Things are getting worse

29 Nov

I think that for the last year or so I have resisted overly criticizing the country of Japan. Its tough to find something to write about without crying or whining about it. I mean why write a series of lame rants about a system that is clearly broken ? Then again this is about deck chairs on a doomed ship.

So be it, the gloves are off

Mr Noda the current prime minister on the merry go round of obfuscation has gone public with his declaration that there will be a doubling of the national consumption tax.
From 5 to 10% !

This is over and above the state, city and plethora of other taxes foisted upon the public. In a nation already hurting this is not the way to rectify things. But wait dear reader it gets even better. 10% doesn’t even balance the expenditures. So after decades of mismanagement, graft, corruption and free spending ways the country of Japan is left with a record setting debt, deficit borrowing, lowered revenues and zero growth forecast as far as the eye can see. Sounds like a perfect time for a tax hike. Great idea.

I do give Mr Noda credit for taking his decision public rather than kicking the riceball to the next sucker err PM to take office.

The 10% boost is going to be spent on maintaining govt spending, not on reducing the record debt levels. More highways ? sure. Another bridge to nowhere ? great idea. Public projects in the red ? sign me up. Sigh…

And there is more

The electric companies already suffering from the atomic fiasco STILL HAPPENING in Fukushima have applied for and received a rate increase of 30%. Right before winter hits. Huzzah, more wonderful news 30% rate hikes just in time for Christmas. Further complicating things, TEPCO is unmanageable and in my opinion is guilty of criminal neglect. Stories of the cleanup workers using lead to cover up their exposure meters, the continuing steam venting into the environment, radioactive fish. All documented on sites such as tells me all I need to know. I wouldn’t say it was a planned conspiracy so much as incompetence.

For those of you who didn’t know, after the earthquake, tsunami and nuclear shitstorm Japan’s economy shifted from that of net exporter to net importer. This is mostly due to the large amounts of high priced energy shipped in to keep the big cities lit. But 30% ? Do they expect us to believe that they were losing that kind of money on every megawatt hour since the crisis ? And if so why did they wait until November ? I have given up trying to understand the mindset. 12 bells and all is well, full speed ahead and damn the torpedoes.

Electric provider miscues aside things are further complicated by the highly valued yen. The Governments well documented ostrich head in the sand financial strategy has resulted in the Japanese losing more of their market share to lower cost producers. This goes hand in hand with the fiasco bumbling of their foreign policy when it comes to the status of the islands claimed by both Nippon and China, but that’s a posting in itself.

The best part is the comedy that is the Prime Minster race. Noda who by most estimates will be replaced is out campaigning on his record, while the opposition LDP party selected Shinzo Abe a weak willed, somewhat tragic figure who quit due to health concerns during his first run as PM a number of years ago is now the “front runner”. This is the best Japan can do ? Seriously ? no really truly ? Huh ?

This front runner is now making statements such as an Inflation of 2% is the target and negative rate interest policy should be considered. ZIRP is bad enough, but NIRP ? While I am not a bean counter I don’t need to be when it comes to the math. Zero Hedge has it in plain black and white. Inflation will blow a hole in the side of the ship of state.

Default is inevitable, but we already knew that right ?


2 Responses to “Things are getting worse”

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