“This week, Tokyo’s central bankers rediscovered a modicum of their old mojo,” The Financial Times told the world on Wednesday. Typically, the FT reports the dialogue correctly but misunderstands the plot action. But we can correct the sentence with a single capital letter. For what they really discovered was a modicum of their old Tojo.
Japan’s Co-Prosperity Sphere expanded greatly in the ’30s, as the Imperial army marched through Asia. But as its supply lines stretched, Japan became more and more vulnerable to interdiction by the US navy. Rather than restrain its ambitions, Tojo Hideki bombed Pearl Harbor.
One of the eternal puzzles of history is why smart people do such silly and stupid things. We have no answer, but we’re happy to see the Central Bank of Japan, the US Federal Reserve and the European Central Bank swing into action. It should be entertaining. Bankers tend to be boring, prudent and cautious. They hold their pants up with belts and suspenders too. “On one hand this…on the other hand that…” they say, hedging their bets. And every one of them has two arms! What a delight to see these timid pedants take decisive, bold and foolhardy action.
Japan’s economy has been taking on water for the last 20 years. They must be getting tired of it. In the heavy seas following the crash in 1980, they flung out life preservers to its businesses, heaved aboard thousands of soaked enterprises and submerged banks, flushed the seawater out of their lungs, and crowded them onto the lower decks. Then, Japan used all its monetary and fiscal tools to keep the boat above water – including quantitative easing, QE. While the economy never fully recovered, neither did it sink.
In the West, the storm blew up only 3 years ago. Lehman went down. Trillions of dollars worth of assets were washed overboard. But tempest-toss’d and weary, the great ship of modern, degenerate, state-managed capitalism is still bobbing up and down…kept afloat – as in Japan – by pumps and chumps.
And now, their barks riding lower in the water than ever, the admirals grow desperate. The Japanese have vowed to use their QE more aggressively. The amount pledged so far – $60 billion – is trivial. But they say they’re going to target a wider range of financial assets…drive the key lending rate even closer to zero…and keep at it until deflation is defeated. The ECB is committed to spend $63 billion on QE too. It was forced to spend $1.4 billion of it last week to buoy up poor little Ireland, which is in danger of slipping beneath the Atlantic waves at any minute. And Ben Bernanke has told America that it should expect a more muscular approach to QE after the Fed meets on November 2nd.
“Central banks open spigot,” proclaimed The Wall Street Journal.
What else could they do? They think they face a choice: it’s the devil or the deep, blue sea.
The politicians didn’t hesitate for a minute. They passed their stimulus bills in a panic. And now they claim success. Steven Rattner, former advisor to the US Treasury secretary, argued in the FT that TARP “did more to keep America’s financial system – and therefore its economy – functioning than any passed since the 1930s.” Were it not for TARP, he says, AIG, Citigroup and Bank of America would have certainly sunk. Maybe GM and Chrysler too. And the recession would have “spiraled downward.”
Maybe he’s right about that. Even so, it seems like a small price to pay. Besides, how do Rattner, Geithner, Bernanke et al know who should survive and who shouldn’t? The trouble with degenerate, state-managed capitalism is that it lets politicians and policy makers decide these things. Why should a bank survive if it can’t weather a foreseeable storm? Why should an automaker stay in business if it can’t make cars at a profit? Why can’t willing buyers and sellers decide these things for themselves? That’s just how it’s supposed to work. It blows up gusts from time to time and sinks the unworthy and the unprepared. That’s what the deep, blue sea was made for.
But the interveners are neither poets nor philosophers. They’re men of action. In Japan, there is little room for more fiscal stimulus. Japan’s government already owes twice the nation’s GDP. In Europe, the big spenders cannot overcome opposition from the tightwad Germans. The Americans are blocked by politics too. Voters rarely have any idea what is going on. But the TARP plan – which just expired on Sunday – was seen for what it was, a payoff to the bankers at everyone else’s expense.
“You can take your stimulus and shove it,” is the message being sent to the US Congress.
Not only that, the paralysis in Congress could prevent an extension of Bush’s tax cuts. This will be the equivalent of raising taxes during a recession, a repeat of the mistake of 1937, when Roosevelt’s pact with the devil led to higher taxes, more regulation and trade barriers.
Everyone claims to favor the democratic process, but few people want to abide the decisions of the yahoo masses. Fewer still will put up with an honest economy. So, it’s up to the central bankers. Bonzai!
Bill Bonnerfor The Daily Reckoning
Since founding Agora Inc. in 1979, Bill Bonner has found success in numerous industries. His unique writing style, philanthropic undertakings and preservationist activities have been recognized by some of America's most respected authorities. With his friend and colleague Addison Wiggin, he co-founded The Daily Reckoning in 1999, and together they co-wrote the New York Times best-selling books Financial Reckoning Day and Empire of Debt. His other works include Mobs, Messiahs and Markets (with Lila Rajiva), Dice Have No Memory, and most recently, Hormegeddon: How Too Much of a Good Thing Leads to Disaster. His most recent project is The Bill Bonner Letter.
Would US now repeats the WW II Japanese drama?
I think we should skip all the interventions in the price of money. Instead, why not follow the lead of the Russians after the collapse of the Soviet Union: –“whatever home, house, or apartment you now occupy, which hitherto was Soviet state property, is now yours free and clear”. really wouldn’t be much different here, the government owns most of the mortgages. Simply handing over title would eliminate all that debt dragging on the economy. Sure, there would be some privately held mortgage owners who would get skewered on the deal, but does anyone really sympathize with them? Hardly. Most of them have so much money stashed in the Cayman Islands its not like it will affect their standard of living.
To get our economy on the right track, we need a decisive President who will do the right thing by reducing our bloated government by 50%…some lay offs but mostly by attrition.
Close all the US Military basis overseas and bring our troops home. We must stop being the policeman of the world, let the UN do their job of
We must stop spending and start paying off our National Debt before we go bankrupt, when our revenues exceed our interest payment, our Republic will go Kaput, and that will reverberate around the world.
We need a business man in the White House…
Leo…Santa Rosa, Ca.
The US is already bankrupt. We’re just waiting for another liquidity crisis.
The Soviet Collapse, though it did give folks their houses, created a litany of other problems. When you screw creditors people don’t line up to lend more money, at least not right away. And when you don’t have access to credit lines life gets uncomfortable very quickly… like getting fuel at a gas station or food from a store (because the farmers cannot afford to bring you said food). Yikes.
The bankers, as always, play their masterful money game. Head I win, tail you lose. Get my drift?
The central banker, as always, play their masterful money game too. But of a different sort. Since they can create money out of zilch, what excite them is not having money. It’s power. The ultimate high is power over the elected officials. They continue to play the power game until the country collapses.
At which time the central banker just kick the can down to the next store. Which is always the brass store. The generals waiting quietly for their moment. Which comes when everybody is ready for revolution and civil war. And which the generals will offer to save the nation by avoiding in-fighting. and by engaging in foreign wars. An invasion here and there does wonders.
That, my friend, is the real Tojo Moment.
Pingback: RKXeroFlGi RKXeroFlGi
Pingback: online chat rooms
Pingback: Cash Fast Loan Military
Pingback: Best Vine Marketing
Pingback: Click Here
Pingback: Information About eliquid and ecigs www.era3ecigs.co.uk
Pingback: Visit Website
Pingback: Jasa SEO Murah
Pingback: carmichal moore
Pingback: Daisy Suites
Pingback: casino ohne einzahlung
Pingback: Check This
Pingback: erotines prekes
Pingback: search engine
Pingback: Pulau Tidung
Pingback: buy silver coins cheap
Pingback: sell used car to dealer boston
Pingback: seguros en merida
Pingback: Fresh Interactive, Inc
Pingback: vending machines for sale
Pingback: beylikdüzü escort
Pingback: Click that
Pingback: easwar elumalai mugshot
Pingback: Upfront Repuations
Pingback: Edwin Dixie
Pingback: logan airport transportation
Pingback: 100 edu +100 high pr backlinks for $1
Pingback: My Shape Lipo Reviews
Pingback: paintless dent repair training
Pingback: imp source
Pingback: Homes for Sale Edmonton
Pingback: laptop repair dallas
Pingback: istanbul property
Pingback: Real Estate Law Center
Pingback: click here
Pingback: pure raspberry ketones
Pingback: e cig free shipping
Pingback: best solar charger
Pingback: Iesha Peagler
Pingback: Jospeh Letsinger
Pingback: Miami dui attorney
Pingback: Morgan Landero
Pingback: abogados almeria
Pingback: Yuko Brozovich
Pingback: Check this website
Pingback: real estate law center complaints
Pingback: buy likes for facebook
Pingback: vpn sofware
Pingback: Tanner Vaughn
Pingback: alyssa milano fotos
Pingback: metbis forum
Pingback: skup zlota
Pingback: how to get likes on your profile picture
Pingback: hard drive recovery singapore
Pingback: How To Become Wealthy
Pingback: payday loans dadschips
Pingback: darmowy bonus bez depozytu casino
Pingback: facebook like buy
Pingback: buy facebook picture likes
Pingback: facebook photo likes
Pingback: e cigarette starter kit free
Pingback: buy facebook votes
Pingback: buying facebook likes
Pingback: buy 100 facebook photo likes
Pingback: exchange back-links .
Pingback: real estate law center scam
Pingback: tonos isocronicos
Pingback: buy 1000 twitter followers
Pingback: surrogacy Agency
Pingback: make money online opportunity
Pingback: phone tracker for iphone
Pingback: traders insurance
Pingback: house energy rating
Pingback: Tommy Middaugh
Pingback: temperature mexico
Pingback: Carpet Cleaning Utah
Pingback: comprar fans en facebook
Pingback: przeprowadzka to uk
Pingback: Jugos para bajar de peso
Pingback: seo orange county
Pingback: pittsburgh web design
Pingback: buy soundcloud follower
Pingback: paintless dent repair
Pingback: How To Conceive A Girl
Pingback: pure garcinia cambogia side effects
Pingback: garcinia cambogia extract dr.oz
Pingback: compare flight prices
Pingback: buy followers
Pingback: instant payday network
Pingback: Highster Mobile review
Pingback: make money online fast
Pingback: divergente pelicula trailer
Pingback: fat loss cleanse
Pingback: watch video
Pingback: Hope 4 home reviews
Pingback: get soundcloud comments
Pingback: List of top paid per download
Pingback: car stereo help
Pingback: how to get rid of skin tags yourself
Pingback: wybierz rybe
Pingback: tired eyes
Pingback: SEO Consultant Orange County
Pingback: my website
Pingback: buy targeted traffic
Pingback: rs 2007 power leveling
Pingback: what is a solo ad
Pingback: Safest Online Dating Site
Pingback: more information
Pingback: view more
Pingback: optimizare seo
Pingback: mobile spy review
Pingback: eq2 power leveling
Pingback: chris webster global system solutions
Pingback: RaiderZ GP
Pingback: Breast Actives review
Pingback: marvel hero power leveling
Pingback: Consumer Advocate Services
Pingback: buy real facebook
Pingback: diablo 3 power leveling
Pingback: Courthouse News Service
Pingback: runescape power leveling
Pingback: followers on facebook
Pingback: music promotion for soundcloud artists
Pingback: runescape 3 gold
Pingback: matcha green tea powder
Pingback: guild wars 2 gold eu
Pingback: social bookmarking sites
Pingback: social bookmarking seo
Pingback: social bookmarking list
Pingback: social bookmarking sites for business
Pingback: locksmith seattle downtown
Pingback: instagram followers
Pingback: locksmith in seattle wa
Pingback: seattle locksmith
Pingback: archeage power leveling
Pingback: path of exile power leveling
Pingback: lotro power leveling
Pingback: Defiance Power Leveling
Pingback: diablo 3 gold asia
Pingback: Elder Scrolls Online Power Leveling
Pingback: locksmith seattle
Pingback: runescape 3 power leveling
Pingback: archeage gold
Pingback: AION Power Leveling
Pingback: fut 14 coins ps3
Pingback: path of exile power leveli
Pingback: Age of WuShu Liang
Pingback: klicken Sie hier
Pingback: wow power leveling
Pingback: fifa 14 Coins
Pingback: KAL Online Geon
Pingback: Blade and Soul Power Leveling
Pingback: runescape 2007 gold
Pingback: ãƒ¬ãƒƒãƒ‰ã‚¹ãƒˆãƒ¼ãƒ³ è‚²æˆä»£è¡Œ
Pingback: Diablo 3 è‚²æˆä»£è¡Œ
Pingback: diablo 3 gold hardcore eu
Pingback: AION è‚²æˆä»£è¡Œ
Pingback: ãƒ©ã‚¹ãƒ†ã‚£ãƒãƒ¼ãƒ„ è‚²æˆä»£è¡Œ
Pingback: ãƒ©ã‚°ãƒŠãƒã‚¯ã‚ªãƒ³ãƒ©ã‚¤ãƒ³ è‚²æˆä»£è¡Œ
Pingback: TERA è‚²æˆä»£è¡Œ
Pingback: ãƒ‰ãƒ©ã‚´ãƒ³ãƒã‚¹ãƒˆ è‚²æˆä»£è¡Œ
Pingback: æˆ¦å›½ixa è‚²æˆä»£è¡Œ
Pingback: ä¿¡é•·ã®é‡Žæœ› è‚²æˆä»£è¡Œ
Pingback: fut 14 coins pc
Pingback: FF14 è‚²æˆä»£è¡Œ
Pingback: FF11 è‚²æˆä»£è¡Œ
Pingback: çœŸãƒ»ä¸‰åœ‹ç„¡åŒ è‚²æˆä»£è¡Œ
Pingback: boundra è‚²æˆä»£è¡Œ
Pingback: PSO2 è‚²æˆä»£è¡Œ
Pingback: Wizardry è‚²æˆä»£è¡Œ
Pingback: FFXIV è‚²æˆä»£è¡Œ
Pingback: FFXI è‚²æˆä»£è¡Œ
Pingback: ãƒ‰ãƒ©ã‚¯ã‚¨10 è‚²æˆä»£è¡Œ
Pingback: ArcheAge è‚²æˆä»£è¡Œ
Pingback: Diablo 3 RMT
Pingback: æˆ¦å›½ãƒ†ãƒ³ã‚«ãƒˆãƒªã‚¬ãƒ¼ è‚²æˆä»£è¡Œ
Pingback: ãƒ‰ãƒ©ã‚´ãƒ³ã‚¯ã‚¨ã‚¹ãƒˆX è‚²æˆä»£è¡Œ
Pingback: FF14 RMT
Pingback: ãƒ©ã‚¹ãƒ†ã‚£ãƒãƒ¼ãƒ„ RMT
Pingback: ãƒ‰ãƒ©ã‚´ãƒ³ã‚¯ã‚¨ã‚¹ãƒˆX RMT
Pingback: èˆžç¿”ä¼ ã‚´ãƒ¼ãƒ«ãƒ‰
Pingback: ArcheAge ã‚´ãƒ¼ãƒ«ãƒ‰
Pingback: Neverwinter Astral Diamonds
Pingback: hip hop beats
Government life support…liquidity injection… or a giant Band-Aid…whatever you want to call it, quantitative easing is the keeping the global economic ship afloat – but for how much longer? Richard Duncan explores…
Ben Bernanke introduced the world to the concept of "quantitative easing" back in 2002. It was an "unorthodox plan" to save the economy from the horrors of deflation. But the monstrous economy it has actually created is in some ways far worse. And as Richard Duncan explains, it's not going to end any time soon. Read on..
While the technical details of Bitcoin may intimidate the novice, they shouldn’t keep him from getting in on a digital currency revolution that -- while taking different forms -- isn’t going away. How do you get the simplest, easiest-to-act-on tips about how to invest, safeguard and grow your digital wealth? Dominic Frisby has more…
The duality is stark. In one hand, we have an energy renaissance underway, in the other, a virus is threatening to wreak havoc on the markets and, potentially, your life. Nothing we’re currently doing to fight the Ebola virus will work in 2014, say the researchers. Nothing we’re currently doing will beat it in 2015, either. We need a new game-plan. Read on…
Lose your shirt in 3D printing stocks this year? Don’t kick yourself. You’re not alone. (Okay, kick yourself a little if it’ll make you feel better.) You need to make sure you don’t lose your 3D-printed shirt in the next tech craze. Because there will be a next time. Look, it’s really not your fault if you got taken for a ride on 3D stocks. Greg Guenthner has more...