic Party of Japan, which will set macroeconomic priorities.
Abe's Liberal Democratic Party pledged in its election campaign to establish a public-private sector fund involving the Ministry of Finance, the Bank of Japan and the private sector that would pursue various measures to address a strong yen, including foreign bond purchases.
Abe, whose Liberal Democratic Party won a landslide victory in a parliamentary election on Dec. 16, has called on the BOJ to set a 2 percent inflation target, double the bank's current goal, and to ease monetary policy "without limit" to beat deflation.
He has also threatened to revise the BOJ Law if his demands are not met, turning up the heat on the central bank.
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