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Japan Is Again Forced To Stimulate Its Troubled Economy
Japan Is Again Forced To Stimulate Its Troubled Economy
Japan faces a wall of debt that can only be addressed by printing more money and debasing its currency. This means they will be paying off their debt with worthless yen where possible and in many cases defaulting on the promises they have made. Japan currently has a debt/GDP ratio of about 250% which is the highest in the industrialized world. With the government financing almost 40 percent of its annual budget through debt it becomes easy to draw comparisons between Greece and Japan. While adding to the markets move higher across the globe the latest move by Prime Minister Shinzo Abe should do little to boost confidence in the small island nation.
Entering the third quarter of 2019 Reuters reported their monthly Tankan survey showed that Japanese manufacturers had again turned pessimistic about business prospects. Confidence in the service sector also plunged. Amid the escalating Sino-U.S. trade war, and problems in China the prospects for a global downturn remain large. Survey results showed the weakest sentiment reading since April 2013. Concerns about weakening global demand intensified after a closely watched bond market indicator pointed to the growing risk of a U.S. recession, and data revealed Germany’s economy was in contraction.
Japan. the world’s third-largest economy is highly dependent on exports. The U.S.- China trade war in conjunction with Japan’s export curbs to South Korea and the rising yen has put a lid on sales. This has stoked the fears of recession and raised questions over how much longer domestic demand can remain resilient enough to offset rising external pressures. Private consumption constitutes about 60% of the Japanese economy. Adding to the stress is the fact Japan’s economy is now under pressure from a hike in the consumption tax to 10 percent from 8 percent. This increase took place on Oct 1st. The Bank of Japan has estimated this will generate a net burden of 2.2 trillion yen on households in fiscal 2020.
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What Happens After The Economic Momentum Ends?
What Happens After The Economic Momentum Ends?
At Some Point We Have Simply Overbuilt!
The economic landscape before us continues to look like something out of “Alice And The Looking Glass”. A bizarre and unrecognizable land, a land that is distorted and papered over by ream after ream of paper. For over a decade this paper has been rolling off the printing presses of central banks all across the world in an attempt to mask reality. Peter Schiff says, printing money is to the economy what taking drugs is to a drug addict. In the short term, it makes the economy feel good, but in the long run, it is much worse off. Unfortunately, what was once the “long-run” or “distant future” is now getting much closer.
Many people are now set to blame any slowdown in global growth on what has been declared avery dangerous and protracted trade war. Going into it many economists warned it could be truly disastrous for the entire global economy. In my opinion, the fear of slowing trade and how it will affect America is being overplayed and is not the chief catalyst for a slowdown here in America. While it is easy to target trade as the culprit and Trump as the instigator this conclusion is not supported by facts. We should remember the economy moves in cycles and this one is long in the tooth by historical standards.
Since the Bernanke experiment began, time and time again, the green shoots of economic growth have withered and required more stimulus in order to move to the next level. Each prediction of achieving escape velocity has proven to be short-lived or overly optimistic. These bursts of good news have continually been followed by disappointing economic data forcing some kind of stimulus to get the economy over the next hurdle.
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Technology Spurs On Our Ability To Deceive
Technology Spurs On Our Ability To Deceive
Caught between the forces of mainstream media and government propaganda it seems we can believe nothing we see or hear. Much of this problem is rooted in the agendas of large companies and those who control them. These companies have become so big and powerful that they now influence government’s message and direction. Fake news and false flags have left many of us having a difficult time deciding what is real, adding to this is the rapidly growing ability of computers to generate and alter human images. This is all about to go to a whole new level.
Margrethe Vestager, the European Union Antitrust Chief, is busy touting that the EU’s influence gives it the opportunity and power to shape the world. She insists the EU is ready to take on companies like Google, Facebook, and Amazon which she contends has used their power to undermine competition, keep out innovation and collect data on us. This has given these companies great power to manipulate society. Google did this when it used the power of its search engine to favor its own comparison shopping service. While the EU has signaled it is going to make several big companies use their power in a way that’s fair and doesn’t discriminate the fact is this is easier to say than do.
The EU plans to do this by flexing its muscle with a combination of competition policy and regulation changes, however, whether it will be successful remains to be seen. Like many people, I remain dubious. These powerful companies already are overly involved with shaping the message of media and government propaganda are about to unleash upon society a great deal more computer-generated models and images. These have advanced to where they blur reality and diminish the need for humans to act as spokespeople or to represent organizations.
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Crashing The Financial System For Fun And Profit
Crashing The Financial System For Fun And Profit
Huge Fortunes Can Be Made In Falling Markets
It would be wise to remember we are in uncharted waters and this market could reverse on a dime. The stories flowing out of companies such as WeWork that are burning through cash screams danger ahead! This means we should not discount the idea that those in charge might reach a tipping point where they crash the financial system for fun and profit. While this may seem outlandish the possibility is real. This doesn’t mean that every rich guy and gal would sign on to this plan, just enough to push things over the edge. When things have gone too far in one direction history shows that a correction always takes place. It could be argued we have reached that point and true price discovery has been lost.
A huge amount of money can be made during a market crash for those properly positioned. As long as the Fed and the big banks survive those who control these institutions couldn’t care less about how the 99.5% at the bottom fair. In fact, the Dodd-Frank Act which is over 2,300 pages allows this under Title II what is viewed by many as a “bank bail-in”. This is done by imposing the losses of insolvent financial companies on their common and preferred stockholders, debt holders, and other unsecured creditors including depositors.
The whole event of a “bank bail-in” can be viewed as another way to disguise a massive default and it can happen here in America. An example of just how delusional we have become as to the fragility of our financial system is that many people have taken comfort in the efforts to control the banking sector through the Dodd-Frank act following the 2008 crisis.
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Farmageddon Is Real And Farmers Are Suffering
Farmageddon Is Real And Farmers Are Suffering
Farmageddon is real and very painful for a small segment of America. According to the Book of Revelation in the New Testament of the Bible, Armageddon is the prophesied location of a gathering of armies for a battle during the end times. Today many farmers living in America’s farm belt are facing tough times with no end in sight. The trade war with China has taken a toll by bringing grain exports to a near halt. This has caused grain prices to tumble adding to the list of blows hitting farmers. While the number of people employed on farms has declined over the decades farming remains a big business and has a huge impact on many communities. In these areas, themoney flowing into local businesses as farmers sell their crops is evident in everything from truck sales to the little things common in everyday life such as dining out or getting a haircut.
While little noticed by the average person living on the coast or in one of our many large cities this is a big deal. As mentioned earlier in this article farm income is not contained in a closed-loop but spills into other parts of the economy. Many areas in the heartland of America have not experienced the benefits showered upon Wall Street, because of this we should not be surprised if the gloom covering many areas of the country does not lift anytime soon. The chart to the right shows a “forecast of income” but fails to take the impact of the trade war into full consideration.
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