Turning Japanese? Turning Japanese? I really do think so.

That's why I'm turning Japanese
I think I'm turning Japanese
I really think so

I know I cannot be the first to use this analogy, but god bless new wave music & the 80's, for this apropos song. 

With so much attention being paid to the Eurozone, specifically Greece’s departure from it and 165% debt to GDP ratio in tote, its surprising to me that nobody in the MSM mentions the king of living beyond its means. This is none other than the spawn of American ingenuity and the benchmark that all post-war reconstructions whom are modeled after… Japan.

Japan’s ascension from rubble after WW2 to the world's third-largest economy has been staggering, especially for a country that’s about the size of the state of Montana. With a population that values education as much as anyone in the world, Japan has become a standard to many and no more than those in the corporate world, noted for their dedication to innovation and organization. But if you dig a little deeper, Japan and with all its glitz, glam & refined style; it isn’t all what it seems.

Because, like all fiat facilitated economies, the debt monster is alive and well and the only way to keep from getting swallowed up is to keep pushing, keep innovating and never, ever under any circumstance become stagnant. Well, at least over the last 20 years or so that’s been the case.

This is precisely what happened to Japan in the 1990’s known in Japan and around the world as Japan’s “lost decade”. When the NIKKEI started to free fall and real estate prices started to fall with it, those asset bubbles burst. This left the government in panic mode, so like all bureaucracies do in a panic, they did the opposite of what was right and did what was easy - threw money at it, instead of letting the natural correction run its course. 

They began to doll out stimulus after stimulus (sound familiar?), bailed out banks and insurance companies (getting warmer?) with the economy still limping along they said the hell with it and raised its consumption tax 2 percent (doesn’t this sound familiar too?) which subsequently brought on another recession.

After about two decades, and even with stimulus’s keep piling on, Japan’s economy finds itself in a ditch. Since 2011, the Bank of Japan has issued quantitative easing programs in excess of 900 billion alone. With very little to no growth potential, an aging population and an exponentially escalating debt tab; Japan is running on borrowed time. 

 

In a recent interview with Spiegel Online's Anne Seith, The Bank of Japan's governor, Masaaki Shirakawa said: "At the moment, the effect of our monetary policy in stimulating economic growth is very limited. The money is there, liquidity is abundant, interest rates are very low -- and, still, firms do not make use of accommodative financial conditions, the return on investment is too low."

Doesn't this sound eerily similar as well? 

Japan is currently using 25% of its outlays just to service their debt. If they raise interest rates, the number will climb dramatically. This is why the US is so fearful of raising its interests rates well. The FED wont entertain raising interest rates until 2014, so imagine all the cheap money printed off until then? If we are to raise interest rates where we already pay 220 billion on basically 0% what will it look like if those rates go up? As I pointed out back in March, via Kyle Bass, for every additional percentage point it will also bring about $140 Billion dollars on top of the existing 220 Billion.

  President's FY 2013 budget, Congressional Budget Office

Japan’s current debt to GDP ratio is currently 220% according to IMF reports for comparison’s sake the US debt to GDP ratio is about 102% (but that number has doubled in just four years). Japan however, unlike the US, has a few unique circumstances that will either prolong a slow death or escalate to their death at the speed of sound. 

Graph: zerohedge.com

Japan is one of the few countries that its public finances most of its debt (an astounding 95%). Thus, if they are comfortable with virtually no return on their investing (0.75% average return) into the debt and increasing inflation, they can literally keep financing their own debt as long as they don’t mind saving up to go to the grocery store as if it were a vacation.

The other option(s) is eye popping and absolutely lunacy to say the least. Newly elected Prime Minister Shinzo Abe wants the Bank of Japan to start issuing “unlimited easing” starting with a 120 billion dollar bullet into infrastructure. If that doesn’t get inflation where he sees fit and despite a declining Yen the threats coming out of Shinzo Abe’s mouth, will bring the death of Japan sooner rather than later.

In true, ancient Japanese kamikaze fashion, the Liberal Democrat Shinzo Abe with all his love for easing (hello Bernanke) is threatening to change the country’s laws and actually take the Bank of Japan over: read quite literally, socialization.  

So, as you can see, here in the US by all accounts, we are not Japanese yet. Although if we keep up this pace, follow the Japanese playbook and we look at the last four years as any indication; it should tell you it’s only a matter of time before we do.  

Piers Morgan: dont let the door hit you in the ass on the way out.

I was going do something on our out of control debt and the "looming" fiscal "cliff" but I was distracted reading this piece written by Piers Morgan of CNN published 12-29. The heading states he may deport himself if "America won't change its crazy gun laws". Now given such a heading filled with hyperbole you can expect the rest of his viewpoint will be littered with more attention whoring exaggerations and boy does he not disappoint. 

He starts out with his experience with guns. This, being a singular event, was a trip to Prague where he and some friends shot targets for a few hours and he said afterwards that the experience "quite demonstrably guns are killing machines".

I find that rather meaningless. For I, have never owned or shot a gun at any point in my life. I grew up in a single parent house with my mother and three sisters. Hunting is something I have never done either. But I don't have to hunt nor own a gun or to even have shot one to know guns are killing machines. After all, I have watched thousands of movies and played call of duty until the wee hours of the night (I’m just sticking with the meme). 

After setting up his "experience" he then proceeds to name drop his relatives who are employed in England with exposure to weapons as some type of twisted street cred:

"Well, I do know a bit about guns, actually. My brother’s a lieutenant colonel in the British Army and has served tours of duty in Northern Ireland, the Balkans, Iraq and Afghanistan. My sister married a colonel who trained Princes William and Harry at Sandhurst. My uncle was a major in the Green Howards."

I find this rather humorous. I have an Aunt & Uncle who both work in one of the biggest state universities in Pennsylvania in science. Both have their PHD's. I have three other Aunts who are teachers. I have a grandmother who retired with an MBA in accounting and a step father who has worked in a foundry for 35 years. I have a brother in law that is a barber. Do you know what i know about what they do?? Jack-shit. I would also find it disrespectful to assume that i know about what they do, in what, conversations over Sunday dinner at Nana & Papa's house? Please. 

 Mr Morgan demonstrates his arrogance and obvious agenda to make the world England when he uses the reasoning for owning the AR-15 Bushmaster (used in Newtown)  

"The only apparent reason anyone seems to offer up is that using such weapons is ‘fun’. One gun-rights guy I interviewed last week even said admiringly that the AR-15 was ‘the Ferrari of guns’."

When you see someone cite "One guy I interviewed" as backing you know to take that not with a grain of salt; but probably a quarry. Because the bullshit meter is broken. And if you say the "only apparent" reason "anyone" seems to offer up is 'fun' without any evidence, it just compounds the fact that you are basically making it up. What’s next, an "anonymous quote" from a “high ranking official” in the NRA doesn't “really like guns”? Wasn’t  'ol Piers an editor at a newspaper one time in England? 

Well, that doesn't surprise me. Have you ever read a newspaper from England? Look at the link for his piece; it’s plastered in 'tabloid-celebrity' nonsense. Hard news does not exist over there. How do I know? The paper 'has ads for other story's'. It 'apparently' must be devoid of hard news because I cant find a paper in England that doesn't cater to 'tabloid-celebrity' nonsense... see this subjective, make it up as see fit game can be fun and effective!

So, we have established Mr. Morgan's experience and his relatives with guns are bunk or meaningless to the discussion and probably just a cheap way to fill a word count commitment. We also know he has no reasons why people own guns, other than he says, they said: 'its fun'. So there is no opposite side in this piece with relative viewpoints, just his opinions.

Pictured in this article is a picture of a gun show. It also has statistics with gun sales exploding after these last few instances. It has a picture of a man at a gun show holding an AR-15. There is also the statistics that Americans own more guns per person than anywhere in the world outside of Yemen. Do you see the link? These gun sales are going to create more crime. But is that really true? 

According to the 1997 Survey of State Prison Inmates, among those possessing a gun, the source of the gun was from -

• a flea market or gun show for fewer than 2%
• a retail store or pawnshop for about 12%
• family, friends, a street buy, or an illegal source for 80%     

During the offense that brought those offenders to prison, 15% of State inmates and 13% of Federal inmates carried a handgun, and about 2%, a military-style semiautomatic gun.

This whole piece written by Mr. Morgan is centered on the use of semi-automatic weapons. So we are talking about 2% of felons using these types of guns. Two must be the magic number because only 2% of felons using a gun - get said gun, at a flea market or gun show. Talk about living on the margins? Maybe Mr. Morgan should spend some time in Switzerland where households pack fully automatic rifles and experience less crime than England, where he says there are only 35 deaths per year due to handguns.

Which I find odd considering this article written in the Wall Street Journal the day after Christmas by Joyce Lee Malcolm, a professor of law at George Mason University Law School - who has written several books on the subject including: "Guns and Violence: The English Experience" 

In this article Ms Joyce points out that: 

"Within a decade of the handgun ban and the confiscation of handguns from registered owners, crime with handguns had doubled according to British government crime reports. Gun crime, not a serious problem in the past, now is. Armed street gangs have some British police carrying guns for the first time. Moreover, another massacre occurred in June 2010. Derrick Bird, a taxi driver in Cumbria, shot his brother and a colleague then drove off through rural villages killing 12 people and injuring 11 more before killing himself."

 

If that wasn't enough Mr. Morgan points to a recent Gallup poll showing that: "58 per cent of Americans now support new gun-control laws, up from 43 per cent in 2011" He then says "that's a big jump"? 

You think? Does he even understand that his network is one of many that help perpetuate these acts by these deranged nut jobs and fears of the public by sensationalizing them at every waking minute to push their filthy ads? Mr. Morgan even takes aim at video games and movies... does he have no culpability in this? No of course not, because you're on television, dummy. Sixty million people watch you every night of the week, Monday through Friday. You make the news. You're God. 

Now allow me to weave this all together all nice and tight for you, using Mr. Morgan’s own words:

"This gun debate is an ongoing war of verbal attrition in America – and I’m just the latest target, the advantage to the gun lobbyists being that I’m British, a breed of human being who burned down the White House in 1814 and had to be forcefully deported en masse, as no American will ever be allowed to forget – Special Relationship notwithstanding. It’s no exaggeration to say that America’s unique fondness for guns pretty much got cemented by hatred of us Brits and the War of Independence. But the main reason the more fervent gun-rights activists give is a fear of their own US federal government using its army to impinge on their freedom"

Americans don't hate British citizens or look at them with disdain nor reject them simply because of their birthrights. We do have a problem thou with someone from another country telling us how we should change our laws and be more like the country that we fought from our independence from some 200+ years ago. Americans had to use guns to fight off tyranny in the form of the British government. Now you supported using guns to fight tyranny before:

" I’m not a pacifist. Guns win necessary wars and defeat tyrannical regimes like the Nazis"

I find it ironic you do not see the British government circa 1770 a "tyrannical" government. We agree the Nazi regime was just that. This, being the same Nazi regime that took the US and her (gun loving) involvement to keep England from being bombed into oblivion? You know what they say about history don't you, Mr Morgan? If its written by the victors and while we know who won WW2 and the Revolutionary War; maybe you're in need of a history lesson, chap?

Now i saved the best for last:

"Obama should follow up by launching a Government buy-back for all existing assault weapons in circulation (as worked successfully in Los Angeles last week). I would go further, confiscating the rest and enforcing tough prison sentences on those who still insist on keeping one. He should also significantly increase federal funding for mental health treatment for all Americans who need it."

Piers... lets scrap the history lesson, instead lets do a real quick American Civics primer. "He" is just a President, nothing more than a mouth piece for the corporate elite, like the guy before him and the guy before him and the guy after him and so on and so forth. We may elect lackeys and "yes men" but we don't elect Kings. Here all men are created equal; we don't value one person’s blood more than another.

You claim to "love" this country, despite the fact that it’s obvious you don't understand our financial situation as you are directing for "King Obama" to start "buy backs" and additional spending of revenue via mental health (has he not heard of Obama Care), when we are facing two trillion dollar deficits annually. You don't respect our history or even understand it. You want prisons sentences for people wanting to uphold their Bill of Rights. Your views are based on fringe ideas and failed data from England, the country you left - to obviously pursue something better for you and your family. 


 Let me offer you some parting advice courtesy of one, Mahatma Gandhi:

"Among the many misdeeds of the British rule in India, history will look upon the act depriving a whole nation of arms as the blackest."(Gandhi, An Autobiography, p. 446 Beacon Press paperback edition)