March 19, 2012

Japanese Lessons

Posted in Sunday Business Post · 90 comments ·

The US stock market hit another post-crash high on Friday and it got me thinking not of America but of Japan – one of America’s giant creditors. As the US stock market has been rallying, the Japanese yen has been collapsing. Why might this be?

This time last year, Japan was struck by a tsunami, which shook the country to its very core. Japan flirted with a nuclear disaster as the Fukushima reactor melted down. It is now known that the Japanese interior ministry toyed with the possibility of having to evacuate Tokyo – such was the scale of the threat to civilised life in Japan.

In the end, maybe the lasting lesson of the biggest nuclear near-miss the world has ever seen might be an appreciation of the inherent safeness of Japan’s nuclear reactors. After all, if a nuclear reactor can be hit by an earthquake and a tidal wave and still be controlled by the engineers, it suggests that these installations are pretty robust.

As Japan came to terms with the tsunami, many people also looked anew at the Japanese economy, particularly because the path taken by the rest of the world since the crash has mirrored the road map given by Japan, as it tried to recover from its massive property and credit crash in the early 1990s.

Japan was the first to do quantitative easing; it was the first to expand its central bank’s balance sheet massively and print money. It was the first to engage in real Keynesian counter-cyclical fiscal policy. It was the first to ramp up government spending in the face of a recession. Now its government debt to GDP ratio stands at 225 per cent – by far the highest in the world. In short, Japan is the leading indicator as to how countries tackle debt-induced recession.

It is also the economy which maintained enormous exports throughout its domestic slump and this keeps the economy and its brilliant companies ahead of the rest of the world in all sorts of manufacturing fields. And crucially, in terms of financing, the Japanese have kept long-term interest rates at extremely low levels for nearly a decade and a half, despite the stock of debt skyrocketing.

When you look at the policy of the US and Britain and the EU, some, if not all, parts of the Japanese mix are being used. The EU baulks at the government spending side to the Japanese mix, as does Britain, but on the monetary side the response is identical.
In the US, the mix is more or less identical, except that in Japan they don’t have the constant wrangling between congress and the president over policy.

It is crucial, too, for Ireland to appreciate what happened, because Japan experienced what economists term a ‘balance sheet recession’. This is what is happening here.

The Japanese bet the house on property and lost. So on one side of the balance sheet, Japan had property that was falling in value and on the other side, they had debts, which remained the same.
So Japan was bust.

Its banks were also bust because they were, like the Irish banks, up to their necks in rubbish. Therefore, the people started paying back their debts, if they could. So they were in no mood to spend. The saving ratio rose. Equally, the banks were nursing their broken balance sheets so they were in no mood to lend out money.

The Japanese economy was caught in what Keynes described in the Great Recession as a “liquidity trap” whereby, irrespective of how low the rate of interest went, if people didn’t want to borrow and banks didn’t want to lend, the economy didn’t respond.
In this environment, Keynes dismissed cutting interest rates as being as effective as “pushing on a string”.

He said that when the economy was trapped, the only thing the government could do was replace the spending that the people and the companies didn’t want to do. Otherwise the economy would go into freefall.

By any benchmark, the Japanese have been successful. They managed to prevent the crisis developing into a full-scale depression. They kept the show on the road. But the cost has been a huge increase in their government’s debt position.

Now Japan, two decades after the crash, is at a crossroads. In short, it is running out of money – well, not exactly running out of money, but it has reached the limits of taking the people’s savings and recycling them via government spending into domestic demand.
For the first time in three generations, Japan doesn’t have a current account surplus. It is running out of savings and will either need to sell its overseas assets to keep funding its obligations or it will have to raise interest rates to attract in foreign money to run the shop. This is a totally new dilemma for the Japanese.

For years, Japanese savers, having been nearly wiped out by the stock and property crashes of the 1990s, bought government bonds and as interest rates fell, bond prices rose, giving them a nice return. This reaction is precisely the same one we are seeing all over the western world now as people perceive government bonds to be a safe place to park money. But as interest rates go to zero and debt levels rise, this doesn’t look like something that can go on forever.

Back in Japan, we see that it can’t go on forever. The Japanese current account surplus is being eroded by the fact that the population is ageing. Retirement has come to Japan and the savings they built up for their retirement are now being spent. Savings in Japan as a percentage of household income were 15 per cent in 1992; they are now 4 per cent.

As noted above, Japan is running out of savings. Now this brings me back to the US, because if Japan wants to continue funding itself, it will have to sell some of its overseas investments.

And guess what is the biggest overseas investment of Japan? Why, American government bonds, of course! Japan holds over $1.2 trillion of US treasuries. What will happen when Japan – a huge economy of $5.46 trillion – starts to sell US treasuries to fund its own welfare state and its ageing population?

Bond yields in the US will rise, and one of the central planks of the US stock rally, which is that bullish treasuries and bullish equities complement each other, might begin to look as shaky as a Japanese nuclear reactor in the face of a tidal wave.

  1. goldbug





  2. JapanZone

    As someone who has been living in Japan throughout the entire “lost decades” I was delighted to see David turn his attention to this country and eager to read his observations. Unfortunately I know too little about economics to debate those issues.

    For the most part the article seems to ring true, though I would say that major, if subtle, social changes have greatly influenced the course Japan has taken over the last 20+ years. There has been a gradual erosion of many of the ties that have held the social fabric together. The way the public handled the aftermath of last year’s disasters is a testament to how strong those ties remain compared to most other countries. But the events have further eroded people’s faith in the government, bureaucrats and the big corporations. The government didn’t handle the situation well, but if the disaster had happened under the watch of the long-dominant LDP (Japan’s version of Fianna Fail), there’s no telling how much worse things might have played out. Meanwhile, the latest poll shows 80% of the population in favour of giving up nuclear power altogether (and while I’d be in that camp in principle, I realize the massive cost for a country now so reliant on imported fuel to fill the gap) and more ready than ever to gather and demonstrate to have that opinion heard.

    • Ireland could have learned a huge amount from what happened in Japan in the 1990′s, I think I have probably said that many times here over the last three or four years. Not only in terms of how it managed the economy despite its banking system, but also in its utter failure to deal with rogue banks linked to the Japanese ‘insiders’, the major keiretsu and their METI buddies (and probably also organised crime).

      Japan is 15-20 years ahead of the rest of the planet, not only all the fancy Akiba gear, but also in terms of reaching resource, economic and population limits.

  3. The economy of war

    David’s archives have some interesting articles, I spent some time there, not a long time I admit, but at a glance I haven’t found anything relating directly to the “economy of war”.

    The latest SIPRI data is clear evidence for anyone interested enough to understand the greater ideas behind the financial heist that is ravaging our nations. It is all connected.

    India is one of the strong emerging new economic Asian powers on the planet, and from 2007-1011 it was the worlds largest importer of weapons with a global 10%. In fact, all the major Importers are from Asia, South-Korea, Pakistan, China, and Singapur.

    Syria, to no surprise increased their imports since 2002 by 580%, Russia delivers around 72% of that to Syria, however most of that are defense systems ground to air and ground to sea missile systems, hence increasing their defense capabilities.

    In 2010 alone, the market for weapons was worth 411 billion dollar.

    I pointed to SIPRI many times before, it is the one of the most important sources to understand global trade and tendencies in the economy of war.

    Their yearbook 2012 launched end of last month.

    In an article I wrote here last year, I pointed out two curves, that described the relationship of the global financial heist and the increase of arms trade at the very same time. It is interconnected of course.

    As a reminder, the globals arms trade of the five largest arms importers as per above was 24% higher in the period from 2007 – 2011 than in 2002-2006, this is the data that was released today!

    The largest exporters are USA, Russia, and Germany.

    So what about China?

    That’s a really interesting but not surprising aspect, while they were the largest Importer form 2002-2006, they now fell to number four, and as you might guess, of course, their arms exports are increasing.

    They increased exports on such an immense scale that by now they are already the sixth largest exporter in the world.

    If you followed the events in Saudi Arabia in the past few years, major deals were approved there as well, de facto the largest deals in over 20 years were made between the US and Saudi Arabia.

    Another interesting aspect is Greece. Still in 2007-2001 they were the 10th largest Importer of arms. – How insane is that? –

    There are many more aspects and plenty of interesting data to digest.

    The overall picture remains the same. Declining resources, global economy, changing power dynamics, the US middle east politics, and war, it is all part of the very same theater. Hence, the solutions for a peaceful and prosperous future can only be developed and understood from these points.

    The chances that this will happen however are very slim in deed.

    In a world where technocrats and powerful corporate lobbies are running the politics of our nations, criminal bankers who hold entire nations as hostage, corrupted politicians who are nothing but bitches of banksters and power lobbies, the chances for a future of equality, freedom, democracy and peace are very slim.

    The projections for a possible future scenario are very grim in deed, the totalitarian tendencies can be seen everywhere. Entire global supply chains of major resources are centralized into the hands of a few, the Glencore development of late is just one example. The quality of news media, in print and broadcast is constantly eroding, producing “Your dear leader’s” style messages, bombarding the public with trash and consumer as well as religious messages instead, and at the same time, new media like Current TV is being banned from the air, as just happened in Italy and the UK.

    The public at large fails to demand the required changes, they fail to show up in significant enough and persistent numbers to make it so uncomfortable for the 0,01% that change no longer can be denied.

    All these events are being presented as a crisis, but the major aspect of this they all omit!

    These events as complex and interconnected they appear, they all are engineered.

    Do you remember the statements of our political leaders in the US, Germany and around the globe back in 2009?

    Too big to fail must never happen again!

    The reality is a different one, too big to fail got even bigger, much much bigger…!


  4. Adam Byrne


  5. Ireland differs from Japan in many ways including the following :

    It speaks English
    Younger population
    More undeveloped resources
    Mobile Population
    More Immigrants
    Less Rigid Laws
    Non Conformist to Social Systems of Conduct
    Quicker to Adapt to Social Mores
    Less Import Controls
    Exports Music & Dance
    52nd State of USA ( economically)
    Non Nuclear

    • Deco

      no sovereignty
      rampant nepotism
      badly scaled infrastructure
      higher hydrocarbon intensity
      a media that is compliant with vest interests
      rigid class concept that the Japanese would regard as dysfunctional
      crime ridden
      drugs rampant
      high level of indirect taxes
      brain drain (again)
      failing educational standards in the past fifteen years
      No sense of shame in the leadership for any of it’s mistakes

      Conclusion : Ireland is in a worse state than Japan.

      • BrianC


        I have to hand it to you 100%. LOL

      • Dorothy Jones

        Tallafornia…LOL….Ratings must have gone through the roof after David Norris’ comments…people warching it who had never even heard of it before.
        [BTW...Lots of good things about Ireland too Deco, not all bad...D]

      • taylorcr

        I think one of the most damaging is zero accountability, particularly in the public sector, but also in government connected private entities.

        If I did 10% of one of the many incidents we hear about I would be fired immediately.

      • Kof

        Smile then fades, ’cause it’s bloody true and that’s a bad buzz.

        I’m afraid we’re getting the government that we deserve.

      • Deco what is Tallifornia?

    • All of these things were also true between 1952 and 1989, when Japan grew phenomenally and Ireland was rotting economically and socially.

      West? Plato? really?

  6. Deco

    Japan is in trouble. Fiscal debts are in a really bad state.

  7. wills

    IMO the Fed / Treasury link up in the issuing of bonds and the Fed’s writing of a check with NO deposit, money out of thin air, to use to buy bond is a creditor that even surpasses anyone else.

  8. redriversix

    Russian T,V reports a Russian Special Forces unit has arrived in the Syrian Port of Tartus this evening,with U.S Special forces operating on the Syrian Border advising Syrian opposition Forces,this could get interesting……..!

    NYTimes reports on Sunday that Israeli and American Intelligence services are insisting Iran is NOT developing a Nuclear Weapon Capability,they identify “MOSSAD” as one of the intelligence services involved……………..

    Pimco,a German Bond Company is preparing For Portugal To go the same way as Greece soon,according to comments made by PIMCO Ceo in Der Spiegel today.

    This Financial War just keeps on giving…


    • Russian TV keeps western corporate mouthpieces like Sky News and Fox in check. Fascinating to watch and compare how the brainwashing is applied from different perspectives

  9. bonbon

    Leading Japanese Economist Names Glass-Steagall, Blasts U.S. and British for Causing and Continuing the New Great Depression

    March 17 (EIRNS)–Daisuke Kotegawa, former top Japanese Ministry of Finance official and Japanese representative to the IMF, named the takedown of Glass-Steagall as the “main structural cause of the financial bubble in the United States and Europe from 2002 to 2007.” Writing for the Canon Insitute for Global Studies, where he is now the Research Director, Kotegawa also nailed the blundering response by the Paulson/Geithner/Darling team in London and New York to the 2008 financial collapse as severely aggravating the global crisis. He compared this to the way he had handled a similar crisis in Japan in 1999 (he was director of the securities division at the MOF at the time), forcing the unwinding of the failed firms’ foreign transactions first, then allowing Japan to absorb the cost of the liquidation, rather than forcing the rest of the world to pay for their crisis — but also throwing several bankers in jail, noting that his repeated advice to the U.S. and London to jail the criminal bankers has been ignored.

  10. Grey Fox

    Meanwhile here at home:
    Dangerous, Irresponsible Journalism —Again!
    Folks, today we have experienced yet another example of irresponsible and downright dangerous journalism in the mainstream National newspapers. The Irish Independent led today with a story titled “Wave of personal debt swamps the Courts”, in this article, the newspaper firstly acknowledged that the level of Court actions is overpowering the system,” THE courts system is bursting at the seams trying to cope with an avalanche of personal debt cases” it goes on to say that “Our investigation found that people from all walks of life are now ending up before a judge for failing to pay debts.
    These include small farmers, former successful business people, tradesmen and those who never held down a job, who are all being hauled into court for defaulting on debts.”
    I agree with one point, and that is, ordinary people have no idea how the Court system works, and it is for this reason the common man/woman avoids and ignores notices from the Court, it is human nature to do this. The article then follows up with a comment from a certain Mr. Holohan, a so called “insolvency expert” and his nugget of advice is, if a consumer is smart they will not turn up in Court!! What a completely stupid and irresponsible statement to make.
    If a person does not engage with a Creditor and in turn the Courts the path is as follows: the Person will receive an Ordinary Civil Bill registered with the Courts, if this is ignored the Plaintiff/Creditor will petition the Court by way of an application for Judgment in Default of Appearance which will be granted when the person continues to ignore, the Plaintiff/Creditor will then petition the Court to have a summons issued for the Debtor to appear in Court for the purpose of examining the Debtors Means and ability to pay. If this is ignored an Installment Order will be granted to the Plaintiff/Creditor and if that order is ignored there will be a further Summons to have the Debtor committed to prison for not engaging.
    The Common Man/Woman needs to understand that there is a simple solution to this flawed and unfair process, which is “The Official Offer”.
    The Official Offer intervenes in this process at the beginning and avoids all the onerous, stressful interaction discussed above, there will be a single Court Appearance at the initial stage and the Judge in most cases will applaud the Debtor for addressing the issue and avoiding wasting the Courts time.
    The Official Offer process is explained in detail on use it! Take back the power! This is commonsense and not anything difficult!
    Contact us if you are in any doubt or need assistance with implementing the Official Offer.

  11. Grey Fox

    Another observation:
    Irish Public Debt to GDP Ratio has increased by 1% over the past week and stands at 149.1%
    Irish External debt to GDP Ratio has also incresed by 1% to a whopping 1233%

  12. Grey Fox

    To further elaborate on my previous figures:
    By contrast to Ireland’s External Debt to GDP Ratio
    of 1233%
    Greece is 216%
    Italy is 157%
    Portugal is 255%
    Spain is 225%
    USA is 101%
    and Argentina is 36%
    Argentina is the example which is used for the obvious, sensible path we should take of exiting the Euro currency, devaluing and moving on.
    We Irish alwasy have to be the best at everything even the bad things.

  13. cooldude

    Interesting article as usual David. I would just like to add to the comments you made at the end that if Japan started selling their US Treasuries that this could send the rates way up. Well it seems this rise in 10 year Treasury rates has already started. In the last two weeks the 10 year rate has gone from 1.9% -2.3% a rise of 20%. Still very early to call this a trend but this is something I have been expecting to happen for a while. Both Russia and China were lowering their exposure to Treasuries throughout last year. Russia actually halved their holdings and China has significantly reduced theirs. Details and charts of this are in this interesting article
    What makes this interesting is that it is the initial stage of the rejection of the $US as the world reserve currency. Throughout history when a currency system began to fail the first place it is rejected is in foreign countries. This even goes back to the rejection of the Roman Denarius which was the main global currency at the time. The Romans started to debase the silver content of the coin and eventually India and China refused to accept this debased coin in trade. Eventually the coin was shunned everywhere including Rome itself and it became worthless. This pattern has been repeated many times in history and it would seem it is starting again. The Russians and the Chinese have been furiously buying hard assets such as gold, silver, oil, agricultural land over the last few years to lower their exposure to the $US dollar. They have been very careful doing this as they want to get as much value for their dollars as possible and not cause a fuss. They are obviously positioning themselves for the asset backed currency system that will have to be put in place when this current one finally blows up. The $US treasury rate will be a key indicator of how this move progresses.

  14. clairem1

    I began reading this article and had to stop a few paragraphs in as it was making me quite angry. How can you report that that the Fukushima disaster was ‘controlled by engineers’ when the fact is that no-one had control of the situation in time to stop this disaster from happening. A year on, Fukushima is STILL leaking radiation into the Ocean – where is the control in this? There is over 1 million tonnes of radioactive waste that the Japanese Govt does not know what to do with, seafood shipments from Japan are increasingly affected by radiation and over 10,500 hectares of land around Fukushima can no longer be farmed and this is all just the top of the iceberg. I suggest Mr McWilliams does his research before making incorrect sweeping statements about such an important issue.

    • Hi Clairem1,

      Fair points. I was simply making the point that a reactor hit by and earthquake and a tidal wave suggest that if was quite a sturdy structure.

      That this was a near-miss is beyond doubt and for a country that gets/got such a huge amount of its energy needs from nuclear, a Japan without nuclear in the future will be a country highly dependent on almost 100% energy imports, which leads to its own problems.

      But thanks for the clarification of the continued radiation mess. My mistake and sloppy writing.


      • You are a brave man to admit so David and that is called integrity. I love the honesty. Don’t change just because of a mistake that anyone could have made. You are still head and shoulders above the majority of Irish journalists and most of us know it

    • bonbon

      Hey guys wake up! Japan has 58 nuclear reactors, and Fukoshima was hit by a 45 METER wave, 2 times higher than the 20m wall, outing the diesel cooler system. No one was hurt by radiation, and 28,000 people disappeared. That quake moved the earths polar axis. The entire ring-of-fire is set to go off and Christchurch is an indication. The real question is are we prepared?

      The Japanese prime minister had the same hysterical fit as Merkel and wanted to shut the entire power system off. The EU alone has this hysterics (plus Switzerland).
      So we have a bankrupt EU, with waves of hysteria, green flagellants wandering the desolate countryside – a fine example! And Obama wants to bomb Iran – who does he serve?

  15. molly66

    David what happens when Japan starts cashing in it’s bonds will the USA not just print more dollars ,because if they don’t there will be a lot more a steak for the rest of the world as well.

  16. Puschkin the Black and White Cat

    Myself and my pals have arranged a small meeting in our local pub to discuss the Fiscal Compact Referendum. We have decided to canvass our town for a NO vote. Does anybody have any ideas here? We are simple fellows, we are ordinary guys with no political involvement.

    But we are fired with rage and want see our Government masters embarrassed and beaten low by their German overlords (whom we do not fear). I read David’s column on a regular basis and I am awed by the comments from people by George Bauman and others. My pals and I have had enough and now we fight back with the only weapon we have, our humanity.

    So we would appreciate any response what so ever, in particular we would like some ideas to put on our canvassing material, anything that will persuade people to vote no in this truly hideous referendum.
    Thank You in advance of any advice or suggestions, are there others like us ?

    We are poor people and we are therefore afraid “they” might hurt or intimidate us. We have no faith in the media and we feel alone.

    • Grey Fox

      There are lots of people like you.
      Don’t be afraid that they will hurt or intimidate you because if that is their intention saying nothing will not protect you, they will do it anyway!
      What part of the country are you in?

    • Juanjo R

      Perhaps contact the United Left Alliance and chat with them? They are an alliance of the PBP, SWP and other community groups.

      Here’s where they ( Richard Boyd Barrett ) speaking stand on Government collusion with the France/ Germany driven EU agenda;

      • Puschkin the Black and White Cat

        Thanks Mark , we read the ESM document ourselves and were shocked by these things, send this Tube to as many people as possible, thanks again

    • Dorothy Jones

      @PBWC: Is the meeting an open one?

      • Puschkin the Black and White Cat

        Well I don’t mind who comes along, but since we all know each other and we have no leaders or organisers, we just feel safer moving our boundaries out bit by bit. So I guess some people may like to be quiet for a while until we plan and start the actual canvassing.
        People level democracy is not appreciated in North Count Dublin! Personally I’d love more to come, but I’ll run it by the others first.
        We had 11 at our first meeting and we have a target of 22 people for our next meeting that’s 10 teams of 2 canvassers, there’s 2,000 homes in the town, we are local and each team will be well know/respected in their estate/area. In fact we are begging our neighbours and friends/relations/family to say “NO” to this insult. We will canvass the town twice, once before and once after the “big scare” is put out by RTE and the papers.

    • Hi Puschkin

      You need a boot up the arse. Your words made me sad because for the first time I clarly sense the real admission of defeat in the hearts and minds of the Irish people. I salute your honesty and know that you have humanity in your heart and it makes this heart hopeful knowing that there are people like you and your friends out there. Reminds me of the story of Robert the Bruce and the spider

      Your words resonate because they are sad and pathetic (and that is not a bad thing) and I know you speak for many up and down the country and not just those living in imagined nirvana in the peaceful leafy lanes of North County Dublin, that I once knew so well

      No, these intimidating chaps don’t like people level democracy because they find it easier to bribe a local gombeen politician. They can’t bribe and control the will of the people so easily and this is why you and your friends have a duty to attend to. Secretly they fear you and hope that you never become aware of your true strength. Comprende?

      The country is sad, melancholic, suicidal and pathetic. The people of Ireland have been brainwashed and abused (physically and mentally) beyond all reason by the powers that be since time began

      Enough is enough. I hope something positive comes out the the meeting at that you come back here and share the experience with like minded brothers

      Very good luck

      • Puschkin the Black and White Cat

        Thanks Pauldiv.

        It’s going to be hard work and we need your type of encouragement !

        No Pasaran

    • bonbon

      Oh leaderless and organizerless ever-so-acceptable, raging and unthinking readers :

      Give up the poor Tiger paralysis. Tigers are not human after all.

    • Harper66

      Hello Puschkin,
      welcome back haven’t seen you posting in a while. I admire what you are doing. Apart from raising the issues raised in the youtube vid, I think it might also be worth ponting out to people just what countries with a similar charge offers ie. free bin collection and rubbish tips and free health care etc. it would also be worth highlighting the massive wage structure of senior national and local government.

      Personally i take exception to this charge and am not paying it because it going to fund a massively over paid and under reformed senior national and local government.

      I would steer clear of associating your efforts with any political group.

      I wish you the best and once again I admire your efforts.

      • Puschkin the Black and White Cat

        Thanks Harper

        I can’t helping the remembering last scene from the Grapes Of Wrath.

        Ma Joad — Grapes Of Wrath

        “We’re the people that live. They can’t wipe us out; they can’t lick us. We’ll go on forever, Pa, ’cause we’re the people.”

        No Pasaran

    • StephenKenny

      I was getting my haircut the other week, and was saying something similar to the barber.
      He sighed, and said that everyone who sat in that chair said these sorts of things, and felt that they were completely alone in their beliefs.

      In previous generations the left had their media, the right had theirs, and the middle ground had theirs. Today, there is no media for people such as David, so we are left to feel alone, and therefore ultimately weak.

      • Puschkin the Black and White Cat

        Thanks Stephen

        Ma Joad – Grapes Of Wrath

        “We’re the people that live. They can’t wipe us out; they can’t lick us. We’ll go on forever, Pa, ’cause we’re the people.”

        No Pasaran

    • Alanfromnavan

      I am glad to see ordinary Irish people at last taking an interest in how our country is run. We all have been guilty of being disinterested for too long, leaving the field open to our crooked politicians.And look where that has got us. How many times have people here got a responce from a work colleague or a friend that they are not interested in politics whenever we raise an issue that might concern us.
      I am with you Puschkin as far as this Compact deal is concerned. David has said here many times and he is right, “that this Compact will do nothing to solve the crises”.
      A question to ask when you and your friends get together is, “What has our Irish MEP’s been doing during the worst economic crises Europe has ever experienced”.
      How do they justify their huge salaries when during our worst crises ever the best any of them can come up with is, “De Rossa telling us that Kevin Cardiff is the best man for the job”.
      Its obvious to me where the real power lies, its not in the European Parliment. Its in Berlin.
      We dont live in a democratic Europe or a democratic Ireland for that matter. So we need to do our best to take our democracy back, and what your doing is a good start and I welcome and thank you for your efforts.
      I live in Navan myself and if anyone form the Meath area would like to get together to organise in the same way as our friend here I would welcome your help.

      • Puschkin the Black and White Cat


        Your comments will greatly encourage us in this toil we undertake. The key, I believe is to start with 5-10. No officers, no name, pick your aims (ours to defeat the referendum) and then go for it. Get commitment.

        Best of luck.

        No Pasaran !

    Look at this. The US is only 0. 5 Trillion away from the 16 Trillion set by Congress. What will happen in May?

    • Grey Fox

      $15,542,149,151,345 right now and rising fast!

      • Grey Fox

        Today, €15,567,537,302,254
        Up a mere 25.4 Billion
        Jaysus, America’s debt is rising daily by almost the same amount “we” owe for Anglo in total.
        And this is all supposed to be “sustainable” !!!

  18. ouldbegrudger

    David, David, David….
    Para 2&3 completely mis-characterises the Fukushima situation. It is still a nightmare scenario. If this was a “near-miss” I wonder what you think a real disaster looks like. Shame.

    I know Japan and the reality is that they have run out of road both literally and figuratively, with roads and bridges to nowhere built by Gov. stimulus. The residential property market remains at a third of the 1989 peak with 50 year (generational) mortgages. Debt/GDP at 130%.

    The only lesson for Ireland is that house prices and stock-market can go down 65% and stay down for 23 years plus in spite of a large trade and capital account surplus.

    • redriversix

      Is it true that Fukushima is bigger in comparison to Chernobyl ?

      • I just read these posts after posting my own thoughts on the infamous paragraph three and was delighted that you guys spotted it too

        Maybe David does not visit because if he did then he would surely never have wrote it

      • bonbon

        Rubbish. And Chernobyl was totally exaggerated. The fire at Sellafield in 1958 was about the same, exactly the same tech and no one was told for 28 years.

        Strange silence on that one eh?

        More people died being suddenly moved from Chernobyl and Fukoshima than from any radiation. Fukoshime is a completely different system to Chernobyl, by death by popular opinion needs not tech.

        • So you are a fan of nuclear power. Hip hip hooray.

        • clairem1

          Get a grip Bonbon. To say that no-one has been hurt by radiation only goes to show your ignorance on the matter! Euro-Stability, American Debt, Iranian Defiance – none of this will matter when humans finally destroy this planet – the one and only which supports life. Sometimes the bigger picture is the ONLY picture. Idiots

  19. Tony Brogan

    Here is a 20 minute audio interview of James sinclair of international acclaim on matters financial and gold.
    The US has enacted “Nuclear financial war” on Iran and now threatens India with removal from the SWIFT system of wiring money settlement, effectively closing the country’s banking system.Japan could be on the next as it attempts to buy oil from Iran
    Well worth listening to David as the ramifications are huge worldwide.

  20. David. Fascinating and educational stuff from an economics point of view but I have a problem with the third paragraph where you appear to suggest that the Fukushima nuclear disaster is nothing serious and that the Japanese are well in control of the situation. They are anything but according to Jeff Rense

    Rense has been researching Fukishima from the day it happened and if you go to his site and just scan the headlines relating to Fukushima it might make you reconsider

    • Pauldiv,

      Thanks. I will stick to the economics!



      • Your exclamation tells me I have outstayed my welcome David. Ok off now I shall f**k

        I might re-read the excellent two part account of the 1970 European cup final between Celtic and Leeds just for old times sake

      • bonbon

        DMcW, do not be intimidated by the greenie hysterics.

        Green economics will kill us all quicker than any accident.

        • No-one is getting hysterical

          We are living in an oil based economy and many synthetic products are manufactured from oil causing enormous toxic waste problems for the environment

          People have been brainwashed by big oil and big pharma to believe that oil is essential. It is not

        • bonbon

          Good to hear that. With a nuplex economy we will manufacture carbon fuels and use fossil for materials.

          Green power can only support 1-2 billion, and we have a 6000GW deficit right now. Pull high density power out of an economy and commit genocide. No nice way to put it.

          This is economics, not “money”.

    • bonbon

      The Japanese can handle that – even the Brits handled Sellafield for God’s sake. Germany cannot even handle tsunami’s 6000km away and neither the Euro.

      • The Japanese are not as smart as people give them credit for. Neither were the Germans

        • bonbon

          No one is smarter than the Brits, what?

          See the Japanese Ministers statement I posted above for a POV on “smartness”. And when Japan served the British Crown entering WWII it was not smart at all. Truman serving that same Crown bombed Japan.

          It is very un-smart to serve that Crown, as FG right now is doing although Obama does a better curtsy!

  21. ASinclair

    The Japanese people have trusted their government and the government has wasted a huge chunk of the substantial savings of the Japanese people. About 25% of total bank assets is comprised of JGB’s. Japan Post is the largest financial institution in the world with over 70% in JGB’s. GPIF is the world’s largest retirement fund with over 70% in JGB’s. The problem for Japan is demographics and the weak economy. The savings rate has dropped to 2% and is projected to go negative as more and more retire and use up their principal. GPIF is liquidating $80 billion of JGB’s this year and more next. All of the largest holders of JGB’s are becoming net sellers. There is no one left to buy the huge quantities being issued other than the BOJ and that is a road to destruction of the yen. It really does not matter that 95% of the debt is held in Japan; the question is, who will buy the next $4 trillion of issuance? It must come from outside Japan. Then the question, at what rate? Enough said.

  22. The Black Economy hat

    Also from Grapes of Wrath

    The bank is a monster. Men made it but they can’t control it!

  23. Dorothy Jones

    Christmas tree lights remained on while a fragile life which was silently snuffed out, went unnoticed…the little piece of tinsel still in the window of the run-down terraced house which was a storey shorter than its neighbours.
    God, if ever there was a metaphor for what this country is experiencing…..a heartrending tale

  24. michaelcoughlan

    and your point is David?……

    • michaelcoughlan

      hmmmm……….. more of stating the obvious I should say.

      • Michael

        The point is that JGBs are the most expensive asset in the world. Doesn’t seem that obvious as demand even at these yields remains firm.



        • David,

          One of the greatest bordeaux of all time a 1947 Château Cheval Blanc sold for $304,375.

          Assets are about price, expensive is relative

          Real matters of life are of a different kind. Love, happiness, health.

          The effects these people are causing on real matters of life for millions of people, it is the real price, too expensive!

        • StephenKenny

          Which is very strange, and has been for a while now.
          One possible argument is that all the world’s main central banks synchronously working to do what in previous times would have resulted in a lower currency and higher interest rates.
          But since it’s happening everywhere at the same time, there’s no stronger currency for other currencies to fall against, and there’s no government debt that is improving compared to others, so the relevant markets/exchanges (FX & debt) are the wrong place to be looking at for indicators of economic well being.

          Unfortunately, they are the places where everyone under the age of about 70
          know, for a fact, are the best and only places to look.

          Long, long ago, we mixed up economic indicators with policy targets, leaving us staring into a kaleidoscope of misleading statistics.

          • Tony Brogan

            Quite right Stephen

            All currencies are falling against hard assets. World wide inflation combined with stagnating economies. i.e. stagflation.
            Printed money is moving (has Moved ) to safe haven bonds. Welcome to the latest bubble that when popped will make the Irish housing market look tame.
            That is why even in high or ghigher interest rates the way to
            Protect yourself. Farmland, silver, gold!!

        • Tony Brogan

          Right on David
          Bonds are the biggest bubble yet seen or unseen by most!!

  25. Grey Fox

    US National Debt forcasted forward to this day 2016 $21,539,281,600,345 and rising.

  26. Tony Brogan

    Hi David

    Here is a posting from
    It lays out the perilous position we have rapidly moved to with the rapid errosion of civil liberties. Eurocrats and bankers are doing it in Europe and this is the US.
    It is off the Japanese topic but perhaps you can address this in a future edition.

    Ireland must vote no to the referendum and then move to regain sovereignty. I fear it is almost the last chance.

    It’s All About Control
    21 March 2012

    By Greg Hunter’s

    Ever since the original Patriot Act was passed by Congress in 2001, American civil liberties have steadily shrunk and government control has steadily grown. In a financial crisis, your bank or brokerage can severely restrict the amount of money you can withdraw from your accounts. The government can now legally assassinate so-called terrorists anywhere in the world, including on U.S. soil. It can also indefinitely detain suspected terrorists without charge or due process, all thanks to the National Defense Authorization Act recently signed into law by the President. The government can shut down a website anywhere in the world without due process, just ask Megaupload owner Kim Dotcom from New Zealand. (Yes, that’s his real name.)

    As of last Friday, President Obama has authorized the government to take just about whatever it needs in the name of national defense. It is an Executive Order appropriately called “National Defense Resources Preparedness (NDRP).” This allows members of Obama’s Cabinet to take resources such as livestock, water, fuel, farm equipment, vehicles, planes, boats, food and just about anything the government thinks it needs for “defense preparedness.” I am just skimming the surface here as there are many more details in the order. (Click here for the complete Executive Order – National Defense Resources Preparedness — NDRP.) Many are calling this a setup for peacetime martial law. After reading the Executive Order, I don’t see how anyone could disagree with this statement.

    My question is why? If all that happened was an extension of the Patriot Act in 2011, I might not worry that much (although, Congress basically traded liberty for so-called security.) But when you look at several of the government’s big power grabbing moves, you can’t help but ask what are they getting ready for? Is it a Middle East war that will probably turn into world war? Is it another financial meltdown worse than the one in 2008? Or, is it all of the above?

    On the war question, I have written many posts that say war is a “when” not an “if” scenario. Just last week, Israeli Prime Minister Benjamin Netanyahu said he did not need the approval of the U.S. to attack Iran. Iran has said it has the right to strike first if it feels necessary. Now, there are reports of Russian troops landing in Syria. The U.N. calls this development a “bomb.” The world hasn’t been this close to a global war since the late 1930’s. War would plunge the world into a deep depression so fast that many could be wiped out financially literally overnight.

    Another financial meltdown is not just probable but highly likely. In my opinion, and many other experts, another financial crash is also a question of “when” and not “if.” The Fed pumped out $16 trillion in the wake of the last meltdown, and it has frozen interest rates at near 0% through 2014. Talk of a so-called “recovery” is preposterous with a record 46.5 million Americans on food stamps and declining home values despite near record low mortgage rates. Sure, the stock market has doubled since 2009, but it was cut in half after the 2008 meltdown. How is anyone making money? Charles Biderman of the Wall Street research firm “Trim Tabs” recently said, the increase in stocks came mainly from trillions of dollars of new money printed by the Fed. (Click here to hear Mr. Biderman.) Shouldn’t this have fixed the economy? Shouldn’t the banks be able to go back to “mark to market” accounting and not value real estate and mortgage-backed securities at whatever the bankers think they will fetch in the distant future? No way is that going to happen because nothing is fixed from the last meltdown. The failing economy was just papered over with trillions of freshly printed dollars.

    Economist Dr. Marc Faber of agrees the economy has been propped up by money printing, but that will not stop a financial crash forever. In a recent interview, he said, “. . . I think eventually the financial system will be an MF Global where you don’t get your money back from the banks and the investment banks and from the mutual funds and so forth and so on. And, so I think everybody has to think to himself, how do I protect myself against such a black swan event.” (Click here for the complete interview from Dr. Faber is recommending physical gold and silver as portfolio insurance. (FYI, Faber also recommended buying stocks in 2009, at the very bottom of the last financial meltdown.)

    The stock market is not the only part of the economy facing a crash. Star banking analyst Meredith Whitney says there is a “tidal wave” of municipal bond defaults coming. reported last week, “In late 2010, Whitney told 60 Minutes that municipal defaults could run up into the hundreds of billions of dollars although that hasn’t happened. Maybe not officially, but insolvency is a deepening problem, and defaults are still on the way. . . . So there’s been every effort on the part of the states to prevent this tidal wave of defaults, which is going to happen sooner or later. It’s happening at an accelerating pace. . . .You’re either willing to see it or you’ll shut your eyes, and if people want to tell me, ‘Oh, I was wrong,’ because this hasn’t played out, stay tuned.” (Click here for more on the story.)

    I’m betting Ms. Whitney is right, and I think the government is betting the same way. Maybe our leaders feel they have to make all of these liberty killing moves to maintain the union in a financial catastrophe? Maybe the government sees an ominous world war on the horizon? Whatever it sees, it is definitely not good times ahead, and it can’t be that far away. The moves the government has made are not for liberty and freedom—it’s all about control.

    • joe sod

      as for japan i am an optimist and have just invested in a japanese fund, the people are resilient and resourceful and have dealt with and are dealing with the disaster that confronted them, i dont have first hand experience in that ive never been there, but have met japanese people and have been impressed by their integrity and knowledge, japan is an innovator and is the global leader in car manufacturing and many aress of technology that are vital for modern life but might not be as eye catching as apple ipads. I know that the japan has very high government debt levels, but what western government doesnt now, what about US and now EU going down same road. To see a country that dealt with having two atomic bombs dropped on it, that still had the pragmatism to realise that it needed nuclear power itself, and now after all that it has to deal with the Fukushima disaster. As for Ireland we cant even deal with a few ghost estates, we are looking around for someone else to blame rather than looking in the mirror

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