Posts Tagged Japanese government

Circling the drain

Japan’s economy looks like it is going down the toilet. There are too many articles warning about the inevitable looming disaster to list them all, but here are two lists, one from the ever-vigilant Mish, and the other from ZeroHedge (can’t get a URL for search results on ZeroHedge, but go here and type in “Japan”; results may not be in chronological order).

Here, on ZeroHedge,  is a recent FT interview with the top economist at Mizuho Bank (Japan). Asked why he is not excited or optimistic about Abenomics, he replies, “because I don’t suffer from amnesia”, and goes on to remind listeners of some recent history which somehow the Japanese media rarely mention.  I wonder why?


Japan mulling another FX intervention: report – Yahoo! News


TOKYO (Nikkei)–In line with the yen’s rise to the 76 level to the dollar, the government account used for currency interventions is believed to have seen its foreign exchange valuation loss balloon to about 40 trillion yen.
This fund has about 20 trillion yen in reserves, so it is effectively some 20 trillion yen in the red.

On the other hand:

Prime Minister Naoto Kan has taken a hands-off approach regarding the strengthening yen, and the lame-duck leader remained aloof even as the currency rose to a postwar high Friday evening.

via 2011/08/20 05:18 – With Departure Near, Kan’s Response To Rising Yen Is Muted.
If a lame-duck PM means someone who does nothing, maybe we should be praying for yet another lame-duck PM, or possibly someone even lamer?

via 2011/08/20 05:45 – Forex Intervention Fund Has Y40tln Paper Loss.

This is surreal: “will seek understanding for its unilateral action…”? When every major nation with a central bank is engaging in currency wars? When the dollar and the euro are tanking irretrievably, so people are rushing to buy the yen as a “safe haven”? Will Japan prop up the entire economies of the U.S. and Europe? Scintillating and insightful cultural commentary follow below:

If the yen continues to rise, Japanese authorities will step into the market to weaken the currency, and will seek understanding for its unilateral action from its Group of Seven counterparts, the paper said without citing sources.

via Japan mulling another FX intervention: report – Yahoo! News.

This is typical Japanese: never do anything unilaterally. It’s the big no-no. Always consult with others involved before taking drastic action, so as not to cause “confusion”, i.e. rock the boat. Basically, it means you get permission from your peers. Why did more people not immediately flee on their own initiative after Fukushima blew up, but waited for official notice? Because of this cultural “rule”. It’s not as simple as saying they are all sheep and need to be told what to do by authorities. That is partly true, but the reason they wait for official notice is that this takes away the personal responsibility for individual initiative: now they are fleeing not because of selfish, personal reasons of survival and “devil take the hindmost”, but they have official sanction: it’s what everyone is supposed to do, so no blame will fall on them for appearing “selfish”, i.e. putting their petty personal needs before those of the group.

But in this case, it’s meaningless! All the G7 countries are engaging in currency wars! They all “understand” perfectly why Japan is doing what it is doing – they are doing the same. But “understanding” (in Japanese) means “agreeing with and giving permission/sanction to”. Is this likely in this case? Is it even necessary?

The wording shows how deeply etched in the culture and language is this idea of collectivism: of everyone “understanding” everyone else and everyone putting the group’s needs before their own personal ones. The Japanese try to convince themselves that they are part of the world community, or at least of the group known as G7. Thus official statements must be so phrased as to express this world view. Even tho in this case it is obviously dog-eat-dog! “Oh yes! DO go ahead and cheapen your currency! WE don’t mind! We UNDERSTAND your plight. You have no CHOICE!! By all means!”

Surreal. And this isn’t even to touch on the question of whether or not this interference in the currency markets will have any lasting effect.

TOKYO (Nikkei)–In line with the yen’s rise to the 76 level to the dollar, the government account used for currency interventions is believed to have seen its foreign exchange valuation loss balloon to about 40 trillion yen.

This fund has about 20 trillion yen in reserves, so it is effectively some 20 trillion yen in the red.

via <a href=””>2011/08/20 05:45 – Forex Intervention Fund Has Y40tln Paper Loss</a>.

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Public hoarding old rice over fallout fears | The Japan Times Online

“The buying spree indicates deep public distrust in the government’s handling of the food safety issues…”

I disagree. It’s simply common sense. The public realises that the government is physically incapable of guaranteeing the edibility of rice all over the country. To do so will mean checking for radioactivity in every rice stalk in Japan. The public realises that the government cannot be expected to do this. At best the government will check a few rice stalks randomly sampled from a few randomly selected rice farms in a few randomly selected prefectures.

That doesn’t tell me about the safety of the rice I buy at the local supermarket. Common sense tells me rice packaged and shipped prior to March 11 will be safer than post-March-11 rice.

The public is simply realising that this disaster is simply too big for any single group of people to manage. There is no alternative in this case but for individuals, consumers and farmers, to use their own initiative.

Consumers are starting to hoard last year’s rice over concerns the next crops may be contaminated with radioactive materials released from the Fukushima No. 1 power plant, retailers said Friday.

The Agriculture, Forestry and Fisheries Ministry is working to establish a system for ensuring the safety of rice ahead of the autumn harvest, with plans to inspect the crop in two stages.

The buying spree indicates deep public distrust in the government’s handling of food safety issues amid the nuclear crisis following a scare over contaminated beef.

via Public hoarding old rice over fallout fears | The Japan Times Online.

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Japan throws out its conservative government after 50 years

TOKYO - AUGUST 11:  Yukio Hatoyama, President ...
Image by Getty Images via Daylife

Here are some links I found today:

  1. From the Telegraph:
    1. Japanese election: Hatoyama’s agenda includes tax breaks and distance from the US Yukio Hatoyama wooed the Japanese electorate with an agenda for change, but the 62 year-old nicknamed the Alien is an unlikely revolutionary.
    2. Japan votes for a new start as ruling LDP loses power after 50 years Japan’s conservative ruling party was crushed by a radical rival on Sunday in a general election that brought an end to one of the democratic world’s longest spells of political dominance.
    3. Landslide election result breaks LDP hold on Japan after 5 decades Japan’s Democratic Party has won a resounding general election victory, surpassing the 241 seats required for a majority.
    4. Japanese opposition sweeps to power The opposition Democratic Party of Japan (DPJ) was headed for a landslide victory in the general elecion with exit polls suggesting that the win might be even larger had been projected.
    5. Family history set to repeat itself as Japan heads to vote for change at polls It is a political tale of two rivals that would not look out place in any best-selling airport thriller: one was Japan’s first post-war prime minister and the other ousted him from power following a decade-long struggle.
  2. From the Independent:
    1. An era ends as LDP swept from power Ruling party projected to lose two-thirds of its seats.
    2. Leading article: a victory with the potential to transform Japan But modernising Tokyo’s entrenched political system will not be easy
    3. ‘The Cold War has ended, but we’re still in that mode’ Yukio Hatoyama has ambitious plans for Japan’s future, he tells David McNeill
  3. From the Financial Times (Asia):
    1. New era for Japan as DPT triumphs Stocks fail to hang on to early gains
    2. ‘Historic rout’ for Japanese government
    3. New era for Japan as DPJ triumphs
    4. Japan elections – live blog
    5. Global insight: A very Japanese revolt Yet the shifting of political tectonic plates – “small earthquake, no tsunami”, as one astute observer put it – is not quite as tumultuous as meets the eye. The result did not come out of the blue
    6. Shift in dealings with US on cards
  4. From the BBC:
    1. Japan victor hails ‘revolution’ (includes a short video)
    2. Hatoyama: vote for change
    3. Profile: Yukio Hatoyama
    4. In pictures: Japanese election
  5. And from a free-market business in the US
    1. An Ill Wind Blows from Japan Before the election The Democratic Party of Japan had talked assiduously about the avoidance of US Debt Hegemony (read: Japan may stop buying or even sell US Treasuries) and in addition they made noises unthinkable just a few years ago – their stance towards China, long thought of as an arch-enemy of Japan, is quite friendly and cooperative.

For more details, visit the English blog Observing Japan.

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Stand up! Stand up, for the Emperor!

Image via Wikipedia

I used to feel sorry for these people, and I do feel a lingering sympathy, but not much and it’s ebbing away quickly.

Why are these people surprised? What were they expecting?  The state is often institutionalized coercion: if they can make everyone study the same subjects, from the same textbooks, why can’t they also force their own employees to stand to attention when the national anthem is played? And if those employees don’t like it, they can leave. Wouldn’t the same thing happen in a private firm?

This does not mean I’m in favour of coercion, by any means.

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Japan’s food statistics

A friend’s shared Google Reader feed alerted me to this video created for the Japanese Ministry of Agriculture, Forestry and Fisheries (MAFF). It contains some interesting statistics, and begs some interesting questions. E.g.:

Japan only produces about 40% of the food it consumes. This is the lowest among all major developed nations. This is the result of the significant change in the Japanese people’s diet

and goes on to describe, and lament, the gradual change from a diet of fish, rice and vegetables (“a nutritionally balanced diet”) to consuming more meat, fat and oil.

  1. Why has this change happened? The video makes it sound as if those stupid, unenlightened, unpatriotic and selfish Japanese consumers made this change happen by their intransigent demands and their refusal to listen to the wisdom of their elders and betters. However, consumers cannot buy what is either not for sale or what is priced beyond their budget. In addition, I recall a short podcast by Dr Andrew Weil (A Toxic World), in which he says, “how can the [U.S.] government say it is innocent… when, if you go into a supermarket in this country, the most expensive calories you can buy are fruit and vegetables, and the cheapest calories you can buy are all the low-quality carbohydrate foods, and the reason those are cheap is because the Federal Government subsidizes those crops and artificially drives down prices. The corporations take the position that, it has nothing to do with them, they are just giving people what they want.”
  2. Why is the government putting out this propaganda? The aim of the video is, what, exactly? To protect and improve the health of the Japanese people? To protect and improve the prospects of the Japanese farmers? To prepare the public to accept tariffs on and higher prices for meat, oil and fats? To prepare everyone for higher food prices all round? (And that this acceptance will be patriotic, therefore objections may be considered unpatriotic?).

Lots of soy and cereal grains are needed to make oil and feed, so they are being imported in large quantities.

  • This gives us a clue: a diet rich in meat, oil and fat is more capital intensive, less efficient, and therefore provides more profits for more people.

Although Japan imports a lot of food, it also disposes of more edible food than the entire world food aid.

  • Woah!

My overall question is why market forces, combined with an informed populace, cannot be left to work their magic on their own? Why stay on the road towards more control and more manipulation? The Japanese government, and much of the population, seems to take the following attitude unquestioningly; as an artist put it, “Millions and millions and billions of people becoming artists? Are you out of your mind? People are herd animals. They need dogs to move them around into the right places.”

In other words, does the MAFF video represent a step towards greater freedom, or towards less freedom and more of the same, centralised, “Daddy Government knows best” statism?

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