Economic Illiteracy and How Japan is Responsible for the Destruction of the Western Economies

The things that get printed in the Western press about Japan never ceases to amaze me. The most recent article that made me smirk and roll my eyes came out on the Washington Post Blog the other day...  I guess there's a good reason that articles like this make it to a blog and not the actual newspaper; maybe someone is paying attention at the editorial desk at the Washington Post after all...

Get this: The story claims that Japanese people not having sex is going to be responsible for the destruction of the western economies.

That's right. Because the Japanese do not have enough sex (trust they do - they pay for it), and therefore they don't have enough children, this supposedly will result in the collapse of the western world economies. This article is currently doing the Internet rounds and I have been asked to comment many times. So, since my comment is the same every time, I thought I'd save myself some effort and just blog my response to this. My response is below the article quote... So, first, kindly, read a bit on this interesting economic theory.

From the Washington Post Blog: Japan’s sexual apathy is endangering the global economy:

Because Japanese people aren't having kids – which is both partially a product of, and perhaps driven by some of the same factors as, their relative disinterest in sex or sexual relationships – the population is shrinking. It's shrinking very, very fast. The Japanese population dropped by 212,000 people last year, the largest decrease on record. The birth rate is still falling, with only 1.03 million live births last year, a record low and dramatic decrease from 1.21 million the year before... 

This isn't just bad because it means the Japanese economy will have fewer workers and thus be less productive. It's setting up an economic time bomb that will go off before long... For any economy to stay healthy, there need to be enough taxpayers to support all the retirees. But Japan's population is shrinking and aging simultaneously, which means that the number of old people is skyrocketing just as the base of taxpayers shrinks.

Here is my response to this article: 

1) Japan is too crowded as it is. Japan is the size of California yet it supports a population that is 1/2 the size of the US population. 

2) Who cares about the world economy? I don't. I am worried about my own and my immediate family; I don't give a rat's ass about the USA or the EU or people living 6000 miles on the other side of the earth. 

3) Here's my vote for Idiot Statist Quote from the article: "For any economy to stay healthy, there need to be enough taxpayers to support all the retirees." Why? What kind of economic theory is this? Why should I pay taxes to support people I don't even know? (All the while the government takes a cut off the top). And why should other people pay to support me? What happened to individual responsibility? Why is the government even in the business of social security? The government should serve one function and one function only (if that): To protect the nation from foreign invasion. Where in the constitution of Japan or the USA does it say that the government should run a retirement Ponzi scheme (or run national parks, roads, airport security, farm production, dictate how large colas can be at fast food restaurants, what you can and cannot eat or drink, etc...) If big government were the answer to our problems, then the Soviet Union would have been a very successful nation. But it wasn't. 

We don't need more taxpayers; we need to shrink the government (and its out of control spending) and get it out of the health insurance business, the food safety business, the retirement fund ponzi business, the business of "Morality Police" (gambling, drugs, prostitution), giving tax monies to foreign governments in foreign aid, on and on and on.... Phase out Social welfare programs and cut government spending.... If we do so (we won't) then this population "problem" and lessening tax revenues are no longer a problem. Problem solved!

PS: History shows that the government built on fiat currency and deficit spending will out spend revenues in every case; Increasing revenues will only serve to prolong the inevitable collapse of this corrupt fiat Ponzi scheme that we have built today. The sooner the Japanese (and USA) government collapse into bankruptcy and new management takes over, the sooner we can try to make a system that can be sustained; it's obvious to anyone paying attention that this system is NOT sustainable. 

We have been mortgaging our children's and our children's children's future for decades. This shit has got to stop. "What cannot continue, won't." (Can't remember who said that!) 

This photo is not from the Washington Post Blog. These are some girls I took a photo of in Osaka at Nanba station (I think it was). If you like this photo, please use as you wish (Credit Mike in Tokyo Rogers, please!) 

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NOTES: So, you say you want these people taking care of your welfare and your life and your families well-being?! You have got to be kidding me!

And while I am railing on government over-reach, you folks know that right now there is a butter shortage in Japan? That's right. It's hard to find, and if you do find it, it's being rationed to one block per customer.

Yes, I do have butter. I always keep extra on hand. I have to; after three years in a row of not having butter because of shortages (and being a guy that likes to cook and bake) I decided not to get short handed again.

The world's third largest economy and we can't keep butter on the shelves? And this has happened now for 3 years in a row. Why is that? Because the morons running the government control milk and butter production. 

These assholes can't even handle making butter and people want them to control their lives and health and the nation's prosperity???? 

Incredible!

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For an easy to read and simple to understand explanation of how the economy works, may I recommend: Henry Hazlitt - Economics in One Lesson

The Japanese Titanic: Japan's Public Debt Will Surpass ¥1 Quadrillion Yen Any Day Now

How much is a quadrillion? That's a thousand trillion....


Recently, I've been getting my daily money market news fix from the usual suspects: Mish Shedlock, Karl Denninger and Mad Max Keiser but there's another blog that I've found that hits the mark consistently and updates more than several times a day. It's called Zerohedge. I highly recommend it because the guy that runs it seems to get the scoops on what's going on days and even weeks faster than all the rest.

The latest one rings the alarm bells for Japan once again. Japan's Public Debt is about to surpass ¥1 Quadrillion any day now. Jeez! How many zeroes are there in a quadrillion? I didn't even know without having to look it up.


Let's see that's a one with fifteen zeroes after it. Like this: 1,000,000,000,000,000.


Zero hedge reports in Japan Will Raise More Cash From Debt Issuance Than Taxes For Forth Year in a Row


Japan's marketable public debt, already the largest in the world at $11.2 trillion compared to America's $10 trillion (of course this assumes the whole SSN sleight of hand is funded, which it isn't), is due to surpass ¥1 quadrillion any month now (aka the exponential phase). And that's just the beginning. As Bloomberg reports, "Bond sales to the market will climb to a record 149.7 trillion yen ($1.9 trillion), while the national budget’s reliance on debt for funding will rise to an unprecedented 49 percent in the year starting April 1, Japan’s government said Dec. 24.


The article goes on to stomp on these Keynesian "economists" (read: clowns) who claim that the government should increase spending to pick up on falling consumer spending and loosen monetary restraints (read: print like hell) in order to pump up the economy before a recovery starts:


In other news, and to all the neo-Keynesians out there, we post the following thought experiment: according to the head priest economic growth derives from debt issuance. And since apparently every country (yes, yes, that has its own currency) can issue infinite amounts of debt, why doesn't the US and Japan (and the EU post Eurobonds), simply announce it will monetize, aka print, an infinite amount of debt tomorrow? Shouldn't that lead to global GDP promptly rising by infinity %? Or is there an actual problem with this hypothetical scenario which takes current debt trends to their ludicrous extreme.


Want to see what a quadrillion pennies look like? Here ya go!

Here we have buildings (in front) used for scale at a trillion. They're now dwarfed by the large cube of pennies in back (quadrillion). The large cube is a quadrillion, or a thousand times one trillion. This cube is roughly a half-mile wide and would weigh an astonishing three billion tons.

Translation: Japan is doomed. 2012 and beyond are going to be rough ones.


Happy New Year! If you are in Japan, may I suggest drinking as much as you can, while you can. 

Fifty-Year Old Cartoon Tried to Warn Us - Never Give Up Your Freedom

I remember seeing this cartoon when I was a kid. They tried to warn us.

It's too late? Probably is, but an understanding of this and what this kid's cartoon says, is an education in politics that 92% of all people fail to understand to this day... (my statistics).


I'm relieved that the OWS people are on the streets in the USA now, but can they continue growing? I fear that the powers that be will not relinquish control of the Status Quo so easily.

Thanks to What Really Happened

Japan's Economists Have Lost Their Minds... Fortune Tellers Haven't...

Students of Austrian economics and those who realize that the current fiat-based money system built on debt and credit is now headed for the end game.


There is not much time left for people to protect their assets and families by divesting out of fiat currency based investments and into commodities and real assets like gold, silver, oil - and, possibly land. This is a well understood trend in the west (unless, of course you are a Keynesian economist or from the Chicago school).

The fast rising price of gold and silver over these last ten years are the proverbial canary in the coalmine. Gold and silver have stupendously outstripped stocks in performance over this time. In fact, silver increased in value over 85% in 2010 alone.


But now, some clowns in Japan are predicting a return to the bubble days of the late 1980's. In fact, they write as if the bubble is a good thing.... 


Japan Times reports:


Remember the bubble? In case you don't, Shukan Gendai (Dec. 20) reminds us that the economic bubble of the late 1980s was an era of rocketing salaries, stock prices and property values, yet accompanied by little inflation. Wealth was seen everywhere. Catching a cab downtown at night required flashing a ¥10,000 bribe at the driver just to get him to stop.

Over 20 years later, the bubble era seems like a wonderful, distant dream. However, 2011 could well be different. According to the weekly, Japan is now on the verge of a new economic bubble for the 21st century.

Some of the major economic indicators already are showing strong promise as we begin the new year. As this story was going to print, the stock markets were climbing, the dollar strengthening, and the price of gold, a favorite asset in bad times, falling.

That last sentence is a real laffer. Gold is falling? Oh really? 10 years ago, gold was $300 (USD) and ounce. Last time I looked (about 5 seconds ago) it was $1,361!

Sorry, but gold, like any other asset has up days and down days... Saying that the price of gold is falling because it has gone down a few percent over this last 10 days is hardly responsible reporting... Gold, as with any other asset, trends are not judged over a few days or weeks.

This writer, obviously not schooled in Austrian economics, doesn't understand cause and effect. The article continues:

On the home front, more money will flow into the equity markets, nudging stock prices higher. That would be thanks in part to a likely 5 percent cut in the corporate tax rate, leaving Japanese companies with more money to invest, Nobuyuki Fujimoto, an executive at Traders Securities Co., Ltd., tells the magazine.

As for the overseas factors, the U.S. Federal Reserve has already been playing the central role. Through its quantitative easing, the Fed is flooding the world with dollars. All that money has to go somewhere, and one favorite spot is Japan, thanks to its relative stability.

"Since the Lehman Shock, a huge amount of quantitative easing has been under way in order to restore the U.S. economy. The global economy is in a state of 'excessive money.' That money has been circulating, including flowing into Japan," says an executive at a major brokerage that the magazine does not identify.

The inflows are already happening, with foreign investors reportedly returning to Japan in search of decent returns after a long absence.

"Data tells us that from November, overseas investors suddenly started buying Japanese stocks. The world is paying attention to Japan's stock markets," the brokerage executive says.

Yes, the Central bankers are all printing money as fast as they can. That money has to go somewhere. Japan has benefitted from the Carry Trade all these years. But with US rates at zero too, the yen carry trade is no longer so attractive. The solution? Buy undervalued Japanese stocks and land. That's what the foeigners are doing.

Japan has benefitted because of bad situations in the USA and the Eurozone... But with Japanese debt surpassing 200% of GDP... This situation will probably end, in a crisis for Japan, this year... Then you'll see everyone run for the exits. (Here is a related article showing Japan's gross debt at 226% of GDP here and here is another article with data from the Wall Street Journal talking about the coming crash of the Japanese Yen. 

Problem is that this fiat currency they are using is quickly losing it's value. What actually is happening is that the west is trying to export its inflation to Japan. 

Hardly a good situation for the Japanese people. 

But, then again, when you are so desperate for some good economic signs, even reading the stars becomes "data." The article continues:

Shukan Economist (Jan. 11), usually a buttoned-down, rational publication, begins its issue by turning to the Chinese zodiac as a guide for how Tokyo stocks will perform this year.

Its article is titled, "A good omen for Japanese stock prices through the zodiac's leaping year of the rabbit." Astrology portends a profitable year ahead, the magazine says. This is the year of the rabbit, after all, and rabbits like to jump. The magazine figures stock prices will jump as well. A data chart purports to show a strong correlation between the animals of the year since 1949 and the historical performance of the Tokyo Stock Market. 

Well, perhaps using a fortune teller to predict the market is strange, but I'll be these fortune tellers were just as right or wrong as main stream economists and writers who failed to predict the 2008 market crash and wrote about how strong our market fundamentals were back than. Chuckle!

This bizarre idea that the bubble was a good thing and its return should be hailed as good news defies logic. Then the writer adds another weird comment that is another total head-scratcher:

Maybe it's too early to bring out the vintage champagne, gold-flake sake and other iconic treats of the late '80s. But after a couple of decades of economic stagnation, even modest signs of growth are worth getting excited about.

Sorry, but two decades of money printing and Japanese stimulus should show anyone that more money printing and stimulus are not the answer to our problems. They certainly do not mean the economy is improving.

If printing money and giving it away did improve the economy, then why would anyof us have to work? Why not just print and print and print and give it all away! We'll all be rich, right? The government can print to its heart's content to pay it bills, right? Wrong.

The bubble of the 80's were good times living on borrowed money. That's why is is called a "bubble" (a "bubble" means artificial growth)  When the bubble burst, the party ended. We've been paying for that party for the last 20 years.... Trust we are still going to be paying for it this year and for the foreseeable future...

Mr. Japan Times writer, if you think living in a bubble situation is good, and that this sort of fake economy means that the real economy is good, then I have a suggestion for you: You can live just like the bubble days! You have a credit card, right? What's to stop you from spending and spending like the 1980's today?... Nothing...

Well, nothing except that you will have to pay for those charges on your credit card and those excesses tomorrow. As it is with the individual, so it goes for the state.

Welcome to economics 101 and the real world.

Why Write a Blog?

I think I should entitle this blog, "Japanese Smokin' Babe's Big Boob's Versus the Political and Economic Environment in Japan."

Gee, I'll give you one guess which title will get this blog thousands of hits... And which blog will garner this blog only a few hundred hits for the day...

Duh!

Why write a blog? It's a good question. Writing a blog can be a thankless job. But, then again, you wouldn't write a blog if you wanted thanks because you'll get little, if any... (But thank you so much for the few people who have said, "Thanks!" You are super!)

No, you write a blog because you feel that you have a purpose or a mission. If you didn't feel that way, you'd quit after 3 months.

Why would you quit after 3 months? Because it would get very depressing very quickly when you realize that, after spending 3 or 4 hours a day agonizing over what you write - if you have the willpower to force yourself to write at all - that only 20 or 30 people bother to read what you wrote.

It's even worse if you open yourself up for criticism by having a "comments" section whereby illiterates can insult you and tell you to "f*ck off!" And, even at that, you only get one or two comments per day...

Oh, what we "writers" do for "art." (I can hear you snort, "Guffaw" right now!)

I've been writing this blog for 7 months now. It is a science and economic experiment. I am integrating Twitter and Facebook (as well as other Social Media) in promoting what I write on this blog. I have been trying different things to see what garners many hits (readers) and what goes "viral."

I also write this because I have been advising some companies on how to better market using the Internet, so, I guess if I am going to talk the talk, I'd better walk the walk.

You'd be amazed at how many people I meet who claim to be "experts" on Social Marketing, but they do not blog, they do not Facebook, nor do they use Mixi... How can they claim to be experts if they don't do this for themselves?

Social Media and Social Media Marketing are such new subjects that it's not like you can just go buy a book (there aren't that many good ones) and become an expert just by reading... Tell me, could you become an expert baseball player from reading books?

But I digress.... Back to what kind of content gets many readers? Of course, content is important, but I have also found that titles really do matter.

I've been experimenting with different blog titles; different Twitter teaser titles; different ways to entice people to come read the scribbles that I have written.

Unfortunately, it occurs to me that, if I write what I think are  thought provoking articles about our world as it relates to Japan, my readership drops at a surprising rate.

But, if I write about something that doesn't affect any one's life at all, like how a Japanese woman with big boobs makes $3 million dollars a year doing porn, or a blog about how Japanese girl's are mountain climbing in miniskirts, I will receive a massive hit count that day the article is uploaded.

Of course, said article will require at least one cheesecake photo.

Gratuitous photo... Nothing to see here... Move along...

The one thing that really bothers me the most is how easy it is to sensationalize titles of blogs and promote them on Twitter. But, I guess I shouldn't be surprised, I have worked in the mass media for decades and am never surprised by how easily people's minds are influenced by the media...

If the blog is about, say, how Japan's political environment is making a mess of the world's #3 economy... Then I will get a few hundred readers for that.... But, like I said, if I write, about porn, boobs, or sex, that blog will get thousands of hits....

Just something to consider about the Internet that I have discovered.

By the way, of course, I will insert words such as, "economy," "politics," "economics" and "boobs" in the keywords for search engines.... Give you one guess which word will be searched the most on the Internet....

But, then again, putting photos up of girls is a lot easier than writing a long dissertation.