THE AGE OF PREDICTABILITY: Trump, the Japanese, and George Osborne

predictable

One of the reasons contemporary life is so interminably boring is the sheer predictability of it all, alongside frustration at the inability of the average elector to hear the truck as it careens down the road towards them.

Donald Trump yesterday told his disciples that “the UK and Europe are weak, and it is no longer safe to travel there”.

So this is how it works: the US foments six wars in a row for its own corrupt energy purposes. It creates 1.5 million migrants, and then passes a law in Congress saying it doesn’t want any of them. One of America’s allies Turkey then takes advantage of the situation to send the EU 350,000 young Islamic hoodlum males, and that makes the plight of refugees worse still. Somewhere along the line there are attacks in Paris and Belgium, so with the EU economy already flatlining (and both the ECB and Greece labouring under the unsustainable debt demands of largely US-born vulture fund managers) a Presidential candidate helps ruin the tourist economy by saying “Don’t travel to Europe, it’s unsafe”. The other candidate refuses to refute the statement, although as Secretary of State she was more responsible than most for the mess.

And that, my friends, is The Special Relationship. Worse still, in a quantitative research study last year, 73% of Brits said they thought the USA “by far our best ally”. With allies like these etc etc.

strstripe  strstripe strstripe

And the tediously predictable continues. My father (who spent three years fighting the Japanese) always maintained they represented the oddest, most sado-masochistic and heartless cuture he’d ever come across. It’s a view with which the likes of Clive James and Russell Braddon concurred throughout their lives, having ‘enjoyed’ the Japanese experience whether they liked it or not. There’s also a clue to the Sons of Nippon in that Jeremy Rhyminge-Slang thinks they’re A1. Which, let’s face it, he would. I also have a delightful Filipino chumette who wouldn’t hurt a fly, but has never been known to utter a nice word about them…and this has been my experience with every non-Japanese Asiatic I’ve known.

The suspicion that the Japanese lean towards madness in various ways was for me finally borne out by the BoJ’s decision just before Christmas 2015 to adopt negative interest rates.

The idea of negative rates is insane no matter what the scenario; but in the context of Japan being by far the most indebted country in the world – and thus needing to borrow with new bonds all the time just to service the debts they’ve already run up, which is unreasonably bonkers in its own right – the decision could only ever spawn children madder than the offspring of Lizzie Borden* and Jack the Ripper.

In early January, I made two Page One points:

  1. If the Japanese consumer won’t spend with Zirp and QE in play, it’s clearly a matter of confidence, not affordability; and
  2. is anyone really mad enough to lend the most underwater nation on the planet money and also accept having to pay for such a great privilege?

Thus far, 1 above has been borne out. But as for 2, so bedazzled by monetarism is some of the daft money out there, the BoJ decision was obviously seen as a wise one, because these saps poured money into what was now the new safe haven.

So not only has Nip-Nirp not stimulated the Japanese consumer, it has strengthened the Yen – the diametric opposite of what was intended.

But now, we are but two working days away from April, and the math-heads at Bloomberg say 70% of all Japanese debt bonds will be issued in 2016 with a “negative return” – or what real folks call “a cost”.

Is it me? The question is not entirely rhetorical: if your wealth managers told you they were investing in a reduction of  your capital because it was ‘safe’, would you not ask “Safer than what….having it all confiscated?”

But therein lies another tale, and my point remains the same: once the mainstream, Mount Rushmore-nosed lenders are the ones being offered this option, my common sense dictates that they must say NO. The truth here – surely – is that none of the advantages of Nirp have materialised, and the downside is worse than the BoJ ever imagined…although not The Slog – a pesky amateur living on his wits and means in rural France: and that thought in itself is absolutely terrifying…not least to me. I keep praying that somebody out there knows whatTF they’re doing.

So now what? Various scenarios present themselves: rather than lose face, the BoJ starts printing frantically to manage the debt, and heads down the road towards hyperinflation; or it stays in denial, and sees the compound interest condemn it to default no matter what it does; or the entire lending sector goes tonto, the Yen collapses, suddenly you can buy the entirety of Hokkaido for 7p….and with one mighty bound, Japan becomes a cheaper place to live than Zimbabwe.

And if you believe that, you’ll believe etc etc

japflag japflag japflag

 Finally, we must not forget the most predictable Dweeb in Camerlot after Jeremy Shunt. I refer of course to the Chancellor…who, experts in Budget-drilling now tell us, is lumbering more than six million workers with an NI stealth tax.

‘The new system, which will see millions of workers paying more tax through increased national insurance contributions, is expected to net the Treasury £5.5 billion a year’ the right wing Daily Telegraph revealed today.

It isn’t enough any more to think of Nobsore as “a piece of work”. He is a man determined to bring back the piece-work system that pertained among dockers in the 1930s…and made them so militant ever after. And this is of course a mere staging post (in his recreationally reorganised head) on the way towards we peasants being executed for poaching the King’s deer.

Rarely has any British politician been so out of touch with the electorate as this supremacist idiot – whose sole claim to supremacy is that he is the Supreme Leader of the Etonian economic model….38-22-34, with a vacuum between its ears.

* Lizzie Borden was an axe wielder who killed her Mum & Dad

Yesterday at The Slog: Why the EU is a war-magnet not a peacekeeper

23 thoughts on “THE AGE OF PREDICTABILITY: Trump, the Japanese, and George Osborne

  1. There will not be any change , untill this system goes down the pan. And people wake up and say what the f..ks happening,
    By then most of them will literally be f..ked.

    Liked by 1 person

  2. ” …. we peasants being executed for poaching the King’s deer.”

    You forgot being crucified for shooting / eating the Queen s swans.

    Also re Japan ; what you discount from your rationale is that most JGB s are held
    by the indigenous population who will ” go to the wall” as Diand Abbott would say , for
    ,the furtherance of the mother country — vide the suicide pilots in WWII. What s loyally
    sinking your life savings into some
    rancid junk bonds compared to sinking your plane into the funnel of a ship !!

    Like

  3. I thought the point of negative interest rates was to signal that the currency will be worth more some time in the future. So even if you have to pay 1%, your effective rate of return (as measured by what the unit will buy) will be positive.
    In theory, anyway.
    Central bank ponzi-scam fiat money needs a way of unwinding without a complete smash.

    Like

  4. I read your articles regularly. But there are some days when your words drive me to despair. Is it alright if, having turned on and tuned in, I now drop out — and grab another glass of wine?

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  5. Take the Japanese components out of your motorcar and it won’t start.

    Take the Japanese components out of any high-speed optical communications network and it won’t function.

    Take the Japanese components out of the newest Boeing aircraft and it’ll sit on the ground and cry tears of aviation fuel.

    What’s more, nobody else can make these components.

    The Japanese also want the US media to believe they’re in trouble… so don’t believe what you’re told in the Mainstream News!!!

    Liked by 1 person

  6. Bash away at Uncle Sam John and give the Japanese what for but for this American some of my happiest days were flying the 777 out of Chicago. At the time we flew the aircraft to only two destinations London and Tokyo and what great places they were to visit!. I am planing a trip to Japan and I can’t wait to get going.. I have no fear of visiting Europe.

    Trump is a blabber mouth don’t even bother listening to him.
    .

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  7. The Japanese followed Orwell’s version of hell, Osborne seems to want to emulate Dickens, without the warmth of the factory owners toward their chattel.

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  8. The Pied Pauper of Hambro, and his ilk, are leading us down a rabbit hole where the vanguard are still digging furiously, and the rearguard are arming themselves to the teeth and beyond to ensure nobody turns back. The exits from the burrow have not been ‘netted’ because there is no need – the grass has already been consumed so voraciously that a wasteland is all that remains. We can only hope the farmer runs out of ammunition soon (and the ferrets change sides) or else bunny money will be the only trade. Sticking together as rabbit glue is not a safe option for obvious reasons.

    Liked by 1 person

  9. Budget drillers also report that George Osborne’s budget is handing a tax cut averaging £3,000 to some of the wealthiest people in the country who make up just 0.3% of the population.
    All together now:-
    ‘We’re all in it together…….

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  10. Can never understand why 4* ex-secretary general of NATO General Wesley Clark who comes away with the following
    “www.youtube.com/watch?v=9RC1Mepk_Sw” ( it’s in “” to stop it embedding just cut and paste to see it)
    is not being listened to more intently , and has anybody ever seen or heard his comments anywhere apart from YouTube.

    It certainly explains the wars in the middle east and lays them at the USA/Israel doorstep.

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  11. @Pythia

    “Central bank ponzi-scam fiat money needs a way of unwinding without a complete smash.”

    Not possible unless you have the money to pay the debt which we and neither do any country like the BOJ. Look at it from this point of view “all nations borrow to fund their consumptive economies” but no matter what they do they end up in debt because the money is always borrowed. You do not make a debt free economy by borrowing more money and it is exactly the way Osborne is operating.

    Now go find some money that has come into being without being borrowed … think rocking horse s$%t.

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  12. the american rubblizing wars that we are having to endure are part of the USA thrashing about as they drown in debt. they will grab anybody or thing that still stands and aim to stop themselves drowning by getting on top of them.. so from their point of view , having trashed most things in our world, there is only russia and china left…. and the Small nuclear devices..

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  13. Change won’t happen until the shareholder becomes the stakeholder. Could happen in 3 moves shareholder, shaleholder, shakeholder, stakeholder?

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  14. Trump Is the only candidate who is even trying to stop this deeper into debt ,madness that is going on. The truth is that the banksters those who hold the end of the string of I O U’s are going to have to accept a haircut, a restructuring. Taking peoples jobs and homes and driving them into the streets will not get people to spend more. The madness of the Greek “solution” cannot be forced onto 350 million Americans, most of us very heavily armed..
    So we are going with Trump and a new deal. We don’t care if the Banksters like it.or not. If they want to keep breathing they will take it. As for you yu ro pee ons since most of you have apparently decided that you are going to let everybody, the politicians the immigrants, loud mouth stupid women, etc, etc, etc, pee on you whenever they feel like it we crude Americans have only one bit of advice. grow a pair. learn how to say the word NO and to back it up. Padded jackets bike helmets gas masks and a short hunk of Iron bar will help you say NO more effectively. Or you can have more wonderful experiences like Paris and Brussels and well, golly me, just about every Euro PEE ON city has been having lately.

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  15. I run Kubota excavator and tractor (Japanese) , it is undeniably good kit. Sad about their politicians but you could ditto that for 3/4 of the world.

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  16. “and heads down the road towards hyperinflation; ”

    Silly statements like this destroys your credibility on this subject. You need to let go all you believe about this subject and start again. Deflation is the bigger concern with Japan. And even if they printed money it will never cause hyper inflation with an aging population keen to save not spend who will willingly buy all the bonds that Japan issue (hence the ridiculous negative interest rates).

    Japan does NOT borrow money. It simply create new money (reserves) when it deficits spends and drains this new money when they issue bonds. Unlike the Euro countries that are no longer monetary sovereign. They do need to borrow money at the market determined interest rates. Japan, the UK & US, Russia, NZ Aust do not. they ahev all the pwoer not the banks or markets. But pretend otherwise.

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  17. “Trump Is the only candidate who is even trying to stop this deeper into debt ,madness that is going on”

    It’s not madness. It’s essential to stop the West collapsing. Debt backs our saving needs. And where do you think collective company profits come from. Maybe in large part from increasing debt. So no increasing debt = no more collective saving and no collective company profits = a massive depression. Guaranteed.

    Stop using beliefs relevant to a young growing economy to old mature ones.

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  18. rjwisdom so one side of the equation must always live in purgatory to pay for the profits of the other,that will & has created this depression and is unsustainable!

    Liked by 1 person

  19. The ghost

    No monetary sovereign Govts create money (reserves) out of thin air. Just like the banks do. where do you think all of this extra money comes from. Monetary sovereign Govts can create reserves as required when required. They create them to support the banks bank credit.

    So we have a choice. Either the UK Govt (and other western Govt’s around the world) do the required journal entries to fund an ongoing deficit. That will fund essential spending like building homes & hospitals, helping the poor to live etc. Or we fall into a huge totally unnecessary depression because of an irrational fear of Govt doing journal entries. To create reserves or bonds.

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  20. rjwisdom putting a figure on onside of the argument to balance what as been created on the other side without it ever reaching the other side of the equation in reality,is the reason depression is on one side, is happening and bubble assets on the other side are,otherwise bubble assets couldn’t form!

    Like

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