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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.
Manufacturing in Japan
– Wikipedia
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 – You Tube
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…
Few
realize the most important factor behind the nation’s woes is its horrific
demographics, such as the world’s oldest population…
List of
countries, by Median Age
…and
lowest birth rate…
List of
countries of the world, ordered by Birth Rate
…ASSURING
an ongoing EXODUS of business to China will continue ad infinitum…
Is
Japan losing its competitiveness?
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…
List
of National Debt, by Country
…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…
Fukushima
Daiichi nuclear disaster
Compounding
the nation’s woes are its persistently strong
currency – care of strong national savings and (until this year)
persistent trade surpluses…
…despite
BY FAR the most aggressive currency intervention in GLOBAL HISTORY…
Bank
of Japan “quantitative easing” to suppress the yen
…and
sheer panic in the nation’s Central Bank, where an incredible NINE
Finance Ministers have resided in the past five years…
Minister
of Finance (Japan) – Wikipedia
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…
In
Japan, sales tax increase advances in parliament despite ruling party rift
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.
PROTECT
YOURSELF, and do it NOW!
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