The elections in France and Greece have not turned out the way the EU bureaucrats and banks throughout the world wanted. It seems that the average voter has had enough of sacrificing for the financial and political elite.
Japan’s Nikkei 225 average is down over 2.5% for the morning session and the Yen/Dollar exchange has fallen below 80, this despite the Bank of Japan’s considerable easing meant to weaken the Yen. Today’s headlines on Nikkei.com tell the story of the deterioration of the Japanese economy.
- Employee Pension Fund System Faces Crisis Of Confidence
- M’bishi Motors To Cut Main Plant Output By 20%
- Stream Of Large Office Buildings In Tokyo To Let Up After ’12
- Dai Nippon Printing Hits ’12 Low On FY11 Net Loss
- Nissan Falls On U.S. Losses, Rise Of Yen
- Big Retailers, Manufacturers Struggle To Boost Online Sales
- Summer Bonuses Could Fall To Post-Bubble Low
- Fast Retailing Opens Ask-Only As Japan Sales Slide
- Nikkei Hits 3-Month Low In Morning On Political Uncertainties In Europe
- Sharp Hits Lowest Since ’80 On Earnings Concerns
- DeNA, Gree Go Limit-Down On Possible Legal Violation
- Benesse Falls Over 7% On Fewer Correspondence Course Students
- Euro Falls To 3-Month Low Vs. Dollar, 2-Month Low Vs. Yen After Polls
- Loss-Laden Utilities To Tap Reserves To Help Fund Dividends
It had been thought that the global economy would be supported by the US Federal Reserve until the US election in the hopes of helping incumbent President Obama’s reelection chances. But it seems that voters in Greece and France may have forced the issue 6 months earlier.
The only saving grace of the earlier horrendous Greek parliamentary vote was that, based on very preliminary results New Democracy and Pasok would be able to form a coalition government with precisely 151 seats needed in parliament to give them status quo powers. However, according to a more recent re-rack of the votes (New Democracy 18.9%, 108 seats, Pasok 13.4%, 41 seats, Syrizia: 16.6%, 51 seats, and all others), this assumption is now in jeopardy as the two pro-bailout parties will have just 149 seats in the new parliament, or not even a full majority.
Why is this problematic? Because virtually every other party in the new parliament, and there may be up to 10 there including the New Dawn, have voiced their opposition to the bailout of Greece, which as everyone knows is merely a bailout of Europe’s insolvent banks using Greek taxpayer funds as a conduit. And, adding insult to injury, Reuters now reports that “Greek leftist leader calls for anti-bailout coalition.” It appears that finally, after many years of delays, the anti “bailout” genie is finally out of bottle…
Japan has tied its economy to what happens in Europe and the US, ostensibly to try to keep the global financial Ponzi scheme from collapsing. Rather than focusing on making Japan a stronger nation by rebuilding Tohoku and the domestic economy, the Japanese government has spent the past year since the disaster subsidizing Japanese companies who are fleeing the nation, propping up European banks, and spreading radiation around Japan like a super virus.
The government’s main plan to solve its own debt problems are to raise taxes which accounts for little more than a death sentence to nation’s already declining consumer economy. Having little success in convincing the population that higher taxes is a path to reelection, politicians have turned to covert taxation.
- Nikkei: Govt Applies More Pressure On BOJ To Produce Results
A senior Cabinet office official who attended the central bank’s policy-setting meeting said that the government deems it particularly important for the BOJ to produce “visible results” by “promptly” achieving a near-term inflation rate of 1%, according to minutes of the meeting, released Monday.
The government made similar comments at the central bank’s March policy board meeting, but ratcheted up the pressure in April with the addition of the word “promptly.”
Of course, the lack of inflation is about the only thing that has protected the Japanese family for the past twenty years of decline in overall economic growth. But in moments of honesty, economists have a different description of inflation.
By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens. – John Maynard Keynes (author of the Keynesian economic theory of destruction)
Inflation is taxation without legislation. – Milton Friedman
The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists. – Ernest Hemingway (Author – not an economist but correct in this assessment)
The Japanese government is desperate to do something to make it appear that things are okay. But after 2 decades of kicking the can down the road, there is little it can do … except savage the working families for their savings. We predict this will be their next move.