Abenomics Crash and Burn

On December 29, 2012, I wrote that Abenomics would fail (please refer to: Here's Why A Weak Yen Will Destroy Japan). One year later the Nikkei 225 was sitting pretty at about ¥15,600 + (actually went up to over ¥16,200!) and the cracks were beginning to show on Abenomics. Immediately after the Nikkei tanked for a ¥518 drop in one day, on June 5, 2013, I added another missive... Abenomics Has Failed showing that the twisted reasoning of Abenomics needed a very weak yen to ever have the chance of succeeding (which it doesn't) and that the market doesn't like instability (as if ¥500 daily increases and drops in price don't point to market instability!)

The word on the street back then (and today) was was that "they" needed a yen that was much weaker than ¥100 to the USD (I understood that to mean ¥120 to USD) to ever have the chance of succeeding and that the yen sitting around ¥100 to the USD was the death knell of Abenomics. 

From those posts I received 3 emails in total from "financial advisors" in Japan (and on Linkedin message) telling me something along the lines of "It's too early to judge whether or not Abenomics is a failure." Two guys challenged me by adding something like, "Do you think I should give up my positions just because you say Abenomics is a failure?"

Keep in mind that these people were expecting, like a lot of people, that Abenomics would have had the Nikkei 225 at or over ¥20,000 by April, 2014. Well, folks, it's March 29, 2014. A 60% sales tax increase is about to be implemented (3 percentage points) and the Nikkei is about ¥1600 below its Dec. 30, 2013 high of ¥16,291.31. Today, March 29, 2014, the Nikkei sits at ¥14,696.

For you "financial advisors," I don't think you should "give up your positions." Do what you want with your money.

But I do think you use your heads and stop advising people to funnel their retirement money into the stock market and churning accounts so that you can earn a commission on selling this crap and a business plan built on jawboning and hope. How about doing some real research (you know investigation and basic simple math?) and getting people into something that will benefit them, rather than your company bottom line or your commissions? (I know the term, "needs selling," but that doesn't mean YOU need to sell; it means you are supposed to sell people what they need.)

By the way, you can earn the same commissions by recommending stable investments over investments built on "Hopium."

One of these investors made a bet with me for dinner and drinks claiming that Abenomics and the Nikkei were good investments. Since he's down ¥1695 on the Nikkei (about a %10 loss) since the highs, think I should call him up and ask when he's buying my dinner? 

Nah. Poor guy. For one, he's lost a bunch of money - as well as the money of his clients (of which come from a pool that I hope is quickly shrinking) - and, two, I don't eat hamburgers nor do I drink anymore.

Well, today, comes more and more damning evidence that even Mr. & Mrs. Watanabe have figured it out; while everyone and his economist were expecting an increase in household spending before the sales tax increase, household spending has dropped! From Zerohedge: Japanese Prepare For "Abenomics Failure", Scramble To Buy Physical Gold 

"(Household spending) dropped 2.5% on expectations of a 0.1% increase in the month ahead of Japan's infamous sales tax hike."

Hmmm? That is surprising to say the least! So the Japanese aren't buying stuff?... But wait a minute! What are they buying if they aren't buying junk they don't need?

Well, lookie here, even though gold is in a bear market, they are buying precious metals!

From the very same Zerohedge article:

"Tanaka Kikinzoku Jewelry, a precious metals specialist, reported that sales of gold ingots across seven of its shops are up more than 500% this month. At the company’s flagship store in Ginza on Thursday, people queued for up to three hours to buy 500g bars worth about Y2.3m ($22,500). March has been the busiest month in Tanaka’s 120-year history." 

And just to add to the good news all around, Bloomberg reports: 

Japan’s trade deficit widened to a record in January as surging import costs weigh on Prime Minister Shinzo Abe’s campaign to drive a sustained recovery. The 2.79 trillion yen ($27.3 billion) shortfall reported by the Ministry of Finance in Tokyo today exceeded the 2.49 trillion yen median estimate in a Bloomberg News survey of 28 economists. Imports rose 25 percent from a year earlier and outbound shipments gained 9.5 percent. 

Yes, indeed.

This Nikkei 225 at ¥14,696 is an illusion and I am expecting the Nikkei to slide far under ¥14,000 as soon as the figures come out for household consumption for April to July... I wonder if it can hold at ¥10,000?

You "financial advisors" think sales of gold can help to ease the drop in household spending? I don't. There aren't too many people in the middle and lower income brackets (the vast majority of the population) who are running around with ¥2.5 million yen to buy 500 gram gold bars... They are just trying to make ends meet on a daily basis.

But, hey, you financial advisors, I advise that you "hold your positions"!

Propaganda and Russia

The propaganda coming out of the mass media is ridiculous. Recent news stories appearing on all major US news sites continually speak of "Putin's global territorial ambitions." So, suddenly, Putin is the new "Hitler" is he?

Here's a funny one from ABC: 

Hillary Clinton told the audience that "if this sounds familiar, it's what Hitler did back in the '30s".

Really? Total bombast. This stuff would be laughable if these people wrote for Mad Magazine... But, no! Alas, they have a government to feed and an agenda (and you are not part of it!)

For another example, here's a recent Washington Post article: 

Vladimir Putin’s speech Tuesday — disavowing Russia’s Soviet past, glorifying its Orthodox roots, decrying the unjust price paid by Russians when the Soviet Union collapsed and condemning the West’s hypocrisy — upended the foundations of the post-Cold War narrative. The widespread idea that Crimea could be ceded without cascading consequences arose from the erroneous belief that Putin is reconstituting the Soviet Union. The Soviet past was never his frame of reference. 

Putin’s expeditionary wars are fueled by Russian exceptionalism: a vision for a renewed union based on a common Russo-Orthodox destiny. In other words, Putin’s ambitions range beyond the boundaries of the former U.S.S.R. and into Europe.

"Putin’s ambitions range beyond the boundaries of the former U.S.S.R. and into Europe!!!" Horrors! I guess if we don't stop him now; if we don't fight them over there; we'll all be speaking Russian... Ha! Half of all of today's American high school grads can't even speak proper English!

What a bunch of self-serving selective memory recall! Right! At least they did get the one part about "west's hypocrisy" correct. I'd like to point out that this article was written by Molly K. McKew and Gregory A. Maniatis who were advisers to Georgia’s president, Mikheil Saakashvili, and his national security adviser during and after the 2008 war with Russia.... As if they don't have an agenda! Ha!) Please refer to: The Real Aggressor by Justin Raimondo

"Putin's territorial ambitions"? Let's not mention US and NATO breaking the deal and pushing a territorial expansionist policy in Eastern Europe right on Russia's doorstep as that would be 'inconvenient!'

The USA and NATO are the true root cause of all of what is going on. 

When the Soviet Union fell, then US president Reagan promised then Soviet leader Gorbachev that NATO would never move into Eastern European countries. But, that was Reagan, every US president since then has pushed the envelope and driven NATO (an alliance against Russia and the former Soviet Union) all the way up to the very borders of Russia.

Gee, who'd a thunk the Russians wouldn't like that?

Of course the Russians don't like it when we talk about a military alliance AGAINST them (NATO) coming to Georgia, Ukraine, etc... Militarist right wing military-industrial complex morons in USA.

It's obvious that Russia is going to lash out when we surround them with a military alliance that goes right to their borders. This isn't rocket science. 

The USA and NATO are nothing but bad news for everyone. What business it it of ours if people on the other side of the world want to be a part of this country or that? 

Who cares? Let them decide by themselves.

Before WWII, the Brits and the French guaranteed the Polish government that they'd go to war to protect them if the Germans invaded. So the Polish government became intransigent in negotiations with Hitler (see: Churchill, Hitler and the Uneccessary War by Patrick Buchanan) and wouldn't deal with Hitler on the return of former German territories. This lead to World War II. (And the loss of Poland anyway!)

If the people of eastern Ukraine want to be a part of Ukraine, or Russia, or Disneyland, let them vote and decide (I hate voting too, but that's a different story). There is absolutely NO NEED for the military to decide this. 

Remember when Vaclav Havel allowed Czechoslovakia to be dived by peaceful secession? That was smart. 

Think about it, folks, we don't care if, say, Texas wants to be a part of Mexico or USA or an independent nation. Let those people decide by themselves. It is their land. It is none of our business!

Peace! No military. Why is it our business what those people wish to do or what abstract national boundaries they want to live in? If they have peaceful relations, then they can live their lives as they wish and go where they want to go.

As for me, I am only concerned with keeping peace and what goes on in my own neighborhood!

We should have dismantled the US and NATO war machine in 1991. That we didn't and the going's on today just go to show that the US empire and the military machine needs war to survive. War is truly the health of the state.

We have zero business in this mess. We never had any business in this European mess. Even in World War I! What business of ours was it if Europe is run by a king or a kaiser? (Of course, yes, I know, big western banks don't like it - they lose money.)

The people do not want this war. The government's do. Government is an abstract, so are national boundaries.

We should try to make peaceful relations and free trade with everyone. 

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Inevitably, some statist will complain about what I wrote here as "unrealistic" and ask what I would do.

Here's what I would do and how I see the situation:

I think those people in the Ukrainian government might be a bit more friendly and smarter in negotiations with Russia if they didn't think NATO or the EU or USA was going to back them up (see above).

If they are not careful, the Russians might invade them and kill a bunch of people (as well as killing those in the Ukraine government).

So, if the Ukrainian government were smart (and wanted to save their lives), they'd do like Vaclav Havel did in the former Czechoslovakia and allow the people in all regions decide - not globalist expansionary countries who are actually run by big international banks and monetary systems. 

That's EXACTLY what I would do. 

Half a loaf of bread is better than war or no bread.

US Government Hypocrisy: Rejects Crimea Voter Turnout at 79% - US Presidential Turnout Much Less But OK!

Even though the people of Crimea have turned out in massive numbers and, reportedly, voted overwhelmingly to join Russia tomorrow, the US Mass Media reports in US rejects Crimea vote, says Russian actions 'dangerous':

Washington (AFP) - The United States strongly rejected Crimea's vote Sunday on breaking away from Ukraine, and called Russian actions in the crisis "dangerous and destabilizing."

Voter turnout in Crimea was 79% and 95% of the votes were favorable to joining Russia. AFP reports in: Crimea votes 95.5% to join Russia in referendum: preliminary results

Simferopol — Crimeans voted 95.5 percent in favour of joining Russia in a disputed referendum on Sunday, according to preliminary results with 50 percent of ballots counted, local authorities said. Referendum commission chairman Mykhaylo Malyshev said 3.5 percent had voted to remain in Ukraine with wider autonomous powers and 1.0 percent were "spoiled ballots".

Why is this funny and why is the US government remarks such hypocrisy?

Well, according to Wikipedia: ‪Voter turnout in the United States presidential elections‬, did you know that a 79% turnout is higher than every voter turnout in the United States for US presidential elections in over 114 years? That's right. The turnout in the Crimea for this election surpasses the turnout for every US presidential election since 1900...

What's the excuse for the US government to say that they will not recognize a popular vote that far surpasses the percentage of the people who vote for the US president in presidential elections? 

The US government says they will "not recognize the results" because of "intimidation by the Russian military"?

From AFP:

"This referendum is contrary to Ukraine's constitution, and the international community will not recognize the results of a poll administered under threats of violence and intimidation from a Russian military intervention that violates international law," White House spokesman Jay Carney said.

Ha! Ha! Ha! Right... And elections held in Iraq and Afghanistan while under the US military boot and with hundreds of thousands of US troops in their countries is different? 

Oh, yeah. I forgot; people LIKE having US soldiers point guns at them. They DON'T like Russian soldiers doing the same.

The only thing the US government can say about this business of not recognizing the will of the people in a popular vote is that in the USA, it's the same: the will of the people be damned.

Stinking hypocrites.

PS: You'll never hear me telling anyone that they should, "Get out and vote!" 

‪Recent Ramblings: Anarchism, Death and Vacuum Cleaners

Lots of things I've been thinking about recently...

Yesterday, when I told a group of journalists visiting Japan that I am an anarchist, one of them said, 

"But if there were no government, who would build the roads?" 

I replied, "In Japan, all of the privately built trains and subways (and there are LOTS of them), are fast, clean, always on time and cheaper than the government run trains." 

The Journalist's eyes grew wide as the realization sank in and they all said, 

"Oh, yeah... That's right." 

The privately built train and subway stations are also immaculately clean, modern and are filled with shopping for commuters. They stand head and shoulders above the government run trains and stations that are dirty, broken down, and well, they look drab and poorly maintained; like everything else the government does. Not to mention that the government run train system is shoddy and massively in the red every year and a money drain. The private trains are profitable.

Read more about Japan's privately run transport system here: http://en.wikipedia.org/wiki/Rail_transport_in_Japan#Major_private_railways 

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I haven't been blogging so much recently for many reasons and one of them is that my dear daughter's grandmother passed away after having a stroke. This fine woman was my mother-in-law from my first marriage. Usually, after a divorce, the in-laws experience a bad relation with the former spouse of their child. But this woman helped me greatly and I will miss her very much.

Komako Hiroki. Thanks Ba-chan. Thanks for everything. I will miss you.

What happens when the matriarch passes away? What happens to a family when the glue, the bond, that held the family together for 5 decades passes away? Read: What Happens When Grandmother Has a Stroke... modernmarketingjapan.blogspot.jp/2014/01/grandmother-had-stroke.html

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Even though it is still quite cold in Japan, the plum blossoms herald the coming of spring. When I visited my daughter's grandmother at the wake, I was pleasantly surprised to find the first plum blossoms of spring had blossomed in front of her house.

In spite of the cold, these blossoms braved the weather. Thanks for the present Ba-chan!

Then yesterday, near my home, I saw many more plum trees in full blossom.

The seasons change. Time moves forward. Everything happens for a reason. 

2014 is still a young year. I am reminded of the writings of C.S. Lewis:

"Life is difficult, so let us be good to each other."

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Finally, the readers of this blog won't get to see it, but I did the voice for a nationally broadcast TV commercial for Roomba vacuum cleaners. It was my first big TV commercial for the year. 

I'm pretty happy about how it came out (usually I am not).

Spring is almost here. Let's have a good year. For ourselves and for our loved ones and friends who have passed.

Remember to treat your loved ones well as:

Yesterday is gone. Today is almost over. Tomorrow isn't promised….

My Interview about Anarchy on Anarchast TV with Jeff Berwick

I was on "Anarchast" from Mexico. Subject is Anarchy with world-famous entreprenuer and talk-show host Jeff Berwick: http://bit.ly/MdB6tB

マイクがメキシコのTVに出演してます。アナーキーについて語るマイク。興味ある人もない人もとりあえず観てください〜！

"I am Not Dorian Nakamoto"

The idea that the 64-year-old Japanese guy living in California was the lone engineer that wrote the code for Bitcoin is ludicrous.

I work with some of the top engineers in Japan. The oldest ones are in their late 40s. In the world of the Internet, those are the old men. 

Anyone should ask themselves: 

"How many over 60-year-old engineers have I met?" (I've never met/heard of one.) Hell, I've never met one over 50-years-old! 

A 64-year-old guy, the savior of the world, fighting the evil banking system and he's the descendant of samurai no less? Ha! Ha! Ha! Ridiculous!

And now, the online social account for Satoshi Nakamoto had sprung back into life after a 5-year hibernation simply stating, “I am not Dorian Nakamoto.” 

From CNBC:

An online social account for the creator of bitcoin, Satoshi Nakamoto, sprung back into life Friday morning after a five-year hibernation amid growing speculation about his identity. The username Satoshi Nakamoto used an online forum for the P2P Foundation - an organization that studies peer to peer technology - to introduce the virtual currency with a single post back in 2009. The same user returned on Friday morning in an attempt to deny a 4,500-word cover story in this week's Newsweek magazine. Newsweek claimed that the creator of bitcoin was a 64-year old Japanese-American living in California called Dorian Prentice Satoshi Nakamoto. But Friday's comment on the P2P Foundation website - using the Satoshi Nakamoto username - simply stated: "I am not Dorian Nakamoto." 

Of course not. 

What is it about Bitcoin that makes people throw clear thinking and common sense out the window?

I wrote: "The inventor of Bitcoin, being one guy, and actually Japanese with samurai ancestors is too fantastic to be true.... Hell, if he is a Japanese, he has a higher chance of being a relative to the inventor of Poke-Mon than having "samurai ancestors." Read all about why here: http://modernmarketingjapan.blogspot.jp/2014/03/newsweek-has-wrong-guy-with-this.html

I Think Newsweek Has the Wrong Guy With This Satoshi Nakamoto.... Here's Why...

(This blog post was inspired by: Is Bitcoin Legal? Illegal? a Currency? a Commodity?)

I read the Newsweek article concerning "discovering" Satoshi Nakamoto the inventor of Bitcoin... I also chuckled out loud when I read Newsweek's rebuttal about this Nakamoto guy's denial. It reads:

"Newsweek stands strongly behind Ms. Goodman and her article. Ms. Goodman’s reporting was motivated by a search for the truth surrounding a major business story, absent any other agenda. The facts as reported point toward Mr. Nakamoto’s role in the founding of Bitcoin." 

As a long time Japan resident, Japanophile, and all around half-Japanese born geek and well studied in Japanese history, I can tell you that when I read the first Newsweek article, "Discovering Nakamoto," I was fascinated too... 

Until, halfway through the article, I hit one sentence...

The sentence read: "Descended from Samurai and the son of a Buddhist priest, Nakamoto was born in July 1949 in the city of Beppu, Japan, where he was brought up poor in the Buddhist tradition by his mother, Akiko." 

I immediately stopped reading it right there because it lost all credibility at that point. Why? The "descended from Samurai" sentence defies belief. 

In the 80s I worked under a guy named Hasegawa who was a Japanese historian. I will never forgot the day when he showed me an English textbook, written by a caucasian American, that said, "Japan's economic recovery was due to hard working Japanese. The Japanese received their work ethic from their samurai ancestors."

Hasegawa threw the book down, scoffed and said, "Ridiculous. This is western romanticist fantasy that Japanese have samurai ancestors. No one has samurai ancestors! Absurd!"

After that, I began to look into it and, indeed, the numbers of people in this country who came from families who were samurai you can count on ten toes; they are basically non-existent because most samurai were too poor to marry and, in a class society, you generally marry within your social strata. That would mean that, generally speaking, samurai who married would have married the daughters of other samurai... (They certainly wouldn't marry the peasant class which was 98% of the population.)

I already mentioned that most samurai couldn't afford to marry. (At the peak of the samurai warrior class (about 1598) there weren't a few hundred thousand of them in total...) 
(See: http://www.alljapan1.com/counter/index.php?cat=175)

Sure, that doesn't dispute the entire Newsweek story, but that's not my point. 

Realistically speaking, it doesn't compute... The odds of this guy, Nakamoto, being the Bitcoin brain AND having samurai ancestors would be akin to, say, Steve Jobs being directly descended from George Washington or Benjamin Franklin... Or even worse odds than that as most of the samurai disappeared 400+ years ago. Yeah, I know... It's anal-retentive (I'm that way often)...But stuff like that bothers me... That this is in this article throws into question the entire credibility of the source of this information for this story.

It sounds like the fantasy script for a samurai anime about Japan, where the good guy, a "Son-of-samurai," against all odds, fights the bad guys... What? Is this the script for next Disney produced Star-Wars movie? 

Then when people say this is Newsweek article is "investigative reporting" I roll my eyes... Yes, I do have a problem with that... This sounds more like hype, promotion or simply trying to sell magazines (by the way, that issue of Newsweek was its triumphant return to the news racks....)

You can't make this shit up!.... Well, I take that back... You actually can!

I think this is just another farce that works to discredit Bitcoin... Not that it needs help in that department with recent news.... I also think this will make Newsweek and print media even more of a laughing stock than it already is.

This samurai business makes me extremely skeptical of this entire story.

The inventor of Bitcoin, being one guy, and actually Japanese with samurai ancestors is too fantastic to be true.... Hell, if he is a Japanese, he has a higher chance of being a relative to the inventor of Poke-Mon than having "samurai ancestors."

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This article inspired by my friends Peter Tilley (Bitcoin expert) and Mish Shedlock over at Mish's Global Economic Trend Analysis http://globaleconomicanalysis.blogspot.jp/