"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." ----------
The financial situation just keeps getting worse in Japan... I send my son to a very exclusive international private school in Tokyo. It is very expensive too. So expensive is it that just about every family who sends their kids there has their company foot the bill for tax reasons. Me too. I could never afford it; the company pays. If the company didn't pay, he'd go to public school and get a crap education.
At that school there are so many children of foreign ambassadors and the bosses of big Asian and Western companies that the list is like a who's who of Fortune 500 company children. Then there is our family. I drive a used Toyota four-door and most of the other parents drive new Mercedes Benz or BMW's with the occasional Saab running around. Many children have chauffers drive them to school. Not my kid. He's stuck with his hung-over and disheveled and unshaven dad behind the wheel every morning. Our family is like a desert island in an ocean of opulence at that school. Or, at least I thought so until the other day. I was at the grocery store where I met one of the moms from the school. I see her sometimes; she doesn't work. Her husband is an executive at some big company. She drives around in a very nice Benz. They are rich... Or, like I said, so I thought.... We were on the escalator at the grocery store and she asked me how work was going. I answered that work was tough for us, just like it is for everyone else now. We all have to work 3 times as much for 1/2 the money. She sighed and said, "Us too. I don't know if we can afford to pay for school anymore!" That blew me away. Here I thought these folks were loaded with money. Heck, they are, or were. I have a hard time with one kid at that school. She has two! I said to her, "Yeah. You know, 20 years ago, I sent two girls through international school at the same time and I don't really remember it being too much trouble, money-wise. Now? Now it's all I can do to work and send one!" She didn't say anything but I could tell from the expression on her face that she was genuinely worried. I thought about it and got angry. I am angry at the stupid Japanese government for taking our tax money and bailing out these zombie banks and keeping the status quo intact at the expense of the people and our children's future. I am furious that the situation has gone on for so long. I am angry that it is not only us who is feeling the pain but everyone else I know... I get angry when I read the news and see that 15.7% of all Japanese are under the poverty level. I get pissed off when I see that our debt to GDP is over 237%.... And I really get angry when I read that these idiots in government want to raise our taxes and keep with the failed policies of these last twenty plus years. And it really really astounds me that the people who got us into this mess can get reelected again. What a farce. Mish Shedlock writes about the disaster about to befall us:
Japan's grand experiment of decades-long QE coupled with Keynesian foolishness is about to take one last gigantic leap forward before it plunges straight off the cliff into a massive currency crisis.
For years, proponents of aggressive monetary policy have offered this unusual piece of advice as a way to end Japan’s deflationary slump and invigorate the economy. Print lots of money, they said. Keep interest rates at zero. Convince the market that Japan will allow inflation for a while.
Japan’s central bankers long scoffed at such recklessness, which they feared would ignite runaway inflation. But now, the bank’s hand could be forced by an unlikely alliance of economists and lawmakers who have argued for Japan to take more monetary action after more than a decade of weak growth and depressed prices.
Championing their cause is the former prime minister Shinzo Abe, who is favored to return to the top job after nationwide elections next month. Otherwise deeply conservative, Mr. Abe surprised even his own supporters by calling for the Bank of Japan to be much bolder in tackling deflation, the damaging fall in prices, profits and wages that has choked Japan’s economy for 15 years.
In escalating remarks over the last week, Mr. Abe has said that he will press the Bank of Japan to act on government orders if his Liberal Democratic Party wins the Dec. 16 election and even rewrite Japanese law to reduce the bank’s independence.
In a speech in Tokyo on Thursday, Mr. Abe said he would call for the Bank of Japan to set an inflation target of 2 to 3 percent, far above its current goal of about 1 percent, with an explicit commitment to “unlimited monetary easing” — an open-endedness that has caused jitters among some economists. The bank’s benchmark interest rate should be brought back to zero percent from 0.1 percent, Mr. Abe added.
He went even further over the weekend, saying in the southern city of Kumamoto that he would consider having the bank buy construction bonds directly from the government to finance public works and force money into the economy, according to local news reports. That raises concerns, however, the bank may be called on to bankroll unrestrained spending on more roads and bridges that Japan does not need.
Economists cite several missteps by the central bank that have entrenched Japan’s deflationary mind-set and made consumers and businesses wary that the bank’s policies will stick. In early 1999, as the country’s economic woes deepened, the bank lowered a benchmark interest rate to virtually zero and said it would keep rates at zero until deflationary concerns disappeared. But an economic uptick in mid-2000 caused the bank to raise that rate to 0.25 percent despite protests from the government that the move was premature.
Monetarist Mush
Anyone who thinks an interest rate hike from 0% to .1% or even .25% has much influence on economic growth has "monetarist mush" for brains. Seriously.
The NYT does not name the economists, but I have no doubt they exist. Highly respected (for no reason) Richard Koo is one of them.
I have written about Koo on numerous occasions. From Japan's decade long experiment resulting in public debt of a 1,000,000,000,000,000 yen (a quadrillion yen), Koo reckons Japan failed to defeat deflation because it did not do enough!
Japan is in a crisis alright, and it was entirely self-made, by politicians listening to clueless economists all begging Japan to do something.
One Thing Worse
Central banks are bad enough on their own, but history shows that one thing worse than central banks acting on their own is central banks acting under control of politicians.
Committing to a little inflation will push stock prices higher, while a weaker yen will bolster Japan’s exporters and strengthen corporate balance sheets. Incomes will rise, fueling consumption and raising tax revenue for the government, said Kozo Yamamoto, a lawmaker of Mr. Abe’s Liberal Democratic Party.
“Basically, it’s what the Bank of Japan should have been doing for the past 15 years,” he said. “A few percent of inflation is nothing to be worried about.”
The economy is in the trash can and inflation is nothing to be worried about? Haven't these clowns in the government done enough???? We're doomed! Folks, get canned foods and buy gold and silver while you can. For more please refer to:
The worst part of blogging is getting mail from idiots who think they know what they are talking about. Dave from Texas tells me that, "you are part of the problem" when it comes to Japan's economic conundrum. You see, Dave thinks that government spending of over 237% of GDP is not the problem. Dave also thinks that the current rate of Japanese under the poverty level of 15.7% is somehow caused by privately run businesses trying to compete for good employees under the free market system. In "Japan is Collapsing," I wrote: I am angry at the stupid Japanese government for taking our tax money and bailing out these zombie banks and keeping the status quo intact at the expense of the people and our children's future. I am furious that the situation has gone on for so long. I am angry that it is not only us who is feeling the pain but everyone else I know... I get angry when I read the news and see that 15.7% of all Japanese are under the poverty level. I get pissed off when I see that our debt to GDP is over 237%....
And I really get angry when I read that these idiots in government want to raise our taxes and keep with the failed policies of these last twenty plus years. And it really really astounds me that the people who got us into this mess can get reelected again. What a farce. Dave then writes:
Well, things can't be so bad-- I mean you still have a very exclusive international school full of rich people, right? Did you ever think that one of the problems with Japan's economy is that everyone assumes a paternalistic company to pay for all these benefits for their employees? When businesses are burdened with such costs, the money's got to come from _somewhere_. Companies will either: stiff the employee wages, borrow, suck off the gov't teat, or go under. Mike, with all due respect, you might be part of the problem...
Riiiiiight! Japan's economic problems are due to the efforts of private businesses! Dave is a fricking genius! I responded: Dave is a prime example of the poor education people get through public schooling. For some bizarre reason he thinks that private businesses (that create jobs and build the economy) are "part of the problem" whilst he ignores the fact that Japanese government debt is now over 238% of GDP and we have 15.7% of all Japanese under the poverty level in Japan today. He also fails to recognize that Japan has the highest corporate tax rate in the world. Dave is completely ill-informed and naive. Jeff B. also blasted Dave in the comments section for thinking the government had their own money and because Dave fails to realize that all the money the government has in the first place is money they took it from privately run businesses. Dave is a total statist fool. But Dave isn't the worst one - he doesn't deserve the "Total Idiot Award" in the last 24 hours (Sorry Dave). That award goes to someone else even dumber. To prove to you that public education is in the pits and that you must work your ass off to send your kid to a private school or homeschool, read this next letter that I received concerning my article entitled, "Atomic Bombs: Race Hatred and Mass Murder." The reader commented: "I think you have a very warped sense of history. Japan was, after all, the first country to use a nuclear weapon on Korea. Second, the actual documents show Japan was looking for a CONDITIONAL ceasation to the war. (sic) Japan's own treatment of the Chinese was the real war crime. So don't be so high and mighty. True, the bombs killed many innocents, but it was total war by all sides. Your generals were to blame, not the U.S."
Jesus! "Total war by all sides" but "Your generals were to blame" incredible! It gets worse, he even spelled "cessation" wrong. Then he writes, "Japan was, after all, the first country to use a nuclear weapon on Korea???" What the heck? Have you ever heard anything like that before? He's kidding, right? Is this what they are teaching in school or did this guy get this from reading comic books? No! I dare say that this guy doesn't read at all.... I mean, how could he with a ridiculous statement like that?
If you ever needed any evidence that US public education was sh*t, you just found it with the comments by Anonymous. Mr. Anonymous! Please send me the names of the schools you attended. I want to publish that list so that people know where NOT to send their kids!
And if you ever needed evidence that blogging was an exercise in frustration (or becoming a Zen Master) then just read the dumb stuff people like Dave write.
God help us all if this is the education level of the people we are producing today.
I suppose the best recourse on this holiday weekend is to not argue with idiots and drink more.
Happy Thanksgiving! May the rest of this year see you and yours healthy and prosperous!
My son and daughter along with two friends (Ko & Takashi) visiting us for turkey in 2010
Yesterday, I posted about how messed up the Japanese economy was in "Japan is Collapsing." The response to that article was amazing. Thank you... Too bad the article contents are true. Interestingly, just two nights ago I had dinner with some high ranking executives from Germany's biggest television network. They were in Japan on a fact-finding mission and had visited several Japanese corporations who told them all sorts of nonsense stories (spin) about Japan. The most ridiculous one was given to them by a spokesman from either Nissan or Docomo (they couldn't recall which company told them - Jet lag and all). The spokesman told them something along the lines of, "The Japanese work so hard because of their samurai ancestors." I was asked by several of the visiting German delegation if this statement was true. I told them it was "...total and complete bullsh*t!" Actually, I've heard this "samurai ancestors" romanticist nonsense before. It's not true at all. Folks, there might be only a handful of people in Japan who have "samurai ancestors." 95% of all Japanese have peasant-class ancestors and the other 5% or so have merchant class ancestory. The samurai were low-class paid killers and "worked" (if you call it that) for money killing people or being body guards. Their only dedication, generally speaking, was to whoever paid them the most. That certainly doesn't translate into long and hard hours sitting at a desk all through the 50s, 60s, 70s and 80s that most Japanese dedicated during the so-called Japanese economic miracle. And a big reason that Japan is messed up today is that she doesn't have the people with the leadership qualities like she used to and her people don't work hard and dedicate the long hours like they used to. For more on that subject please refer to: Why Korea Beats Japan:
"...the biggest problem for Japanese companies versus Korean companies in manufacturing may not be simply issues with design and ease of use, but it has a lot to do with corporate culture in Japan.
Frankly speaking, from what I've seen, Korean companies will continue to beat Japanese companies for the long foreseeable future. There's no way out. Why? Because inside a Korean company, there are no factions fighting for position like what goes on at a Japanese company. Also, Japan doesn't have the leadership it once had; there are no more good leaders, definitely in politics and there is a terrible shortage in business in Japan too.
My Samsung friend put it this way,
"At a Korean company everyone is on the same bus and we are all going the same way. At a Japanese company, the leaders have a very difficult time getting everyone pointed in the same direction."
He's absolutely right.
At a Japanese company groups are struggling within, and against each other, to gain power. At Korean companies, I think they feel it is "Korea versus the world!"
When I worked as an executive at a major Japanese TV station subsidiary, I saw a consistent in-fighting between three or four factions for power. When faction "A" would come to power, the other factions seemed to not put in their best effort. In fact, I saw times when the other factions would actually drag their feet and become a hindrance to the efforts of the group in power.
It was infuriating to me as a foreigner who wasn't inside of any group to see people protecting their friends and their position as the number one work priority rather than the success of the company business or the project.
It seems to me that the success of the project would automatically protect one's position. But no! These folks wanted success for sure, but only if their group was the one in power when that success occurred.
I saw this same problem at a Sony subsidiary, another TV network I worked at in the mid 80s ~ early 90s; and you can readily see this same problem in Japanese politics anytime anywhere.
I was, and am still to this day, astounded at the immaturity of some of these people."
I wrote that article at the end of September. It's been only two months but I only see things getting worse. Also the other night, the COO of the German television network told me that he still thought Sony was a great corporation. I told him,
"You do know that Sony lost a billion dollars last year?"
He said nothing and drank his wine. Sorry to burst his balloon.
The agency slapped a speculative rating on each firm, pointing to their weak balance sheets and declining position in the global electronics sector.
Fitch said it cut Panasonic by two notches to BB, while it slashed Sony's rating by three notches to BB-, with both firms given a negative outlook.
"The downgrade reflects Panasonic's weakened competitiveness in its core businesses, particularly in TVs and panels, as well as weak cash generation from operations," Fitch said in a statement.
"It also reflects the agency's view that the company's financial profile is not likely to show a material improvement in the short to medium term."
Fitch also cast doubt on Sony's prospects, saying a "meaningful recovery will be slow, given the company's loss of technology leadership in key products, high competition, weak economic conditions in developed markets and the strong yen".
Panasonic was also downgraded to one level above junk by Moody's earlier this week.
I just wonder what took them so long to downgrade these companies... All they had to do was to go and check out and talk and work with the people I do and they'd have known 5 years ago that Sony was headed for the trash-can. Heck, when Sony unveiled their MP3 player that was to compete with the iPod years ago and called it the "Walkman" you knew they were out of good leadership and good ideas. Look for Sony to be emblematic of the rise and fall of Japan's economic miracle. ------- This morning, I also received a mail from my good friend Mish Shedlock and he wrote that I could reprint his entire blog post about Japan (that I referred to yesterday) in full and I wish to do so here. Mish has the most wonderful insights and I find his blog to be a "Must Read" everyday. I think you should too!
Japan's grand experiment of decades-long QE coupled with Keynesian foolishness is about to take one last gigantic leap forward before it plunges straight off the cliff into a massive currency crisis.
For years, proponents of aggressive monetary policy have offered this unusual piece of advice as a way to end Japan’s deflationary slump and invigorate the economy. Print lots of money, they said. Keep interest rates at zero. Convince the market that Japan will allow inflation for a while.
Japan’s central bankers long scoffed at such recklessness, which they feared would ignite runaway inflation. But now, the bank’s hand could be forced by an unlikely alliance of economists and lawmakers who have argued for Japan to take more monetary action after more than a decade of weak growth and depressed prices.
Championing their cause is the former prime minister Shinzo Abe, who is favored to return to the top job after nationwide elections next month. Otherwise deeply conservative, Mr. Abe surprised even his own supporters by calling for the Bank of Japan to be much bolder in tackling deflation, the damaging fall in prices, profits and wages that has choked Japan’s economy for 15 years.
In escalating remarks over the last week, Mr. Abe has said that he will press the Bank of Japan to act on government orders if his Liberal Democratic Party wins the Dec. 16 election and even rewrite Japanese law to reduce the bank’s independence.
In a speech in Tokyo on Thursday, Mr. Abe said he would call for the Bank of Japan to set an inflation target of 2 to 3 percent, far above its current goal of about 1 percent, with an explicit commitment to “unlimited monetary easing” — an open-endedness that has caused jitters among some economists. The bank’s benchmark interest rate should be brought back to zero percent from 0.1 percent, Mr. Abe added.
He went even further over the weekend, saying in the southern city of Kumamoto that he would consider having the bank buy construction bonds directly from the government to finance public works and force money into the economy, according to local news reports. That raises concerns, however, the bank may be called on to bankroll unrestrained spending on more roads and bridges that Japan does not need.
Economists cite several missteps by the central bank that have entrenched Japan’s deflationary mind-set and made consumers and businesses wary that the bank’s policies will stick. In early 1999, as the country’s economic woes deepened, the bank lowered a benchmark interest rate to virtually zero and said it would keep rates at zero until deflationary concerns disappeared. But an economic uptick in mid-2000 caused the bank to raise that rate to 0.25 percent despite protests from the government that the move was premature.
Monetarist Mush
Anyone who thinks an interest rate hike from 0% to .1% or even .25% has much influence on economic growth has "monetarist mush" for brains. Seriously.
The NYT does not name the economists, but I have no doubt they exist. Highly respected (for no reason) Richard Koo is one of them.
I have written about Koo on numerous occasions. From Japan's decade long experiment resulting in public debt of a 1,000,000,000,000,000 yen (a quadrillion yen), Koo reckons Japan failed to defeat deflation because it did not do enough!
Japan is in a crisis alright, and it was entirely self-made, by politicians listening to clueless economists all begging Japan to do something.
One Thing Worse
Central banks are bad enough on their own, but history shows that one thing worse than central banks acting on their own is central banks acting under control of politicians.
Committing to a little inflation will push stock prices higher, while a weaker yen will bolster Japan’s exporters and strengthen corporate balance sheets. Incomes will rise, fueling consumption and raising tax revenue for the government, said Kozo Yamamoto, a lawmaker of Mr. Abe’s Liberal Democratic Party. “Basically, it’s what the Bank of Japan should have been doing for the past 15 years,” he said. “A few percent of inflation is nothing to be worried about.”
US Populist Position
It's not just Japan loaded up with populist fools. The US has its share of them as well.
For example, Ellen Brown wants to end the Fed and put California politicians (state politicians in general) in charge of printing money to support "growth" as well as union causes.
As I have said, the one thing worse than having a Fed in charge of monetary policy is having politicians in charge of monetary printing!
Inflation will not raise consumption. People do not stop buying things just because prices are falling. Computers are proof enough. Prices of computers and electronic goods have been falling for decades, yet every year the volume of merchandise sold reaches skyward.
History suggests people buy things when they need to or want to not just because prices are rising. Government interference and tax breaks can shift demand forward by a few months (for no real economic benefit of course). There is only so much room to store things.
How much food or clothing can you store? Will you buy a coat you do not need, just because prices are going up? US QE Example
Take a look at the US.
QE has put a floor (for now) on asset prices but it has not done a damn thing for wages.
I come in at about the 3:00 mark, but the first few minutes of Lauren are entertaining as usual.
Average Hourly Earnings vs. CPI
Average hourly earnings has been falling for years and lagging CPI inflation since September 2009. Simply put real wages have been declining. Add in increases in state taxes and the average Joe has been hammered pretty badly.
If inflation and QE forces wages and hiring up, then why didn't it?
The fear for Japan should be rising interest rates not deflation. If interest rates rise a mere 2%, interest on the national debt will consume 100% of government revenues.
When that happens a currency crisis awaits. I have long stated a currency crisis would happen far sooner in Japan than the US, and I believe we are about to find that out soon enough.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com Read more at Mish's Global Economic Trend Analysis: http://globaleconomicanalysis.blogspot.jp/2012/11/doorsteps-of-currency-crisis-economic.html
The floodgates are creaking. If Japan needs foreign loans to float the government debt, the country is sunk. The other option is to destroy the value of the yen.
Will the Japanese public stand hyperinflation? If interest rates go to just 3% they would consume ALL of Japan's tax revenue. Even doubling the Sales Tax won't help.
Japan is in deep serious trouble the moment it enters a sustainable period of negative or neutral current account balances. If Japan becomes dependent on foreigners to finance rollovers on its debt either the Yen sinks or interest rates rise. Interest rates at a mere 3% would currently consume all of Japan's tax revenue.
Bloomberg reported; “Japan’s government said it will probably miss its goal of balancing the budget by 2020 even with its proposed doubling of the sales tax, underscoring the scale of the nation’s fiscal challenges.
The primary budget deficit, which excludes the cost of servicing debt, will be the equivalent of 3.1 percent of gross domestic product for the year through March 2021, the Cabinet Office said in Tokyo today. Hours after the release, Prime Minister Yoshihiko Noda reiterated his call for opposition lawmakers to engage in talks on boosting the sales levy.
‘To balance the budget, the rate needs to rise further.’”
What did I tell you the last time I wrote against an increase in Sales Tax? No matter how much the taxes go up, the government will always spend what it takes and, no matter how much it is raised, it will never be enough. History shows us that! When the first Sales Tax came in at 3% in the early 1980s they said that was going to fix the budget problems. Guess what? Surprise! It didn't.
Why didn't it? Because they spent the money!
The article above really goes into how stupid and into the outer limits of insanity the current government of Japan is by stating that there are some who think Japan should have a 25% Sales Tax.
Like I predicted, this prime minister, Noda something or other (no need to remember his name, he is a goner) will be gone this summer. Bank on it.
Instead of raising taxes, how about cutting spending?
