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只有日本人才想的出來 April 11, 2017

Posted by hslu in Food.
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你敢吃蟲子嗎?如果你敢,日本有一家拉麪館賣蟲子拉麪。

Source: 鏡報

去東京玩,別忘了來一碗。只此一家,別無分號。別的地方是吃不到的。

就像日本做的免治馬桶,這一碗麪是日本先進,奇怪,困惑,解脫,驕傲,還是無法解釋?

日本版”小確信”。

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I have only one question March 9, 2017

Posted by hslu in Global Affair, Knowledge.
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Abe, how much contaminated water is leaking into the Pacific Ocean every day?

Well, may be two: when will it be stopped?

IBM Watson AI is Taking over White-Collar Jobs in Japan January 4, 2017

Posted by hslu in Economics, jobs, Technology.
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Is your job safe? Are you ready?

http://www.dailydot.com/debug/ibm-watson-japanese-insurance-agent-jobs/

You better watch out, You better not cry, You better not pout, I’m telling you why:

Uncle Watson is coming to town!

He’s making a list, And checking it twice, Gonna find out who’s leaving or staying,

Uncle Watson is coming to town!

He sees you when you’re sleeping,
He knows when you’re awake.
He knows when you’ve been lazy or good,
So be good for goodness sake!

OH!…

You better watch out, You better not cry. You better not pout, I’m Telling you why.

Uncle Watson is coming to to town!

Will Uncle Watson call you name soon?

Are you ready?

Japan is going negative, except January 29, 2016

Posted by hslu in Economics, Global Affair, Japan.
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Negative population growth.

Negative GDP growth.

Negative wage growth.

Negative foreign currency reserves growth rate.

Negative loan growth rate.

Negative foreign direct investment growth rate.

Negative current account growth rate.

The 10-year Bond rate is declining and may go into negative soon.

The list goes on.

And today, we have another negative added to the growing list:

Negative interest rate on some deposits.

It appears that the massive Quantitative and Qualitative Easing (QQE) implemented initially by BoJ’s Haruhiko Kuroda on April 4, 2013 and followed by a series of others are not working to pop the inflation rate to 2% target.

 

Something in Japan is positive though: BoJ’s balance sheet and Japan’s national debt.

Slide2

Japanese central bank balance sheet. Source: http://www.tradingeconomics.com/

Slide4

Japanese national debt as a percentage of GDP. Source: http://www.tradingeconomics.com/

Slide1

Source: Bloomberg

But, the picture isn’t very pretty.

Japan is moving on a slippery slope heading into the land of no return.

 

 

China’s fight against Japan will continue July 27, 2015

Posted by hslu in China, Global Affair, Japan.
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This Yahoo article is a fair assessment of the animosities between China and Japan and Korea and Japan.

“Why Asia is still fighting over World War II”

http://news.yahoo.com/why-asia-still-fighting-over-world-war-ii-161019375.html

For a detailed description of Japanese past aggression against China, from the First Sino-Japanese War (甲午戰爭) in 1894 where most war was fought in Korea, resulting in the annexation of Korea by Japan and Japan’s occupation of Taiwan to 918 Incident (九一八事變) in 1931 which led to the Japanese occupation of northeastern China (Manchuria) to the Second Sino-Japanese War from 1937 to 1945, known to us as 八年抗戰, the following websites provide facts about the subject:

  1. http://www.cnd.org/mirror/nanjing/NMchron.html (English)
  2. http://www.zwbk.org/zh-tw/Lemma_Show/220595.aspx (中文)

Japan has long sought to erase this past aggression against China, Korea, Southeast Asia, Taiwan and the U.S. from Japanese’s text books and current PM, Abe, against majority of Japanese people’s opposition, is trying to change Japan’s 70-year old pacifist constitution which prohibit Japanese military from engaging in any forms of military intervention in foreign conflicts where Japanese allies are being attacked, e.g., Middle East.

 

 

Abe’s actions have incited  fresh pains and raised old wounds among citizens of China and Korea. But, I am confident that Japan is no longer a threat to China no matter how Abe changes Japan’s constitution because Japan is on the brink of collapse economically.

With a national debt of 226% of its GDP and an annual federal deficit of around 40% of its budget, Japan will soon be buried under the weight of the debt. With declining population and a generation of younger Japanese experiencing nothing but recession for their entire adult lives, Japan under Abe is digging a deeper grave for Japan if he wants to increase Japan’s military outlays. Let Japan soldiers fight a war along with American GI’s and we’ll see what ordinary Japanese think this action and changed constitution will bring them.

Japan has been shielded from military conflict for the past 70 years after the United States dropped two atomic bombs on two Japanese cities. The island country has enjoyed fast economic growth post WWII because they practically didn’t have to spend anything on military. With a fast aging (and shrinking) population, Japan should focus its national attention on economic revival. Instead, Abe is leading Japanese to a road with no hope and no future.

Japan has lost two decades after the Plaza Accord was signed in 1985 which led to the collapse of Japanese real estate and stock markets. Do Japanese citizens want another lost decade under Abe? I am afraid that they are living it and they don’t have a choice.

 

 

Abenomics? What Abenomics? August 11, 2014

Posted by hslu in Economics, Japan.
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Politicians say things to grab power and to get votes. They don’t necessarily
know how to govern.

Abe of Japan called for higher inflation in Japan and demanded a devaluation of yen before the general election. This was his second time around for the top job in Japan. His first term ended in disgrace and he was ousted in a year. He wanted government stimulus to revive Japanese economy and promised changes in out-dated regulations.

He called his strategies ‘three arrows.’ Others dubbed it Abenomics.

Abe was ushered into power. Long time dovish BoJ chief was replaced. The new chief banker started the printing press and flooded the economy with lots of cash. Yen lost 25% of its value. Nikkei soared. Government stimulus spending was easily passed. Abe’s party then won the majority of the upper house of the Diet in an election.

All ducks are in line now and Abe has no execuse. He has to go to work.

Abe asked for a cheaper yen. He got it. Well, with a cheaper yen, inflation comes with a vengeance. Everything gets more expensive in a hurry. All Japanese people are suddenly poorer. Abe then raised the sales tax to 8% from 5% and promised to raise it again to 10% next year. He diddled around the edges on his 3rd arrow and passed some new laws to reform govrrnment regulations.

With all that accomplishments in the rear view mirror now, what did Abe manage to accomplish?

This chart says it all:

image

Real wages came down hard and Japanese workers are losing the battle against the three arrows released by Abe.

The 3.6% unemployment rate looks like a miracle in the making. Well, it’s not that Japan all the sudden created many new jobs. The low rate was caused by a shrinking population and a shrinking labor force.

Abenomics is doomed to fail. I said it before in this space. I still don’t see any hope yet.

Abenomics looks more like Abedisaster now.

好戲登場了 June 30, 2014

Posted by hslu in China, Economics, Global Affair, Military.
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A new round of arm race in Asia is about to start with Japan’s announcement today.

image

Source: CNBC mobile.

Let the show begin. The last one standing will be the one with the deepest pocket and lowest debt.

Soviet Union lost the war to the United  States because the former was broke. Let’s see how much further Japan can go with a national debt to DGP ratio of 220+%. The race isn’t just about arms though. The war will be fought on the economy too.

Korea will join the race soon.

Last I checked, Japan imports about 99.5% of its crude and natural gas needs. This serious shortcoming is like the 紧箍儿 on 孫悟空’s head. As long as this choke point is being controlled by another nation, Japan’s option will  be severely limited. This is kind like a scene in 西遊記 where no matter what 孫悟空 does, the monkey king just cann’t escape from Buddha’s hand.

Btw, is this 阿倍’s secret 4th arrow since the first two got lost in oblivion and the third was more like a dart looking for a target?

We will see how far the reform will carry Japan to.

In the mean time, let’s bring it on. I have a good show to watch.

Will you join me?

Now what, Abe and Kuroda? April 14, 2014

Posted by hslu in Cold War, Economics, Energy, Global Affair.
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Abe wanted inflation and you got inflation. April’s (2014) inflation rate could be as high as 3.5% according to data compiled by Bloomberg. That’s the highest since 1982. You have to thank Kuroda for that.

You wanted a cheaper yen and you got a cheaper yen. Yen dropped from about 75 yen to a (US) dollar to about 101 yen to a dollar as of today, 4/14/2014. That’s a whopping 34% drop in purchasing power for ordinary Japanese citizens. Here, Kuroda did it for you. Yen was trading as low as 105.3 yen to a dollar three months ago but it has stopped its downward movement. Besides, your competitors such as China, Korea and Taiwan have all devalued their currencies in recent months. In short, the benefit of a lower Japanese yen is fast disappearing in international trade.

You wanted an increase in sales tax and you got an increase in sales tax starting April 1, 2014. Sales tax has risen to 8% from 5% and it is due to go up again in 2015 to 10%. The increase is the first in 17 years and it will make ordinary Japanese people that much more poorer. Last time when it happened in 1998, Japanese stock plunged 30+%. It will likely happen again judging by the recent performance of the Nikkei 225 index. A massive head and shoulders pattern is about to complete with yesterday’s drop penetrating the neck line. Even worse, the Nikkei 225 index is trading below its 25-, 50- and 200-day MA’s; not a good sign.

Nikkei 225 index

Nikkei 225 index

You wanted both houses of the parliament and you got them both. What you were supposed to do was to embark on structural reforms but nope, you focus your energy on worshiping dead WWII class A war criminals. You worked on revising your constitution. You worked on arming your country instead. Labor market reform can wait. Corporate tax system can wait. Massive debt problem can wait. Ordinary citizens’ plight can wait.

Japanese people have to face 10% hike on their coffees. Cost of a haircut will rise by 8%. Suntory will increase the price of drinks such as Flavan tea, Kuro Oolong tea, and Goma Mugicha, at their vending machines by 8% too. A Ramen restaurant in Shinjuku had to increase the price of its cheapest Ramen from 200 yen to 250 yen; the first increase in 20 years.

Many of the increase in prices will take effect on April 1, 2014, the beginning of Japan’s fiscal year. This is in addition to the 3 percentage points rise of the national sales tax.

So, Abe, what are you going to do? I know Kuroda will provide more QE just like Bernanke did when nothing seemed to work. The bottom line is that Japanese national debt will rise even further; from the current 220% of GDP to maybe 250% of GDP in a few years. Japanese people will be poorer. Real salary will drop. They will pay for the higher energy costs because of a cheaper yen. If inflation keeps up at current pace, more price hikes will be likely in 6 months or a year.

While Japanese people suffers, Abe has started a cold war against China. Abe will raise defense spending and its expand military bases. America will be glad to sell Japanese more weapons and top-of-the-line fighter jets.

The buying binge will continue until no one wants Japanese yen anymore. And that’s when Japan will bankrupt just like Greece did a few years back.

 

Japan – Struggle to Escape Deflation Contines February 14, 2014

Posted by hslu in China, Cold War, Economics, Global Affair.
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The radical policy adopted by the new Japanese government is important because it will upset the balance of power in Asia politically and economically. It will also escalate an arm races among major Asian countries. As I allured before, the US dollar has seen significant upside against Japanese yen because of a pro-growth policy adopted by Japanese government in November 2012, dubbed Abenomics:

1)         Massive QE by Bank of Japan the like of which has never seen in the history of the world,

2)         Fiscal stimulus from Japanese government, and

3)         Structural reforms by the government.

The target of this new policy is aimed at popping up Japan’s inflation to 2% in 2015 from more than two decades of deflation. BoJ also want inflation to stay below 2.5%.

With the approval of the United States, BoJ has done its part and is taking a “wait and see” attitude. However, the value of yen has dropped by 20+% against the US dollar. However, since Japan already has 35% of its products manufactured in foreign countries; a lower Japanese yen may not have the anticipated results of stimulating Japanese exports. Besides, when push comes to shove, other Asian countries, e.g., Korea, Singapore, Taiwan and Vietnam, will devalue their currencies to compete for market shares. In any case, a lower Japanese yen is a given in the near future because BoJ will see to it that it will become a reality. This risky “monetary experiment” will take time to play out and no one knows how it will end. In addition, Japanese stock market, in anticipating a booming economy, higher exports and more consumer spending, has reached the level unseen for many years.

Government stimulus (i.e., more national debts) has been adopted but its effect on the economy will be minimized by the upcoming sales tax rise from 5 to 8% in April 2014. It is scheduled to go up to 10% in 2015. Japan has deemed the higher sales tax necessary in order to pay for its mountain high national debt and massive deficit. However, the immediate impact on the economy is very negative because consumption will drop due to higher taxes. It looks to me that Japan is really caught between a rock and a hard place and Japan has no one to thank for other than the US dating back to the Plaza Accord enacted in 1985.

Recently, the structural reforms, which will take time to play out, have taken a back seat because Abe went to the controversial Yasukuni war shrine where “Class A” war criminals charged by the Tokyo tribunal after Japan’s defeat after WWII were commemorated. He basically took his eyes off the economy and focused instead on his or his party’s right wing agenda. His actions have even taken America by surprise according to publish accounts and has caused anti-Japanese sentiments in China and Korea. I believe that America wants thing stirred up in Asia but it don’t want a war between China and Japan. That being said, I do not rule out that America was in it in the beginning in order to find out where China’s bottom line is. China’s opposition and its subsequent declaration of new flight zone in the East China Sea might escalate the already volatile situation into something much more explosive. I expect small confrontation will happen but major event is not likely. I also expect that America will not send its soldiers to fight the war for Japan either. America can’t afford it because it is broken.

I surmise that Abe probably wanted to:

1)         Increase his personal popularity in case his economic reform doesn’t produce anticipated results.

2)         Strengthen his party’s control on Japan’s political landscape in order to push for more structural reform.

3)         Move Japan to pre-WWII status in the world with an army and advanced weapons. The US has agreed to sell some F-35s to Japan and Abe has vowed to build several new was ship in the near future.

4)         Stimulate Japanese economy by waking up nationalism of the younger generation, or

4)         Fulfill his personal traditionalist ambition and Japan’s right wing agenda.

I of course don’t know where this hostility will lead to but it could morph into a “Black Swan” event when no one was paying any attention to or when everyone is expecting the best. If it happens, it will be very destructive to the economies and financial markets in the world.

Personally, I think, judging from lack of development in recent months, structural reforms in Japan will face strong oppositions from lobbyist groups and the highly hyped reforms will have minimum impact to the economy. If and when the 2% inflation target is reached, BoJ will lose control of the long rate which will significantly increase Japan’s interest expense. The sales tax hike will act as a drag on Japan’s economy and Japanese economy will eventually crumble under its crushing debt of 220% (and rising) of GDP and a totally unsustainable 50+% annual deficit.

It was said that Japan owes majority, ~95%, of its debt to its citizens. As such, Japan government has no urgency to pay the principles back to its creditors and the level of enormous indebtedness can continue into the indefinite future. I seriously doubt it but who am I to say about that? When this source of funding is reduced as more seniors stop putting money into Japanese Bonds and start redeem their savings to live on, Japanese government has no option but to look for commercial sector to keep the government running. If and when it happens, interest rate on Japanese government bonds will rise and if the BoJ can’t keep the situation under control, a financial crisis on the order we have never seen before will explode right in front of our eye.

Japan’s current account deficit, the broadest measure of Japan’s trade balance in goods, services and investments with the rest of the world, is worrisome too. Because of the nuclear disaster in Fukushima on 3/11/2011, Japan was forced to shut down all of its 50 nuclear power plants (By comparison, the US has about 100. Giving how small Japan is, the density of nuclear power plants in Japan is alarming!) According to a friend of mine who has been in the nuclear industry for 30 years, Japan’s nuclear power plants, which generated 30% of Japan’s electricity needs and was the third largest nuclear power producer, were woefully un-prepared for any nuclear disaster because none of Japan’s nuclear power plants were complied with the world nuclear operational standards. This forced Japan to import crude oils, condensate, and LNG from foreign countries, primarily Middle East countries, at a level around 4.6 million barrels per day; the third largest oil importer in the world after US and China. The net result is the historical current account surplus has changed to deficits and its implication is huge if the condition continues. In essence, Japan has changed from a net exporter of cars, machinery tools and high-end products to a net importer despite a 25% drop of Japanese yen’s value. It is not a good combination because a weakening yen will eventually affect the living standard of Japanese people as import prices rise. If export can take advantage of a weakening yen, the trouble to Japan’s economy has just turned to a more alarming stage. That being said, the higher importer may be cause by Japanese consumers hoarding goods before sales tax rise in April of 2014. We will address this in a later section.

U.S. standing in the world is falling fast December 5, 2013

Posted by hslu in China, Economics, Global Affair, Islam, Military, Muslim, Obama, Politics.
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The survey said it all (chart below from Pew Research.) It is sad to watch but it was inevitable. The US empire is heading into sunset with Obama leading the charge. The process will be slow and Chinese has a saying for it too: ”百足之虫,死而不僵.“

Source: Pew Research, December 3, 2013

Source: Pew Research Center, December 3, 2013

For almost seven decades since the end of WWII, the US has used two powerful weapons very effectively to bring other countries in line: US dollar and its military. it is still true but they have been less effective to say the least.

Don’t get me wrong, the United States still has a lot of money not because the US is the largest creditor in the world but because the US dollar is world’s reserve currency. Here the landscape is slowly changing and the US isn’t doing anything about it, yet: the US owes a lot of money to other countries and is running a trillion dollar or so deficit every year. Its $17 trillion dollar federal debt, unfunded liabilities and other government debts will break American tax payers’ back soon. In short, the US is broke and is fast running out of money to give it away.

The bigger problem is that the US dollar’s reserve currency status has been challenged by IMF and many other countries who don’t want to hold a currency with declining value. The push to move away from the US dollar as the world reserve currency is accelerating with IMF readies its Special Drawing Right (SDR) or some other form of currency to take place of the US dollar. Something will happen within the next decade and when it happens, the glory days of the US empire are numbered. it will be ugly. And whoever had assests in US dollar better be prepared for its demise.

America still has the most powerful and advanced weapons in the world. No other countries has any hope of over taking US’s leadership position any time soon. However, the lead is shrinking with Al Qaeda and related organizations regrouping in many parts of the world and China slowly building up its navy and air force in recent years. Many other countries, India, Pakistan, North Korea, etc. have their own nuclear arsenals too. Besides, where will the US going to come up with money to keep its lead in the never ending arm race? With more debt of course. But it can’t be sustained in the long run. Remember, America is broke.

America’s foreign policy is a mess.

Hillary didn’t do a lot other than taking expensive trips all over the world making speeches. Nothing of any significant consequence got done under her.

Obama drew a “red line” in the sand and warned Syria of grave consequence if it dared to cross it. Well, for a couple of years, Bashar al-Assad did it time and time again. Obama kept warning Assad but did nothing to stop him. Finally, Putin, among all foreign country leaders, came to the rescue and gave Obama a black eye for all Arab countries to see. Obama messed up on Arab Spring and didn’t know whom to back in Egypt and couldn’t even decide whether overthrowing its first elected president, president Morsi, by the military was a coup or not. Yet, foreign aid in the form of fighter jets and other weapons continued to flow to Egyptian military as we speak. The whole episode was simply comical.

Obama also projected an image of profound weakness in Benghazi where four Americans, including American Ambassador to Libya, were killed on September 11, 2012. There was talk of a video, justice for the dead, retaliation and finally a cover-up by the Obama administration, but nothing has happened either. It was all speeches and no action.

Then there was Snowden, the hijack and grounding of Bolivia president’s private airplane, the uproar against America throughout Latin America, Snowden’s one-year asylum in Russia thanks to Putin and the fall out from NSA’s monitoring of American citizens, world leaders and many other’s emails, social media activities and phone conversations. The worst of them all was the self-appointed human rights’ guardian, America, was totally exposed for its brazen disregard of other’s people’s privacy and human dignity. China has something for this too: 挂羊头卖狗肉。It is also called: 了无羞耻。The world now knows what America really is: a hypocrite. But it was a hypocrite with all kinds of weapons in its hands. 

Of course, we can’t ignore Iraq, Afghanistan and Iran. So many American soldiers died for Iraq but the US was chased out of Iraq. Iraqis simply didn’t want America in their country. Obama nonetheless learned his lesson from the failure in Iraq and is trying to keep some US soldiers in Afghanistan enticed with more US foreign aids. The decision was to come at the end of the year but Harmid Karzai wanted to delay it. 

Then there was Iran.

Kerry got Iran to talk and agree to curb its atomic activities in exchange for less sanctions. Yet, not much has changed because Iran insisted on continuing its uranium enrichment operation. Well, Iran certainly bought more time to work on a nuclear weapon and at the same time got the sanction monkey off its back. Kerry and Obama did well too: they took credit for contribute to peace in Middle East until one day Iran shows up with a nuclear weapon just like North Korea did under Clinton with the help of the worst American president in recent history: Carter. History probably will repeat itself and a war may be in the works. Well, what’s ironic with this whole thing was that many Democrats in Obama’s own party oppose the deal with Iran. We’ll just have to wait and see here.

And let’s not forget Israel since we are talking about Iran here. Contrary to all previous US presidents who have backed Israel in the past, Obama chose to isolate and humiliate Israel; I guessed, as a goodwill gesture to Arabs and Middle East countries. He definitely succeed in putting Israel in a precarious position and has truly demonstrated that he desperately wanted to be treated as a Muslim by other Arabs.

It appears that the US has very fewer friend in the world. Arabs don’t like the US other than its money and weapons. NSA has monitored Merkel’s cell phone for many years and Obama lied when he told her that he knew nothing about it. I don’t think Germans believed anything Obama said.Many European countries hate America because the Great Recession engineered by US Federal Reserve Bank, Wall Street, large US banks and many other financial institutions. The United States is solely responsible for the miseries many Europeans are facing now: 25% unemployment rate, five years recession in some countries, huge reduction is people’s living standards and massive destruction of people’s wealth, just to name a few.

Well, then there is Japan.

Japan is on the top of the list because the US is spending billions and billions of our tax dollars to defend the island country. Japan has to listen to the US because it has few military options. All Japanese leaders can do is to visit the Yasukuni Shrine which honors Japan’s war dead, including convicted war criminals and mass murderers from World War II. The US has to spend its own money to defend Japan because America bombed Japan with two atomic bombs during WWII. After achieving phenomenon economic growth in the 1980’s, Japan is currently in such a sorry state (The Lost decade,) primarily because of Plaza Accord engineered by America. Ever since that historical and unprecedented event in NYC, Japan took 20 years to sink its country into a debt hole so deep that it has no way to dig itself out of. For that, a generation of Japanese people have no one but America to thank for. What puzzles me was that Japan still call America a friend. Having a friend like this who was responsible for its demise for the past 20+ years, Japan doesn’t need an enemy at all.

Tension has been high in Eastern Pacific recently. The big question is this: Will US send its soldiers to fight for Japan over a few islands in the Pacific Ocean? Japan certainly likes that idea but I don’t think Americans are ready for another war after Iraq and Afghanistan. Besides, the US has almost ran out of money and time until the world decides to dump US dollar and go for something else. 

If that happens, anyone who holds American dollar will become poorer probably overnight and the once mighty empire will forever lose its glory.

Even though the show has just started, we already knew what the ending will look like.

History will repeat itself and we all knew it too well: Rome, Portugal, Spain, France and Great Britain.

The next one will be the United States.

 

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