Is Japan Heading For A Massive Economic Hit? All of Japan's Nuclear Power Plants About to Go Offline!

Here is an excellent report that was sent to me by my friend Aaron Egon Moser. I've written before about how it is possible that these events could seriously damage the Japanese (then world?) economy in Japan's Double-Edged Sword: What Happens When the Nuclear Power Plants Turn Off? 

To think that Japan can go on from here, into the next fews decades, in an era of declining oil production and rising oil costs and public debt coupled with an aging population problem without a cheap energy source is foolish and completely unrealistic....

In other words, it's not economical. The Center for Global Energy Studies says:

Despite high oil prices, fossil fuels will continue to trump renewable energy sources such as solar and wind power without massive government subsidies, a new investment bank says.

A report by Calgary-based AltaCorp Capital says the “economic realities” of oil and natural gas mean that the world will remain largely dependent on non-renewable energy sources for the foreseeable future.

Japan's government already has the highest debt to GDP levels in the world, it cannot afford to subsidize new industries like solar or wind farms... People will misunderstand what I have written here and say I'm pro-nuclear power. I am not. I am pro-business. I wish we didn't need nuclear power at all. My motivations are purely economical. I wish I could say it were true that Japan didn't need nuclear power to survive but it seems to me, that if I had to put it into a black and white perspective, it's a "damned if you do, damned if you don't" sort of problem for Japan.

Or could this be an opportunity for Japan to, once again, rise from the ashes of disaster? Watch this thought-provoking interview:

Let's hope that this summer is cool and geo-political problems give Japan breathing room and oil and natural gas prices remain at a relatively low cost. One can hope, right?... Not that "hope" has ever been a very good business plan... 

Call to Remove Japanese Prime Minister Noda From Office! Japanese Government Flushes Another $7 Billion Dollars Down the Toilet!

If you or I took other people's money without their 

permission and spent it, we'd go to jail... 

Once again, the news is out about the Japanese government wonks giving away money that they don't have. This comes at a time when the government complains to the public at home that they have no money and a lack of funds thus a need to raise taxes to support the aging population and to reconstruct the earthquake and tsunami struck area of Tohoku. 

Noda probably hot for this chick wants to impress her so, like 

a typical idiot Japanese salaryman, he tips waaaaaaay too much!

The Japan Today reports in Japan pledges $7.4 billion aid for Mekong development

Japan on Saturday pledged $7.4 billion in aid over three years to help five Mekong states, in an attempt at fostering development in a resource-rich region also being courted by China.

“The stability and prosperity of East Asia will not be possible without the stability and prosperity of the Mekong region,” Prime Minister Yoshihiko Noda told a press conference following a summit in Tokyo...

...Noda met leaders of the five Mekong region countries—Cambodia, Laos, Myanmar, Thailand and Vietnam—as Japan’s export-dependent economy seeks cheap labor and investment to power growth.

Folks, this is not an example of a government gone out of control, it's just government. This is another excellent example of why the government is not the answer to our problems but the main cause of them. Just a few weeks ago Prime Minister Yoshihiko Noda said containing Japan’s public debt load, the world's largest, is critical after Standard & Poor's downgraded credit ratings on the EU nations of France, Austria and seven others.... Then a few days later he just gives away over $7 billion?! WTF? 


Maybe he was trying to impress the hot babe in the picture above! This politician must be certifiably insane... Politician? Insane? Oh, but I repeat myself.

I've written repeatedly about this problem from the viewpoint of the burden on the local taxpayers. The Japanese government through their easy money policies and bailing out zombie banks over the years has put each and every man, woman and child in Japan ¥7,632,897 in debt (as of the writing of this article). If you want to read more on that (please make sure you're sitting down when you do), refer to: Here Comes Europe's and Japan's Debt Crisis - Just in Time for Summer. It will be much higher if sales taxes are raised.

Why in the world aren't the people in an uproar over this increase in debt?

Folks, we must get rid of these people in government. They are bankrupting us and our children. They are selling off the future of this nation. Noda must be removed from office by this July.

But do not think for a second that this is a problem related just to Japan. Of course it is related to all governments around the world. 

There are two things that must be done:

1) Return to sound money policies and use of real money based on some sort of gold standard.

2) The public must remember the famous quote by Lord Acton from 1887: "Power corrupts. Absolute power corrupts absolutely."

Point number 1 is happening right now as you read this. It is the slow motion train wreck that we so often read about. The powers that be are fighting  this return to real money and sound money policies because with a fiat currency and fractional reserve banking, they can spend money (and exploit the public) with funds that they don't have. They can create money out of thin air.

Japan went off the gold standard in 1931 and we saw what happened that year! Japan invaded China and that was the actual starting date of the Great Asian War. Western history books teach us that the great war started on Dec. 7, 1941...

2) Point number 2 must be remembered because it has an important lesson for everyone. People need to pay more attention to their government and leadership. This is not only centered on national political circles either. We have to keep an eye on what these politicians do in our name and demand that they work for the public and not the other way around.

This spending at the tax-payers expense (because the government has no money except what it takes as taxes) is unacceptable. This country can ill-afford it with the debt crisis, the nuclear crisis, reconstruction problems (still tens of thousands homeless in Tohoku), the aging population crisis, the trade deficit, Japan's major industries losing market share to Asian competitors... These problems and the government wants to take on more debt!?  

I am calling for the Japanese people to remove the government of prime minister Yoshihiko Noda from office immediately. 

If you agree with getting rid of the government, click "Like":

The "Like" button doesn't work? No? Just like the government. It doesn't work!

Entire Country of Japan Goes on Auction for ¥3 Mil. Yen (about $35,000)!

ヤフオク出品中！即決６９０万、２９０万円から入札可能，ただし落札者は日本の赤字の支払い義務が生じます！


They say that imitation is the greatest form of flattery so I hope the folks at Zerohedge will forgive me for, er, umm, flattering them so! Yeah. That's it! Flattering them! Over there they have a hilarious graphic showing the entire country of Greece on auction at E-Bay.


Absurd! Well, of course that would never work in Japan as no one in this country uses E-Bay. E-Bay came to Japan and failed like many other western countries did before them by not adapting their system to fit Japan and the Japanese mindset... But that's another story for another time.


In Japan, the online auction market is totally and completely dominated by Yahoo Auctions. 


Over at E-Bay, the starting bid for Greece was $1500.00 (USD) but Japan is far and away a bigger, better and more prosperous country than Greece so the price is a bit heftier but well worth the starting bid of about $35,000 (USD).


Check out the Yahoo Japan Auction page for the Wonderful Asian Paradise Auction! Japan!:

click on image for larger view:

Three days left and no bids?! Weird, eh?

There is, though, one tiny-weeny catch though... Beware the fine print! The lucky purchaser also receives the wonderful responsibility of taking over Japan's public debt of ¥1 quadrillion yen.


I'm sure the auctioneer might be guilty of mis-stating the debt on the graphic so let me explain for you:


¥1 quadrillion is a one followed by 15 zeros: ¥1,000,000,000,000,000 


In US dollars that would be about ¥12,000,000,000,000. In mere mortal terms that's 12 trillion dollars.


Will you be paying by cash, credit card or Paypal?  


Apologies to Zerohedge

Yen Devaluation Now Imminent? Being Called by Major Financials! Get out of debt - Get your financial house in order now!

Now, after yesterday's report that the main market analyst at China's Caixin Market News and Analysis reports that he is convinced of a 40% devaluation of the Japanese yen is imminent and inevitable, here comes another report hot on the heels from the United States. 

Market Watch reports in: The Yen's Looming Day of Reckoning

Japan is on an unsustainable path of a strong yen and deflation. The unprofitability of Japan's major exporters and emerging trade deficits suggest that the end of this path is in sight. The transition from a strong to weak yen will likely be abrupt, involving a sudden and big devaluation of 30% to 40%.

It will be a big shock to Japan's neighbors and its distant competitors like Germany. The yen's devaluation in 1996 was a main factor in triggering the Asian Financial Crisis. Japan's neighbors must have a strong banking system to withstand a bigger devaluation of the yen.Japan's nominal gross domestic product contracted 8% in the four years to the third quarter of 2011, and six percentage points of that was due to deflation. Without increased government expenditure, the contraction will be one percentage point more. Japan has not seen this kind of sustained deflation since the 1930s.


Without government deficits, Japan's economy will decline much more. Central government bonds and borrowings plus its guaranteed debts rose by 116.3 trillion yen ($1.4 trillion) during the period, equivalent to one-fourth of the level of the nominal GDP in the third quarter of 2011. If Japan had adopted balanced budgets, its economy would have contracted two to three times more. This will lead to a debt crisis in its private sector.

If you are living in Japan then it is time right now to get your house in order.


1) Stop using credit cards immediately
2) Get out of debt immediately
3) Store up at least three months (six months preferably) of food and water to get over the coming financial shock 
4) Protect your wealth by obtaining physical gold and silver


These warnings about Japan's collapse have been coming louder and louder and more often over these past two months. The crash that was predicted by Karl Bass and reported here in Debt in Japan Actually 492% of GDP! UK 497% of GDP!:

...People going along, as usual, in their ignorant bliss. The "leaders" knowing full well what's going on but trying to get out with what they can, while they can! The only difference between the sinking ship and the economy is there won't be any rescue coming for us.

While the entire world watches Greece and Italy, it seems, from looking at this chart, the real action is the UK, Japan, Spain and France. 

Business, government and household debt in Japan show a 492% of GDP problem for Japan. The tax and spend days are coming to an end soon in Europe, the USA and, of course, in Japan. 

This entire house of cards is going to collapse around our heads. When the collapse does come, it will come suddenly. Hope you have cash readily available and at least a few weeks of food and water ready. Because when the crash does come, stores will be empty in a matter if a few hours - if it takes that long.

You've read it on this blog and I seriously warn people to get ready... This could break any day now considering the still simmering situation in Greece, the worsening situation in Spain, Portugal and Italy, tensions and saber-rattling by the USA and Israel against Iran... And now more problems with a world wide move away from the US dollar.


May you live in interesting times.... Indeed. 

Japan is Facing a Currency and Economic Meltdown

There's an awesome article over at Zerohedge about Japan's current economic malaise. Please refer to, Japan Is Now Another Spinning Plate in The Global Economic Circus: 

For those who are in a hurry today, the bottom line is that Japan is in serious trouble right now and is a top candidate to be the next black swan. Here are the elements of difficulty that concern me the most, each one serving to reduce Japan's economic and financial stability:

• The total shutdown of all 54 nuclear plants, leading to an energy insufficiency

• Japan's trade deficit in negative territory for the first time in decades, driven largely by energy imports

• A budget deficit that is now 56% larger than revenues (!!)

• Total debt standing at a whopping 235% of GDP

• A recession shrinking Japan's economy at an annual rate of 2.3%

• Renewed efforts underway to debase the yen

Oh, and let's not forget that Greece is about to default day after tomorrow.


If you live in Japan, I hope that you have at least two weeks worth of food and water stored up (you should have that anyway - especially if you have children - as this country has lots of earthquakes). Preferable, if you have a place to put it, two months is best.


This article is coming hot on the heels of a post I wrote about being positive. Well, my friends, trust that it is much easier to be positive when you are prepared.


What should the government do? Well, twenty years of easy credit and deflationary policies haven't worked. Why don't we try what worked after the war to create the greatest economic recovery the world has ever seen? Please refer to: In 1949, Japan Started on the Road to Prosperity by Eliminating Sales Tax.


Raising taxes and continued debt spending has gotten us to where we are today. Devaluing the currency and taking on more debt won't help us. More debt will not solve a debt problem. That's basic math.


If you owed $10,000 on all your credit cards, would it help you if you got another credit card and borrowed $10,000 to pay off your old credit cards?


Why can't the government see this?


Devaluing our currency will only punish the people and the savers. We need people to save in order to invest.

In 1949, Japan Started on the Road to Prosperity by Eliminating Sales Tax! Let's Dream a Dream for Japan Again!!

Besides eliminating sales tax, Japan also pegged the yen to gold and lowered income tax rates. I've written over and over that increasing sales tax is not the answer to Japan's problems. Tax increases without cuts won't help us. We need to cut spending and cut taxes and return the yen to a stable currency.

Akihabara in 1945 and 2001

Need proof? It worked in Japan after the war to create the greatest economic recovery the world has ever seen!


Forbes Magazine writes in an article from Feb. 3, 2012: Let's Dream a Dream for Greece:

Japan’s recovery started with a dream, among politicians and business leaders. In their imagination, Japan would rise from the ashes – actual, real-life ashes – and become again a great and prosperous nation.

This clear vision quickly led to a plan of action. The situation in 1949, of hyperinflation and crushing taxes, was plainly not in accordance with the goal of a prosperous Japan, so the leaders set about fixing the problem.

They had virtually no resources to do so. The economy consisted mostly of black-market subsistence, tax revenues were negligible, and issuing debt was impossible. Since tax revenue was far less than the government’s needs, the government subsisted mostly by printing money, with the usual consequences.

One of the first things they did was to make government debt issuance illegal. It remained so until 1965. Then they refused any more economic aid.

In 1949, they pegged the yen to gold, immediately ending the hyperinflation.

Then, they eliminated the consumption tax (national sales tax).

Japanese gold coins from the 1850s

In 1950, the income tax schedule was revised. The top rate fell to 55% from 85%. But more importantly, the income at which that rate (and others) applied was raised dramatically.  This rate originally applied to income of 500,000 yen. By 1957, the 55% tax bracket applied to income of 10 million yen, twenty times higher.

In 1951, interest and dividend income were taxed at a separate, lower rate. In 1953, capital gains were exempted from taxation completely. Interest income was taxed at only 10 percent. Businesses received a truckload of favorable treatments, in the form of accelerated depreciation, deductions, and exemptions. In 1955, interest income was made tax-free.

Throughout the 1950s and 1960s, the government had a specific goal: to keep tax revenues, and the size of the government, below 20% of GDP. They reasoned that this would be best for the brisk growth of the private sector. It worked.

The Japanese people, as we know, became wealthy in those years. Wealthy people are able to pay more in taxes than poor people. Between 1950 and 1970, tax revenues of the central government increased by sixteen times, all in non-inflationary gold-linked yen.

As the country became wealthier, and GDP grew, then the services that the government could provide on a budget of 20% of GDP grew as well. Welfare and national healthcare plans were added. Dirt roads were paved. Sewage systems were built. There was no conflict between government services and the private sector. Both became prosperous together.

This story is well known to those who follow such things.

Read more here.

Thanks to Aaron Egon Moser

Japanese Prime Minister Says He Can Get Sales Tax Doubled - I Predict He Will Be Out of a Job by September 2012

This just came out on Bloomberg. The current Japanese prime minister Yoshihiko Noda says he can get a consensus and coalition on doubling the sales tax rate.

Bloomberg reports in Noda Says Deal Possible With Opposition to Double Consumption Tax:

Japanese Prime Minister Yoshihiko Noda said he thinks he can reach a deal with the opposition to double the 5 percent consumption tax in order to shore up the country’s social security system.

“I believe we can come to an understanding,” Noda told journalists from overseas media organizations today in Tokyo. “I sense that our debate is beginning to jibe.”

This guy is a goner

The combination of an aging society and a declining birthrate has put Japan in an “unprecedented situation” as the government seeks to rein in soaring welfare costs, Noda said. All political parties understand the urgency and must work together as “the question is how to secure stable financing for a sustainable social security system.”

Ha! Ha! Ha! That just shows how delusional this Noda guy is... He has to say stuff like this to the foreign press. Back at home, to the Japanese press, he'd get laughed at. 

Sadakazu Tanigaki, head of the main opposition Liberal Democratic Party, yesterday said on NHK Television that “it would be best” for Noda to seek a new mandate before submitting his tax legislation. He denied media reports that he and Noda met on Feb. 25 to discuss the situation.

Translation: The LDP doesn't want to seem responsible for raising taxes or not being able to fund social security, so they know that if they can force an election in summer, Noda will be out of office and they can keep kicking the can down the road - in the same way as we they been doing for twenty years.

The LDP has it right too. Noda hasn't even been prime minister for a year yet his popularity ratings are already weak enough that he could never stand a chance of winning any kind of election at all. Twenty seven percent approval rating is disastrous. Especially if you stand on an election platform of raising people's taxes!

Why don't they take a page out of Ron Paul's playbook? Cut spending first before even talking about raising taxes and maybe you'll get public sympathy.

Forty percent of voters oppose Noda’s tax plan, compared with 46 percent who support it, according to an Asahi newspaper poll published Feb. 14. Noda’s approval rating fell to 27 percent from 29 percent the previous month. The paper provided no margin of error for its survey of 1,741 people on Feb. 11-12.

Former DPJ leader Ichiro Ozawa, who is on trial for violating campaign financing laws, today on TV Tokyo reiterated his opposition to Noda’s tax plan. Nine lawmakers left the ruling party after it approved the proposal to raise the consumption tax to 8 percent in April 2014 and 10 percent in October 2015.

Really, what's the point of this nonsense article? There won't be any sales tax increase under this prime minister. He will be out of office if he really tries to do so. The crisis amongst the public and the political circles hasn't come to a boiling point (because people don't understand how exponential growth of our debts and interest rates on those debts are going to affect us). And, until this really hits home, people will not tolerate a sales tax increase.

We're way past that anyway. Even with a tax increase, if it is not coupled with a massive decrease in government spending, it will not matter because our debts will continue to accumulate along with the interest on those debts. Past history has shown that tax increases will not help as the government will deficit spend any increase in revenues it gets. When Noboru Takeshita was prime minister and instituted sales tax in 1988, he claimed that it would end our debt problem. It didn't. It couldn't without a cut in spending. After years of borrowing, we are already well past double the GDP in debt. We need to begin paying down that debt before any talk of a sales tax increase will even matter. That means we must massively cut spending right now. 

This is basic mathematics, folks. 

We need to cut spending, including interest on our debt - as well as paying down that debt to under what is received in revenue - as well as having tax increases to fix the problem we are in. I am against any and all tax increases especially if they aren't coupled with massive cuts in spending - and that's not cuts in future proposed spending, that's cuts in today's current budget.

It's simple. If you get five, you cannot spend seven. Once you owe fourteen, even if you start getting six, you still cannot spend seven. You will have to lower your spending to under all income in order to start paying back past debt and interest or you will never get out of the hole. 

Where to cut? Well. I'm sure we can start with cutting government waste and ridiculous spending on prevention of victimless crimes like prostitution, gambling, drugs, and ridiculous police raids on establishments that have waitresses sitting at tables with customers or arresting owners because people are drinking and dancing at restaurants on Saturday nights!   

Anyway, Noda will be gone by September because he doesn't understand these basic concepts and can't do simple first grade math... 

The best thing that could happen is a massive across the board cut in government services, but, in a country that changes prime ministers every year and has elections every summer, that isn't going to happen as politicians won't cut services because they want to give away our money so that people vote for them.

Our current system is ruined and there is no way to fix it. We are sliding down a steep slope into insolvency. 

The good news is that we won't have a sales tax increase this year. The bad news is that none of these other Japanese politicians are able to grasp first grade mathematics either.... Nor will our next prime minister.

The Perfect Argument Against Bailouts and Big Government Spending in One Picture

They say a picture speaks a thousand words. Here's a comic that does. It shows why we should be against all nationalization of industry and bailouts of industry and banks as well as tax increase and adding debt to our already un-payable debt.

Of course the free market system (which, by the way, we haven't ever really tried - there's always government control and cronyism) has its warts... But the way we do things now (bailouts, credit rate control, printing money, government take over of industry, government controlled education, medical care and retirement) just doesn't work. The fact that we're heading for bankruptcy (Greece is showing us what's going to happen to us soon enough) shows that we must stop this big government mentality.


If an industry like banks or big companies like General Motors or TEPCO in Japan go bankrupt, let them! Why do private companies get to keep profits but when they lose money the government wants to socialize their loses and stick it to the taxpayer?


And some taxpayers actually agree with this twisted logic?


Say in the case of a company like GM. If we bail them out, the same incompetent management get to keep their jobs. If they go bankrupt, a new group comes in and buys them up. The new group gets rid of the bad parts. The factories are still there, the buildings are still there, the new company needs someone to run those factories; they get rid of bad management and bad workers and start again. That's why they buy a bankrupt company in the first place; they think they can make it profitable!


But, when the government bails them out? The incompetents keep their jobs (and donate to the next election of those government people) and confused people in the public sector think that those industries should be nationalized. Yes. Nationalized and run ostensibly for a profit. Like the profitable venture that our, say, Japanese government has us at public debt of 229% of GDP.


What's wrong with this logic and this picture?  


Anyway, the same old same old way of doing business that we've been doing for the last 40 years, since 1971, has got to stop. 


Haven't we screwed up the world for our kids and their kid's kids enough as it is?

Japan's SM Police! Why in the World are the Japanese Police Raiding SM Clubs? A Policeman is Caught Naked in One of Them! Ridiculous Laws Must Stop!

I hate to sound like a broken record, but why in the world are the police wasting time and taxpayers monies on chasing people around for victimless "crimes" like smoking herbs, prostitution, gambling, paying for sex and other "favors," and now standing around naked at a Sadomasochist club? You got to be kidding me!

Japanese Dominatrix: Beautiful and sexy Japanese girl? Yes... But not my type... 

Different strokes for different folks, I guess... Me? I've never been one for pain. 

Pain hurts. Funny that; I don't like things that hurt... 

(Probably wouldn't kick her outta bed for eating rice crackers, tho')  

It gets worse and just shows how stupid and hypocritical our masters and the police are in that, at this particular raid on said SM club, one of the 15 patrons arrested was an off-duty police officer! (I wonder how many of those other tax-feeding cops are involved in other so-called "illegal" past-times when they are not busy crashing parties and bizarre past times that other people are involved in?)


Hell, they arrest people for getting their jollies at an SM club? What the heck? Why don't they arrest people for going out and wasting a full day at a golf course too? If you ask me, that is a waste of time. As Mark Twain said, "Golf is a good walk spoiled."

I don't know, honey... You sure a nice dinner 

and a glass of wine wouldn't be more fun?

The Tokyo Reporter has the story that makes me want to pull my hair out: Sapporo cop busted for nudity during raid of SM club:

TOKYO (TR) – Sapporo police early Saturday arrested a fellow officer for public indecency during a raid of a SM club in the Susukino entertainment district, reports the Asahi Shimbun (Feb. 11).

Naotoshi Okuzawa, a 28-year-old senior patrol officer from the Atsubetsu Police Station, was taken into custody after officers entered Club Patio and found the officer on the stage naked and in the company of female employee, who had tied him with a red rope.

“There is no question that I was naked,” Okuzawa is quoted in admitting to the allegations.

When officers entered the premises at 1:15 a.m., 15 customers were present. Initially, Ozawa did not reveal his occupation, but later investigators discovered that he is a fellow officer.

“We seriously apologize for arrest of a policeman,” said Minoru Okumura, a spokesperson for the Hokkaido prefectural police. “All the facts will be investigated, and we will deal with this matter in a very strict manner.” 

"We seriously apologize for the arrest of a policeman"??? Yeah, what he really means is that "We made a mistake. If we'd have known he was a policeman, we'd have never arrested him. We only arrest mundanes and peasants (regular people like you). We promise to make sure that it doesn't happen again..."


Pardon me for being so stupid, but what is it that they are arresting these people and this cop for? Being stupid? Having weird hobbies? Being a bit twisted (who isn't a bit twisted?) Being naked inside a building? Well, funny that, I have a strange notion that it is inside of buildings and not outside of buildings that people are supposed to be naked when that dress (or lack thereof) situation occurs.

"Hands up! I'm taking you in... Dead or alive! Your call!"

Great. Just great. Japan's total debt is 492% of GDP and our national financial situation is desperate and these clowns are chasing around people with fetishisms and other silly habits. It is even stupider when you realize that the government wants to make laws that are supposed to make us "better people"!!!??? As I wrote in: Man Dies Smoking "Legal Herb"? Japan's Newest Drug Craze and More Unnecessary Drug Laws

The government has no business passing laws on what people wish to put into their bodies. If people are stupid enough to want to huff airplane fuel, drive without a seat belt, drink until they kill themselves, or eat junk food all the time, will we pass laws making that illegal too? (Look at the idiocy in England whereby teapots must be labeled, "Sugar leads to diabetics." (sic))

This comes down to private property rights. The poor guy who died, as with you or me, are the owners of our own bodies. There is no one who has the right to tell us what we can and cannot consume. Guidelines are welcomed, but these draconian laws are a waste of taxpayers money.

These idiotic laws are passed, but our lords, masters and politicians get caught doing the very same things that they don't want the mundanes, peasants and  public (that's where you and I come in) to do because of their hypocritical public stance. Remember: "Don't do as I do. Do as I say!"

Cops? Out of control everywhere!

When is the public going to finally stand up and say, "Enough is enough!" of this nonsense.

Japan's Crisis Has Arrived? Japan Has First Trade Deficit in 32 Years!

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.


Mish Shedlock reports in Japan Faces Moment of Truth:

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?

A Pig Farm in Beverly Hills and Downtown Tokyo Where Pigs Crap Diamonds - Government Laws Preventing it too!

"The more corrupt the state, the more numerous the laws." -- Tacitus


There are far too many people living in a fantasy world. There are far too many people who have been brought up under our socialist and nanny state environment for too long, or their entire lives, that they know no different. It reminds me of stories I heard about communist Poland or the Soviet Union in the 1960s: I was told that many people were happy and satisfied with a quarter cube of butter for an entire family once a month because they didn't know any better.


People in our society today think it is normal for people to expect handouts "from the government" or a "free education" or "free medical and health care" or "retirement income."


It's shouldn't come as any surprise to anyone, but, unfortunately it might; folks, few things in life are free anymore. And I don't mean that rhetorically. Not even the air we breathe is free. We get taxed even for that. But they don't call it that. They call it the Clean Air Act. 


Whatever the government can tax, it will. It's no joke to think that governments have considered how to tax even the act of sex. 


Of course, they wouldn't call it that. They'd call it something like "Protect the Babies Act" or something like that. When it comes to taxes and government boondoogles everything the government does is named the opposite of what it is actually designed to do. Rick Santelli had a funny rant the other day. He was talking about this very same subject. How about SOPA, the Anti-Piracy Bill? Who could possibly be against fighting piracy? Is there anybody out there who is for piracy? But the law was actually a law designed to curtail our rights of free speech. Or how about the Environmental Protection Agency (EPA)? Who couldn't be for protecting the environment? Or the Consumer Protection Agency? Can anybody be against protecting American consumers?


Or how about when Reagan was president and the USA launched a new series of super high speed nuclear tipped missiles that could hit the Soviet Union within 5 minutes and called them, "Peace Keeper Missiles?" 


It's always a diversionary tactic and things are named for the opposite of what they are actually designed for because people are too stupid to put down the TV remote control and read a book to find out what's really going on.


Hey! Am I talking about books again? Yep. Do people read books anymore? No. So that brings me to my next question: What's the difference between a college graduate in the west who doesn't read books and, say, some native villager up in the mountains who is totally illiterate has never even seen a book their entire life? Nothing. Neither of them read books.


Back to that part a while back talking about the government care and "free" medical and education, etc. etc. Listen, like I said, nothing is free. Another big surprise that people in this day and age might find out is that, psst, don't tell anyone but the government doesn't have any of their own money! Yep. That's right. Every single penny the government has is from taxes taken from people like you and me. The government does not own any industry and has no way to create income so they get monies from taxing the working class (that's you and me). So whenever you say that people should, say, get free healthcare, what you are actually saying is that you think you should be taxed to pay for someone else's medical care.

Well, far be it from me to tell you how to spend your money. But, I, for one, have my hands full paying for myself and my family as it is without to paying for someone else's AND have a government office middleman taking a cut off the top for running and "organizing" (I use that term quite loosely) such services. 


It's very simple: the government functions by taking taxes from the working class. In most cases (like, for example, our trash collection services) the government doesn't even run that. It is an job assigned out to a private company, usually on a no-bid contract. Each municipality does it different, but you can bet your bottom dollar that, as no-bid contracts are wont to do, there are favors being handed out.


To think that the government hires and organizes our trash collection services and those guys picking up our trash cans are government employees is another fantasy world which many people seem to believe in... It is much "cheaper" for the government to hire a outside company with outside workers to do it (insurance, employee compensation problems, etc.) and then take a margin off the top for arranging the services. 


I mean, really, sitting at a desk and organizing is what government employees do best. Of course, everyone has seen that and knows it, right? Or has anyone seen that Clark Kent super government employee office worker jetting around town recently?

Yes. In the 1930s, even American students saluted the flag this way

In our modern society people have been so brainwashed by big government and so-called big society that, as I said, they gotten used to this nonsense and think it is normal.


Well, it wasn't normal not that long ago. In the USA, it started in the 1930's with FDR and got greatly expanded and completely out of hand with Lyndon Johnson in the 1960's in America's so-called "Great Society." Nowadays, through years of government run public education, people have come to believe that the state is our benevolent leader and is here to protect us from cradle to grave. 


I won't go into too many examples of how the government protects it's own populace excepting to mention that, in the 20th century alone government's of the world instituted wars that killed over 160 million people. 


As an aside please don't counter the above paragraph with "diseases killed more people than government!" Yes. That's true. Diseases did kill more. But consider the fact that the doctor who discovered the prevention for a disease like Smallpox, Dr. Edward Jenner, did so in the very late 1700's and he did not work for a government agency. Or French chemist Louis Pasteur who found the Germ Theory of disease and prevention for infectious diseases did not work for the government. In fact, I think you'll find that government employed scientists are usually involved in exploring science for military purposes; not disease and sickness prevention or cure.


But I digress.


Today. Over 1/2 of all American households receive some kind of government assistance. Over 45.8 million Americans are on food stamps. Over 25% of all American children are under the poverty level (Japan has a total poverty level of 15.7%). Both the USA and Japanese government to GDP debt levels are unsustainable and the governments of both countries just keep spending and spending...

Your tax dollars at work

Oh, and did I forget to mention that the government has no money of their own and that the money that they are spending is your money? That money  comes from your pocket? I did mention that? Okay. Thanks. Just wanted to make sure you understood that.


A while back, I had a discussion with a guy who was the typical brainwashed American. He thought that we needed more laws, more taxes and he thought that the government was benevolent and good.  


I told him to consider the notion that "Laws are the anti-thesis to freedom." He scrunched up his face and looked confused.


We were at his house in Den en Chofu overlooking the garden area. Den en Chofu is the ritzy part of Tokyo. Imagine Beverly Hills in Japan and you get the idea. As we looked out from the balcony, he insisted that we needed the government and more laws on the books. This really surprised me as I didn't expect that people who were living upper middle class would want more government control over their lives but I would find out that, to my surprise, he wasn't an independent businessman, he was a government employee and in a sort of public union!


He insisted that we needed the government to make laws like no smoking in restaurants and seat belt laws. I said we didn't. 


In the case of smoking laws, people need to understand the difference between a public building and a private building. A government owned building is a public building, the government can make laws about smoking and rights concerning what goes on inside that building. A privately owned building, like your house, is none of their business. If you want to smoke in your house, or allow others to do so - or not do so - that's your business. If people don't like it that you do or do not allow smoking in your building they can go somewhere else.


Nowhere in the US constitution does it say that the federal government has the power to enact laws pertaining to smoking in privately owned buildings or even that you have to buckle your seat belt (It doesn't say that in the Japanese Constitution either). In America, the individual states might. But the federal government does not. And those go for drug laws and smoking laws and laws concerning prohibition too!


Say your mom and dad work hard all their life and save enough money to quit their jobs and they use their saving to buy a building and open a restaurant. It is their building. They own it. The government has no right to tell them who they can and cannot serve to. If your dad wants to allow his customers to smoke in his restaurant, that is your father's right. The government should make no laws pertaining to that.   


But my friend would have no part of it. He insisted that we needed laws like smoking laws or helmet laws. Like I said, people are indoctrinated by public schooling and taught to not be able to think.


Folks we don't need laws like ones that prohibit smoking in privately owned buildings, or must wear a helmet or ones that say you can't build a pig farm in the middle of Beverly Hills. You know why? Well, I explained about public versus private buildings. Helmets? I think only stupid (or really cool and a tad bit crazy) people would ride a motorcycle without one. (I think I also mentioned something about trying to outlaw stupid.") And pig farms? Well, making a business like a pig farm is a huge investment. I don't think people do it to lose money. Pig farmers are not so stupid. People don't usually start businesses - any businesses - to lose money. 


The government cannot outlaw stupid (though sometimes I wish they'd try!)


Pig farms aren't such high income generating businesses, I suspect. The cost of land in Beverly Hills (or in Den en Chofu, Tokyo) run astronomical amounts. Last I heard Den en Chofu was $120 a square foot! Now, most pig farms are out in the country where land runs about a dollar a foot or so for a reason. It doesn't take much of a mathematician or rocket scientist to figure out that a pig farmer could never afford to make a pig farm in Beverly Hills profitable at those land prices unless those pigs were crapping diamonds.


In which case, the government would find a way to make even that unprofitable with a new tax by calling it something like the "Protect Romance and Precious Diamonds Act of 2012."


So, does anyone think we need laws to stop someone from attempting to make a pig farm in rich neighborhoods? I don't think so.


Things are quickly spinning out of control The biggest problem is most people are walking around like nothing is happening and are hoping for the best. Folks, "Hope" is not a very good business plan nor is it a good plan on how you are going to take care of your family. 


We need to cut down on government and government spending in order to get out of the mess we're in. In Japan's and the US government's case, increasing our debt is not the answer to our debt problems. If the average Joe Blow doesn't start to figure this out really soon, we are in for a world of hurt.


If that happens, then I might like to be a pig farmer and get away from the rat race. I read about pig farming in Charlotte's Web. Now, that fantasy world sounded wonderful.