Posts Tagged Japan

COVID-19 Corona virus update

the risk is … to the whole society, yet the solution depends not on society but on the individual.”

UPDATE: Armageddon ou Foutaise? Dr. Ph. Devos

Japan confirmed cases = 839 (not including the cruise ship “Diamond Princess”), just over half of the UK numbers (1,395) and 15% of France’s (5,437) (from Johns Hopkins )

Multilingual Hotlines have been set up in Japan for the major non-Japanese populations.

The Japan Ministry of Health, Labor and Welfare website shows a slight decrease in the number of new cases since March 10th, but there was a similar drop the previous week, and it spiked up again on March 10th. (I notice there are just 5 columns per week. Wait. Is that Mon-Fri? The website today Monday March 16th are for March 13th, so we’ll have to wait until they process the weekend numbers.)

UPDATE: The website numbers are out of date.

Health authorities in Japan reported 63 new cases of coronavirus infection on Saturday — the highest daily increase excluding those linked to the cruise ship Diamond Princess.

The officials say the number of cases confirmed in the country reached 773 on Saturday.

The figure does not include 697 people from the US-operated cruise ship or 14 others who returned on chartered flights from China.

Another death was reported on Saturday, raising the tally to 22 in Japan and 7 others from the cruise liner.

Japan sees record daily new coronavirus cases

Japan Ministry of Health, Labor and Welfare 16 March 2020

but the number of cumulative cases continues to rise.

Japan Ministry of Health, Labor and Welfare 16 March 2020

There are a number of live streams of updated data on YouTube. This one says ” The numbers on screen is based on combination of government announcement and news media”, so the usual caveat applies: do your own research.

This is not Armageddon or the end of humanity, the Apocalypse or any other doomsday prediction. As this Belgian doctor wrote, “We’re not all going to die. In the worst-case scenario, 0.4% of the Belgian population will die, the great majority of which will be among those over 80. Stop the madness already!”

Nous n’allons pas tous mourir : dans le pire scenario, 0,4% des Belges mourront, en large majorité dans les plus de 80 ans. Arrêtez la psychose. 

UPDATE: Armageddon ou Foutaise? Dr. Ph. Devos

He updated on March 8th with this, which I think is sensible (my rough translation): “I hope to convince the country to try and limit the infections to 500 per million inhabitants. To achieve this, individual behaviour will be more effective than mass measures. It may be difficult for some to remain quietly at home when they get a slight fever; some may find it difficult to wash their hands at least 5 times a day, and some cannot imagine not shaking hands with anyone. And yet it can be done. And if we do not do these things, we will be forcing the government to take drastic measure such as we see in Lombardy (N. Italy). I ask everyone to consider their personal responsibility: the risk is not merely to individuals but to whole the society, yet the solution depends not on society but on the individual.”

Je préfère pour ma part agir en amont et convaincre la population pour tenter de ne pas atteindre les 500 contaminés par millions d’habitants. Pour cela le comportement individuel sera plus déterminant que les mesures de masse. Rester cloîtré chez soi alors qu’on fait une petite fièvre sera difficilement acceptable pour de nombreuses personnes. Se laver les mains plus de 5 fois par jour sera également difficile pour beaucoup. Même ne plus serrer une main semble inconcevable pour certains. Pourtant cela peut marcher. Et si on ne le fait pas, on obligera le gouvernement à prendre des mesures drastiques telles que celle que l’on voit en Lombardie. Je demande à chacun de réfléchir à la responsabilité qu’il veut porter : le danger n’est pas au niveau de l’individu, il est collectif. Par contre le gros de la solution n’est pas collective, elle est individuelle. 

UPDATE: Armageddon ou Foutaise? Dr. Ph. Devos

I recommend the following digital products: WP GDPR Fix, a WordPress plugin that quickly and easily helps you make your WP blog GDPR compliant. Brett Kelly's "Evernote Essentials", Dan Gold's $5 guides to Getting Everything Done with Evernote and Springpad, and DocumentSnap Solutions' Paperless Document Organization Guides. Be sure to try DocumentSnap's free email course on going paperless first before buying his products. Sign up for it on his homepage.
Disclosure of Material Connection: My recommendations above are “affiliate links.” This means if you click on the link and purchase the item, I will receive a commission. Your cost will be the same as if you order directly. I only recommend products or services I use personally and believe will add value to my readers. This disclosure is in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Tags: ,

Japan’s Self-Defeating Mercantilism – Why isn’t the medecine working?

In the 16 months since Japanese Prime Minister Shinzo Abe launched his bold plan to reflate Japan’s shrinking economy the yen has depreciated by 22% against the dollar, 28% against the euro and 24% against the renminbi. The hope was to stimulate trade and push the current account decisively into the black. Yet the reverse has occurred. Japan’s external position has worsened due to anemic export growth and a spiraling energy import bill: in January it recorded a record monthly trade deficit of ¥2.8trn $27.4bn. Having eked out a 0.7% current account surplus in 2013, Japan may this year swing into deficit for the first time since 1980. So why is the medicine not working?

via Guest Post: Japan’s Self-Defeating Mercantilism | Zero Hedge.

It’s a long article, well worth reading. Here I’ve selected excerpts and commented on them.

First, the title is tautologous: mercantilist policies have always been self-defeating for the nation as a whole in the long run. They are designed to bolster a particular group of people or section of the economy, at the expense of the individual and the consumer. Murray Rothbard put it this way:

In the days of Adam Smith and the classical economists, mercantilism was properly regarded as a blend of economic fallacy and state creation of special privilege….

Mercantilism, which reached its height in the Europe of the 17th and 18th centuries, was a system of statism which employed economic fallacy to build up a structure of imperial state power, as well as special subsidy and monopolistic privilege to individuals or groups favored by the state. Thus, mercantilism held that exports should be encouraged by the government and imports discouraged. Economically, this seems to be a tissue of fallacy; for what is the point of exports if not to purchase imports, and what is the point of piling up monetary bullion if the bullion is not used to purchase goods?

… Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.… But in the mercantile system, the interest of the consumer is almost constantly sacrificed to that of the producer; and it seems to consider production, and not consumption, as the ultimate end and object of all industry and commerce.

“Mercantilism: A Lesson for Our Times?”, Murray Rothbard, writing in the Freeman, 1963. (See also the Wikipedia for Schools article on Mercantilism.)

But it’s not working! In 2013, Japan recorded a record annual trade deficit of 11.47 TRILLION yen (up from 6.94 trillion in 2012; that’s an increase of nearly 100%!). Rising costs for imports outstripped growth in exports.

Recall that Mr. Abe’s policy was to weaken the yen in order to boost exports. Trouble is, Japan is a resource-poor nation, something that all Japanese schoolchildren know. Many products manufactured in Japan require raw materials which must be imported. Thanks to Mr. Abe’s “weak yen” policy, those imports cost Japanese manufacturers and importers more. In addition, there were the unexpectedly large amounts of LNG which were required to power Japan’s industry to replace the lost wattage of the 54 nuclear power stations which were taken offline after the 2011 earthquake-tsunami-Fukushima disaster.

Brilliant, Mr. Abe!

Back to the article. Here’s the theory:

Consumers are immediately hit with an implicit “tax” as imported goods cost more, while export-oriented firms get an effective subsidy.

Yes, exporters get a boost, but against this, in Japan’s case, must be offset the rising costs of energy and of importing raw materials.

In the capital markets, the effect is to lower the value of domestic bonds in foreign currency terms, with the result that yields rise. This means that the cost to the government of financing its deficit rises, forcing a reduction in government spending. As a result of these effects, resources are shifted from the household and government sectors and into the corporate sector. The effect of this resource reallocation should be to boost productivity, which in turn initiates a virtuous circle of rising incomes and ultimately higher consumption.

Needless to say (for those living in Japan), neither has happened. Why not?

in addition to devaluing, it is also engaging in massive quantitative easing. This keeps bond yields low, enabling the government to keep financing its deficit at low cost. There is thus no incentive for the government to cut spending— and in fact the consumption tax hike will be offset by even more spending. Furthermore, low bond yields suppress the financial income of household savers.

Great. So in addition to having to pay more for imported goods,  and for electricity (both for their own household use and for that of the manufacturing industries), consumers are unable to gain any real benefits from their savings, because interest rates are so low.

Question: if savings are discouraged, how will the capital needed for future investment be accumulated?

The end result of all this is that the government bears none of the burden of the adjustment and the household sector bears all of it, through higher import costs and lower financial income. With the household sector’s spending power thus crimped, companies have no incentive to invest in domestically-focused production. Instead, all their investment will be geared toward exports—mercantilism on steroids.

With the predictable result that the consumer gets it in the shorts. Of course, exporters, to the extent that they are individuals, are also consumers.

Since all the leading economies favor policies that support production over consumption, the world is getting more goods than it can absorb. The result is ongoing price declines, which have the effect of deferring the ultimate global recovery.

The problem is not falling prices per se (see this brilliant article debunking the “deflation is evil” myth); the problem is subsidized production, because this distorts price signals and prevents resources from being re-allocated in a timely fashion.

What this means is that Japan’s ultra-mercantilism is self defeating. In a global environment of weak demand and disinflation any volume increase in its exports will have to be paid for through price reductions…

Japan’s most likely path is that the yen keeps falling, the BoJ keeps printing money, and the dollar value of exports stagnates as devaluation and price cuts offset any volume increases. And so, paradoxically, the current account will continue to deteriorate into permanent deficit, despite ultra-mercantilism. At this point the game will have changed in Japan and Abenomics will have manifestly failed to deliver on its stated objectives.

The sad part is that this outcome is all so predictable. We don’t actually have to try the experiment to know that it is highly likely to fail, meaning it won’t result in increased productivity, economic growth, consumption or savings.

How will Japan’s voters react when they see that Abenomics has failed? Is there anyone offering any alternative to mercantilist policies?


I recommend the following digital products: WP GDPR Fix, a WordPress plugin that quickly and easily helps you make your WP blog GDPR compliant. Brett Kelly's "Evernote Essentials", Dan Gold's $5 guides to Getting Everything Done with Evernote and Springpad, and DocumentSnap Solutions' Paperless Document Organization Guides. Be sure to try DocumentSnap's free email course on going paperless first before buying his products. Sign up for it on his homepage.

Disclosure of Material Connection: My recommendations above are “affiliate links.” This means if you click on the link and purchase the item, I will receive a commission. Your cost will be the same as if you order directly. I only recommend products or services I use personally and believe will add value to my readers. This disclosure is in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Tags: ,

Deflation – is it good or bad?

Reposted without comment. Is deflation good or bad? You decide. In the red corner, repeating the “20 years of deflation” myth (prices did not fall for 20 years in Japan; they were flat. The evidence is here):

“We should first make sure that Japan exits from 20 years of deflation,” said Hiromi Yoshida, acting secretary-general for the LDP upper house caucus, urging Abe to remain focused on the economy.

via Abe bracing for spring storm- Nikkei Asian Review.

And in the blue corner:

What is it with this perennial fear the chief money printers have of falling prices? Not that we are likely to see it happen, but if it does, what of it? Bloomberg reports on the recent ECB decision with the following headline: Draghi Says Deflation Danger Should Abate as Economy Revives
The headline alone is a hodge-podge of arrant nonsense. First of all, ‘deflation’ (this is to say, falling prices), is not a ‘danger’. Speaking for ourselves and billions of earth’s consumers: we love it when prices fall! It means our incomes go further and our savings will buy more as well. What’s not to love?

The problem is of course that when prices decline, the ‘wrong’ sectors of society actually benefit, while those whose bread is buttered by the inflation tax would no longer benefit at the expense of everybody else. But they never say that, do they? Has Draghi [or Abe, Ed] ever explained why he believes deflation to be a danger? No, we are just supposed to know/accept that it is.
… ‘Inflation’ is not the same as ‘economic growth’ – on the contrary, it both causes and frequently masks economic retrogression. …

As Austrian economists have long explained, it is simply untrue that prices must rise for the economy to grow. Consumers obviously benefit from falling prices … All of us can easily ascertain how beneficial the decline in computer prices, cell- and smart phone prices, prices for TV screens, etc. is. Naturally, it would be even better if all prices fell, not only those on a select group of consumer goods.

What about producers? Won’t they suffer? By simply looking at the share prices and earnings of the companies that make all the technological gadgets the prices of which have been continually declining for decades, everybody should realize immediately that the answer must be a resounding NO. This is by the way not only true of the firms that are in the final stages of the production process, i.e. the stages closest to the consumer. It is obviously also true for the firms in the higher stages of the capital structure. But why? It is quite simple actually: prices are imputed all along the chain of production. What is important for these companies to thrive are not the nominal prices of the products they sell, but the price spreads between their input and output.

In fact, the computer/electronics sector is the one that comes closest to showing us how things would likely look in a free, unhampered market economy.

via via Acting Man | No, Deflation is Not a ‘Danger’ |.


I recommend the following digital products: WP GDPR Fix, a WordPress plugin that quickly and easily helps you make your WP blog GDPR compliant. Brett Kelly's "Evernote Essentials", Dan Gold's $5 guides to Getting Everything Done with Evernote and Springpad, and DocumentSnap Solutions' Paperless Document Organization Guides. Be sure to try DocumentSnap's free email course on going paperless first before buying his products. Sign up for it on his homepage.

Disclosure of Material Connection: My recommendations above are “affiliate links.” This means if you click on the link and purchase the item, I will receive a commission. Your cost will be the same as if you order directly. I only recommend products or services I use personally and believe will add value to my readers. This disclosure is in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Tags:

Abenomics, Shinzo Abe, Bank of Japan Infographic – Saxo Capital Markets

Can Abenomics save the Japanese economy? (Click the graphic to see a larger, clearer version.)

Here’s a useful “infographic” as they’re called on Abenomics, produced by investment group Saxo Capital.

abenomics

Read the whole thing at Abenomics, Shinzo Abe, Bank of Japan Infographic – Saxo Capital Markets.

The main points:

  • How does Abenomics work?
  • Structural reforms key to Abenomics success
  • Abenomics lifts consumer sentiment
  • The dangers of Abenomics

And a few excerpts. These should be read in conjunction with “This Inflation is Supposed to be GOOD for Japanese Workers?” which I’ll comment on in a minute. As the mainstream seem to be harping on how “fresh” and “exciting” Abenomics is and how it has led to a surge in the Japanese stock market, I’ll focus here on some more sobering, long-term aspects of it.

  • For Abenomics to succeed, Japanese households will need to reverse the recent deflationary trend of excess saving and encourage consumers to spend more.
  • Further problems await Japan: the unsustainable ratio of the elderly to the working population, fallout should fiscal stimulus fail, and snowballing costs for imports.
  • Abe’s structural reforms carry with them several risks. The domestic agriculture sector could suffer from increased marketplace competition should tariffs on imports be removed. Any agreements with the TPP would mean greater dependency on government support among Japanese farmers, adding a further load on finances.

Read the whole thing at Abenomics, Shinzo Abe, Bank of Japan Infographic – Saxo Capital Markets.

Now, are Japan’s workers all excited about inflation and Abenomics? Wolf Richter writes this article on Zero Hedge. “This Inflation is Supposed to be GOOD for Japanese Workers?” Key points:

  • The Japanese Statistics Bureau just reported incomes and expenditures of households with two or more persons. This is by far the largest category of households in Japan. Due to the cost of housing in large urban areas – and due to remnants of tradition – a large number of singles live with their parents. This category is further divided into “workers’ households,” “no occupation” households, and “other” households.
  • Incomes of the all-important “workers’ households” rose a measly 0.1% from a year ago to ¥482,684. In nominal terms. But adjusted for inflation – yes, here is where the benefits of Abenomics are kicking in – incomes fell 1.3%. Disposable incomes fell 1.4%. The details were ugly: “Current income” (salaries and wages) dropped 1.2% and “temporary bonuses” plunged 19.5%. Income from self-employment and piecework plummeted 20.8%.
  • Spending rose a scant 0.4% in nominal terms from a year ago – but adjusted for inflation, spending fell 1.0%.
  • And this despite rampant frontloading of big-ticket purchases. The consumption-tax hike from 5% to 8%, to take effect on April 1, is motivating households to buy big-ticket items now and save 3%. It has turned into a frenzy. Durable goods purchases, the primary target of frontloading, jumped 40.4% in October from a year ago. While it’s goosing the economy now, it will create a hole starting next spring. Japan has been through this before [w]hen the consumption tax hike from 3% to 5% was passed in 1996
  • frontloading of a few big-ticket items is hitting day-to-day expenditures.
  • This is the benefit of inflation without compensation! A process that ever so slowly hollows out the middle class and pushes the lower classes deeper in the quagmire. It’s hurting workers and consumers. It’s constraining the real economy. Yet, holders of assets that the central bank inflates into the stratosphere benefit.

Doesn’t look good, does it, boys and girls?

 

 


I recommend the following digital products: WP GDPR Fix, a WordPress plugin that quickly and easily helps you make your WP blog GDPR compliant. Brett Kelly's "Evernote Essentials", Dan Gold's $5 guides to Getting Everything Done with Evernote and Springpad, and DocumentSnap Solutions' Paperless Document Organization Guides. Be sure to try DocumentSnap's free email course on going paperless first before buying his products. Sign up for it on his homepage.

Disclosure of Material Connection: My recommendations above are “affiliate links.” This means if you click on the link and purchase the item, I will receive a commission. Your cost will be the same as if you order directly. I only recommend products or services I use personally and believe will add value to my readers. This disclosure is in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Tags:

The First Cask from Reactor 4 Spent Fuel Pool Was Safely Lowered, Transported to the Common Pool | EXSKF

131122_05

It has been dubbed, perhaps somewhat hysterically, the most dangerous situation since the Cuban Missile Crisis: the task of removing the fuel rods from the Spent Fuel Pool next to Reactor 4 at Fukushima Nuclear Power Plant. A mistake during this operation could result in a far worse release of radiation than any that has happened so far since the March 11th earthquake and subsequent meltdowns in 2011.

Blogger EX-SKF is keeping an eye on Japanese reporting of this delicate operation, which will take at least a year, and that is just for the SFP for one reactor ((#4)! And assuming all goes well.

NHK, who apparently had a live footage of the scene at Fukushima I Nuclear Power Plant according to people who were watching TV, says it took the truck carrying the cask 10 minutes to go from the Reactor 4 building to the Common Pool which is 100 meters away.

via The First Cask from Reactor 4 Spent Fuel Pool Was Safely Lowered, Transported to the Common Pool | EXSKF.

Tepco’s Photos and Videos Library has been updated with photos of Friday’s operation (Nov. 22nd).

All those who are working on this, as well as all those who have worked on this site since March 11th, 2011, should have their efforts recognized in some way. Not all of them will want their names recorded or publicized, perhaps, but some recognition of the country’s, and possibly the Pacific region’s, gratitude, for what these largely unsung heroes have done and continue to do, is due, IMHO.

So far, there have been no hitches, fortunately. But the operation has been doing the easy part: transferring the undamaged spent fuel rods. Removing the damaged ones will be the tricky part.


I recommend the following digital products: WP GDPR Fix, a WordPress plugin that quickly and easily helps you make your WP blog GDPR compliant. Brett Kelly's "Evernote Essentials", Dan Gold's $5 guides to Getting Everything Done with Evernote and Springpad, and DocumentSnap Solutions' Paperless Document Organization Guides. Be sure to try DocumentSnap's free email course on going paperless first before buying his products. Sign up for it on his homepage.

Disclosure of Material Connection: My recommendations above are “affiliate links.” This means if you click on the link and purchase the item, I will receive a commission. Your cost will be the same as if you order directly. I only recommend products or services I use personally and believe will add value to my readers. This disclosure is in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Tags: ,

Best scenario for all economies: mild deflation?

The natural path for all economies is a mild deflation in the amount of productivity improvement, averaging 2-3% annually.

via Here Comes the Spin (Central Banks) in [Market Ticker]

Coninuing my investigation into inflation (the desirability of) and deflation (the evils of), the above is one businessman’s opinion. He writes (emphasis in the original):

I’m going to keep hammering on this until people wake up and start demanding it: The natural path for all economies is a mild deflation in the amount of productivity improvement, averaging 2-3% annually.  That deflation — that is, increased purchasing power for the people of a nation, is yours.  It belongs to you.  It comes into existence because you perform your job, whatever it may be, with more efficiency due to the improvements of technology over time.

You do more with less and since you are the one doing the “more” the fruits of that effort are your property, not someone else’s.

What prompted his outburst is a Bloomberg news article, which states in part:

Central banks are finding it’s easier to push up stock and home prices than it is to prevent inflation from falling short of their targets.

While declining costs for everything from gasoline to coffee can be good news for consumers, disinflation makes it harder for borrowers to pay off debts and businesses to boost profits. The greater danger comes when disinflation turns into deflation, which leads households to delay purchases in anticipation of even lower prices and companies to postpone investment and hiring as demand for their products dries up.

The above argument against deflation, namely that it “leads households to delay purchases in anticipation of even lower prices and companies to postpone investment and hiring as demand for their products dries up” is an old one, and has been challenged before now. Just how solid is it? Read the rest of this entry »


I recommend the following digital products: WP GDPR Fix, a WordPress plugin that quickly and easily helps you make your WP blog GDPR compliant. Brett Kelly's "Evernote Essentials", Dan Gold's $5 guides to Getting Everything Done with Evernote and Springpad, and DocumentSnap Solutions' Paperless Document Organization Guides. Be sure to try DocumentSnap's free email course on going paperless first before buying his products. Sign up for it on his homepage.

Disclosure of Material Connection: My recommendations above are “affiliate links.” This means if you click on the link and purchase the item, I will receive a commission. Your cost will be the same as if you order directly. I only recommend products or services I use personally and believe will add value to my readers. This disclosure is in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Tags:

JGBs Declared Dead by Mizuho as Kuroda Hides Risks: Japan Credit

“The JGB market is dead with only the BOJ driving bond prices,” said Tetsuya Miura, the chief bond strategist at Tokyo-based Mizuho, one of the 23 primary dealers obliged to bid at government auctions.”

Dead? That doesn’t sound very healthy, does it, boys and girls?

This blog post is part of a series on the subject of inflation and deflation, specifically asking if deflation is really so bad (consumers love lower prices), and if inflation is really so desirable. These lead to other questions, such as, “has inflation worked in the past to boost a flagging economy?” and “who benefits from inflation?” and “is deflation the same as falling prices?” and “who is really frightened of deflation?”

From Bloomberg’s  JGBs Declared Dead by Mizuho as Kuroda Hides Risks: Japan Credit

What caught my eye (my emphasis):

Totan Research Co. and Spiro Sovereign Strategy also said BOJ monetary stimulus is cutting the tie between economic fundamentals and bonds, which yield 0.6 percent for 10 years, the least in the world.

… Prime Minister Shinzo Abe, counting on fiscal and monetary stimulus to end 15 years of deflation, has yet to decide on whether to go ahead with the second planned increase to 10 percent by 2015.

Has Japan really suffered from deflation for 15 years? Let’s see what the Federal Reserve charts say:

7138a

Hmm. A fairly stable line with a brief period of inflation starting at the end of 2004 and ending sharply in 2008.

“These low yields are responsible for the lack of fiscal reform in the face of Japan’s worsening finances. Policy makers think they can keep borrowing without problems.” …

Why on earth would they think that? Could it be because that is what policy makers have been doing in Europe and the U.S., apparently with impunity?

 … “The BOJ’s priority is to lower Japan’s real interest rates and ensure an end to deflation, even if they have to sacrifice liquidity and trading volumes in the bond market,” Takatoshi Kato, a former top currency official at Japan’s Ministry of Finance said in an interview on Oct. 31 in Tokyo.

… “Market functions are sacrificed for the sake of ending deflation,” said Izuru Kato, the Tokyo-based president of Totan, a research unit of money-market broker Tokyo Tanshi Co. A reduction in monetary stimulus could cause a drop in bond prices, which “will make it difficult for the BOJ to normalize policy,” he said.

Why is inflation apparently so desirable? Rising prices means energy becomes more expensive as Japan has to import all its energy or at least the resources to produce its own energy (apart from a small percentage produced by water and geothermals). It also means that citizens will have to tighten their belts because wages are not rising (why should they? The stock market rises are not due primarily to increased production).

So why is inflation so desirable? Who wants it? Consumers don’t.  But the politicians do. Why? Politicians in the EU and a former governor of the ECB is also very worried about deflation, according to a Telegraph report:

Writing in The Telegraph (UK), Ambrose Evans-Pritchard reported that the data stunned the markets. He quotes remarks from a number of financial-market analysts who called this a “debt deflation trap.”

Evans-Pritchard also marshals the authority of an unnamed former governor of the ECB who is quoted criticizing the ECB for not acting to head off the deflation threat through more activist monetary policy.[“Europe moves nearer Japanese style deflation trap,” Daily Telegraph, 31 October 2013.]

A writer on the Mises.org website asks, How does a reduction in consumer price inflation become “deflation”? How does a minor improvement in the purchasing power of consumers become a problem for liquidity in the financial markets?

Good questions! And the answer?

European politicians and central bank policy-makers are concerned not about consumer price reductions but about real reductions in the money supply as such reductions would force governments to abandon permanent budget deficit monetization. That is why they maintain a monopoly over the power to create money and they like to control where money enters the economy. Politicians use these advantages in two ways.

First, they are all, with the sole exception of the Bundesbank, “inflationists” when it comes to monetary policy. Inflation (that is, an increase in the money supply) steadily reduces the purchasing power of a fiat money and, in parallel, eases the burden of debt repayments over time as nominal sums become progressively of less relative value…

for highly indebted Eurozone governments, price inflation is the perceived “get out of jail” card, permitting them to meet their debt obligations with a falling share of government expenditures.

With Japan’s debt-to-GDP predicted by the IMF to grow to 244% this year, “inflating their way out of debt” might well seem attractive to  Japanese lawmakers.

So, inflation (meaning an increase in the money supply) is desirable to the central bank and the government. What about the consumers? They vote, but apparently they don’t care, or else they are happy to vote for politicians who want to take away their purchasing power so that the government can continue deficit spending. It’s not even about saving the asses of Japanese companies that are in difficulties due to falling prices (i.e. failing competitiveness).

Yet growth of PIIGS governments’ debts as a proportion of GDP (Table 1) have now crossed above the critical 90 percent ratio advised by Rogoff and Reinhart as being the threshold above which growth rates irrevocably decline. [K. Rogoff and C. Reinhardt, “Growth in a Time of Debt,” American Economic Review (May 2010). Reported that among 20 developed countries studied, average annual GDP growth was 3–4 percent when debt was relatively moderate or low (i.e., under 60 percent of GDP), but it dipped to just 1.6 percent when debt was high (i.e., above 90 percent of GDP).]

Wha….? So economists know that a debt-to-GDP rate of over 90% is correlated with an irrevocable economic decline. How much is Japan’s debt-to-GDP rate again? 244%!?!?!?

I must be dim. I still don’t get why inflation is such a good thing? Do you?


I recommend the following digital products: WP GDPR Fix, a WordPress plugin that quickly and easily helps you make your WP blog GDPR compliant. Brett Kelly's "Evernote Essentials", Dan Gold's $5 guides to Getting Everything Done with Evernote and Springpad, and DocumentSnap Solutions' Paperless Document Organization Guides. Be sure to try DocumentSnap's free email course on going paperless first before buying his products. Sign up for it on his homepage.

Disclosure of Material Connection: My recommendations above are “affiliate links.” This means if you click on the link and purchase the item, I will receive a commission. Your cost will be the same as if you order directly. I only recommend products or services I use personally and believe will add value to my readers. This disclosure is in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Tags:

Is it time to get other companies involved in the Fukushima cleanup? And how not to criticize

TOKYO Nikkei–With no end in sight to the contaminated water problem at Tokyo Electric Power Co.’s crippled Fukushima Daiichi nuclear plant, there is a growing sense that the cleanup efforts are failing because of Tepco’s insistence on using its own technology and not looking for help outside its tight circle of corporate and government allies.

via 2013/10/26 19:07 – ANALYSIS: Has Tepco’s Go-It-Alone Approach Reached Its Limits?.

The article gives a couple of frightening examples. The first concerns “the advanced liquid processing system (ALPS), which is capable of removing 62 different types of radioactive substances from contaminated water.”

ALPS was initially scheduled to go operational last autumn, but trial runs did not begin until this March… Just three months later, one of the ALPS tanks was found to be leaking radioactive water and the entire system was shut down.

When will it be operational again? Tepco cannot say.Who built this troubled system? Toshiba.

So the government solicited bids for a new water treatment system. Guess who won the bid? Toshiba!

On Oct. 10, the Ministry of Economy, Trade and Industry awarded the project to Tepco, Hitachi-GE Nuclear Energy Ltd. and Toshiba Corp.

Have other companies developed similar and more successful water treatment systems? I’m glad you asked. Yes, they have. One of them is French company Areva. They also made a bid, but lost.

The problem is not just that Japan wants to keep this cleanup work to Japanese companies. The companies involved in nuclear power plants form a tightly connected network, nicknamed the “nuclear village”.

The Nikkei comments:

Japan’s plant engineering firms and manufacturers have a global edge in developing water-treatment and groundwater control systems. Why the members of the nuclear village do not harness those firms’ technological expertise is a mystery.

“It’s a mystery” is a euphemism, something Japanese are very good at. It’s a veiled criticism, a form of criticism that is socially and politically acceptable when dealing with sensitive matters.

Mike “in Tokyo” Rogers reported earlier in October on what happened to a prominent TV news personality who was less euphemistic in his criticism of the government budgeting more for the 2020 Tokyo Olympics than for cleaning up Fukushima (and see more details in the comments of that post) And even his comments were typically indirect*. When criticising others (and especially others in power), Japanese are instinctively careful.

There are, I think, several reasons for this and cowardice is not among them. I’ll get to these later, but for now, let’s get back to Tepco’s never-ending sad story.

The Nikkei continues its criticism of Tepco and the government by pointing out that other private companies, including some abroad, have already developed technologies to deal with some of the problems Tepco is facing in Fukushima.

One high-profile example of a nuclear power operator refusing to accept help from the outside can be found at Japan Nuclear Fuel Ltd.’s reprocessing plant for spent nuclear fuel in Rokkasho, Aomori Prefecture. The plant — which plays a critical role in Japan’s nuclear policy — is still running on an experimental basis due to a series of problems despite being 18 years behind schedule.

France put its reprocessing method to commercial use in the 1970s. But Japan rejected the French know-how, adamant about developing its own technology.

Then, using a typical Japanese rhetorical style of putting the punchline in the conclusion, rather than at the beginning of the article, the Nikkei writer delivers the main point of his article: the problem of removing the fuel rods from the reactors. This is the second, frightening example:

Decommissioning the Fukushima plant, which will probably take several decades, involves the dangerous work of removing melted fuel rods from the furnace — a task with which Japan has zero experience. The government has ordered the Japan Atomic Energy Agency to begin basic research on the subject.

But the technology, developed by the private sector, is already available in other countries. The U.S. has removed all the fuel rods from a reactor at the Three Mile Island nuclear plant in Pennsylvania that suffered a meltdown in 1979. In another example, Russia handled the removal work at the Paks nuclear plant in Hungary.

Japan does not have the luxury of spending time needed to develop original technology. Limiting all the work to the members of the nuclear village will only lead to more problems down the road.

In my experience, Japanese people tend to be hypersensitive to criticism, partly as a result of the Read the rest of this entry »


I recommend the following digital products: WP GDPR Fix, a WordPress plugin that quickly and easily helps you make your WP blog GDPR compliant. Brett Kelly's "Evernote Essentials", Dan Gold's $5 guides to Getting Everything Done with Evernote and Springpad, and DocumentSnap Solutions' Paperless Document Organization Guides. Be sure to try DocumentSnap's free email course on going paperless first before buying his products. Sign up for it on his homepage.

Disclosure of Material Connection: My recommendations above are “affiliate links.” This means if you click on the link and purchase the item, I will receive a commission. Your cost will be the same as if you order directly. I only recommend products or services I use personally and believe will add value to my readers. This disclosure is in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Tags: ,

EXSKF Coverage of Fukushima I Daiichi Nuclear Accident, Nuclear Disaster in Japan

I’ve added EX-SKF’s blog to my @Japan blogroll in the sidebar. He has updates on the situation in Fukushima, much of it translated from Japanese media sources, as well as the twitter feeds of a couple of workers inside the plant who have been there since 2011. His opinion is often critical, but usually thoughtful and thought-provoking. He often includes photos, videos and diagrams (many provided by TEPCO at press conferences, or posted on TEPCO’s Japanese website). I find these very useful to get a clear picture of what is going on.

Recently, he’s been blogging about U.S. political press announcements about Syria, but here’s an excerpt from a recent Fukushima one, which is what he mainly writes about.

“National Government at the Forefront” on Contaminated Water Problems at #Fukushima I Nuke Plant Means Committees, Teams, Groupsthat would make Sir Humphrey Appleby proud.

Now that Prime Minister Shinzo Abe declared to IOC Commissioners who gave him the 2020 Summer Olympic in Tokyo that his government would be at the forefront in dealing with contaminated water problems, and that “the effect of contamination” carefully note the word “effect” was confined within the plant harbor to the great puzzlement of TEPCO who said they hadn’t advised Mr. Abe on anything, the government is in full gear – creating committees.

Let’s see. How many committees, teams, working groups are there on the Fukushima I Nuclear Power Plant accident?

He is not overly optimistic on the government “taking charge” of the Fukushima cleanup operation.

Other than the working group set up by NRA which actually is very useful in analyzing the situation and suggesting courses of action, the rest look like good venues for government officials, bureaucrats and university professors to earn extra per diem, and waste of resource for TEPCO who will have to send mid to high-ranking managers and prepare presentations to placate the officials and bureaucrats.

via EXSKF Coverage of Fukushima I Daiichi Nuclear Accident, Nuclear Disaster in Japan.

Below are some of his personal comments, which he usually appends after quoting (and translating, if the source is in Japanese) news sources.

First, from Sunday, September 8, 2013 | RO Waste Water Leak at #Fukushima: TEPCO’s Video of Tank Patrol by Workers (UPDATED)

If the national government is serious about tackling the problems at Fukushima I Nuke Plant, the very first thing they should do is to change this employment scheme of subcontracting pyramid which gives each layer profit by skimming off workers’ wages and gives the top contractor(s) plausible deniability that they do not know about work conditions of the workers in the lower layers of the pyramid and therefore they are not responsible for the workers.

But I fear the government is not serious, and only interested in evading their responsibility and finding others to blame for any failure, past, present, and future.

And from For Japanese Politicians, Contaminated Water Leak at #Fukushima Is All About “Who to Blame” (Other Than Themselves, Of Course)

What’s amazing to me personally is that after nearly two and a half years of abysmal track record of the national government when it comes to dealing with the nuclear accident and its aftermath (contamination, decontamination, compensating the victims, monitoring, etc.), many Japanese are still looking longingly to the national government for magical solutions.

“TEPCO cannot be trusted!” they say. But somehow they can still trust their government.

Read the rest of this entry »


I recommend the following digital products: WP GDPR Fix, a WordPress plugin that quickly and easily helps you make your WP blog GDPR compliant. Brett Kelly's "Evernote Essentials", Dan Gold's $5 guides to Getting Everything Done with Evernote and Springpad, and DocumentSnap Solutions' Paperless Document Organization Guides. Be sure to try DocumentSnap's free email course on going paperless first before buying his products. Sign up for it on his homepage.

Disclosure of Material Connection: My recommendations above are “affiliate links.” This means if you click on the link and purchase the item, I will receive a commission. Your cost will be the same as if you order directly. I only recommend products or services I use personally and believe will add value to my readers. This disclosure is in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Tags: ,

Update – Highly Toxic Water Leaked From Tank Could Have Flowed Into Sea

TEPCO has still not been able to determine from where in the tank the radioactive water is escaping. The container is 12 meters in diameter and 11 meters high, built of steel plates held together by bolts.

TEPCO has collected 4 tons of the [300 tons of] leaked water, and said most of the remaining water likely seeped into the ground.

But TEPCO also said Wednesday it detected 6 millisieverts per hour of radiation inside a drainage channel not far from the tank, possibly indicating some of the leaked water entered the gutter.

The channel connects to another drainage channel which leads to the sea.

A low concrete wall exists near the tanks to prevent leaked water from spreading, but TEPCO left open drain valves attached to the wall, thinking that would make it easier to detect leaks. The valves are now closed.

via 2013/08/21 22:38 – Highly Toxic Water Leaked From Tank Could Have Flowed Into Sea.


I recommend the following digital products: WP GDPR Fix, a WordPress plugin that quickly and easily helps you make your WP blog GDPR compliant. Brett Kelly's "Evernote Essentials", Dan Gold's $5 guides to Getting Everything Done with Evernote and Springpad, and DocumentSnap Solutions' Paperless Document Organization Guides. Be sure to try DocumentSnap's free email course on going paperless first before buying his products. Sign up for it on his homepage.

Disclosure of Material Connection: My recommendations above are “affiliate links.” This means if you click on the link and purchase the item, I will receive a commission. Your cost will be the same as if you order directly. I only recommend products or services I use personally and believe will add value to my readers. This disclosure is in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

Tags: ,