Monthly Archives: April 2014

We’re just moving…

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I established my own think tank “IISIA”, which is totally independent from any external authorities, in 2007, after having jumped out from the MOFA voluntarily.

Today, we’re moving!! The new office of the IISIA will be opened on next Monday in the Sengoku-yama Mori Tower in Roppongi/Tokyo. In advance, I show you the view from its window. Here, you can enjoy such a fantastic view of the Tokyo Bay Area… Come and join us!

Why didn’t Obama Agree with Abe?

After my visit to Almaty, Kazakhstan, I’m now focusing on whether a massive turbulance would occur in the latter half of the forthcoming May in the Japanese financial market. You might then wonder, “Why in the latter half of May?”  In order to understand the reason, I’ll explain the simple logic of what I’m now thinking as follows:

– Japanese Prime minister Abe once made it clear that his government will decide whether the consumption tax rate could be raised to 10 percent based on indices of economic performance during the third quarter of this year in Japan.

Under this circumstance, we can’t help imaging the Japanese stock market will sharply go up during this period. The typical indices such as “TOPIX” and “Nikkei 225” should be included as decisive indices in the above mentioned context, so that the GOJ will made efforts to raise it drastically by all means.

The bazooka will be shot not by the BOJ but by the GPIF (Government Pension Investment Fund ) this time (Maybe in June).  Finance minister Aso, who is very famous for blurting out government’s secret, already leaked the hidden strategy of the GOJ in this regard.

My adaptive unconscious now suggests a turbulance could suddenly blow in global macro up just before the Japanese market will be booming. In accordance with “Le Chatelier’s principle”, the market falls in advance, when they will go up. The question is the market’s collapse has already come or will come in the near future. We can theoretically regard drastic correction especially in the first quarter of this year as such a phenomenon, while it can’t simply be sufficient to let the Japanese market jump up. If the latter will be the case, we must take into account something dramatic and significant indeed will happen suddenly and affect the financial market negatively.

Besides speculation, one thing is clear: The more Prime minisiter bears hardship, the more enthusiastically he drives the asset bubble in Japan.  This is the very reason why Obama didn’t agree on the pre-negotiation of TPP (Trans-Pacific Strategic Economic Partnership Agreement) with Abe. Because Japanese prime minisiter’s authority should be endorsed by the USG at least so far, Abe will be facing power struggle soon. If he will fail to manage it, a general election must be held in the near future. It seems that nobody, especially in the LDP, believes that, while some once defeated politicians of the DPJ closely related to US already began to prepare for such a dramatic change of the Japanese politics secretly.

The Japanese traditional leadership after the WW II has been steadily confident of validity of the so-called “Japan-US alliance”. In this alliance, the US has always given frameworks, which Japan had to obey. However, the sea change has just come. The current failure of negotiation no TPP, which I had anticipated in my analysis by the way, made it clear to all the Japanese that US doesn’t take care of Japan any more. For the US leadership, not trade issues but financial transactions vis‐à‐vis Japan is vital, while its nation is now heading to a historical default crisis (maybe in the summer of 2015). Obama was entitled not to agree on TPP with Abe, but to set financial and political explosion in Japan. That’s all. I’m sorry, Minister Amari, our Japanese tough negotiator, but that was decided in advance.

After the 3 days visit to Japan, US President Obama flew to Seoul, where he clarified “the Japanese comfort women system was terrible violation of human rights”. This statement will apparently leads to power struggle against Abe, who will be harshly criticized not to have convinced the US alliance partner of Japan’s claim on this issue.

Anyway, Obama’s mission was successfully completed: Let Abe down immediately. He looks nice but is a bad boy. The next round would begin, as I mentioned above, in the latter half of May, when some risks including geopolitical or financial ones would burst abruptly, without prior notification of the USG to Japan. In Tokyo, Sushi won’t taste good any more. Stay tuned…

 

 

 

Dream of Eurasia and Rolle of Japan

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I’m now waiting for my NH flight to this time’s final destination “TOKYO/HANEDA” in the Gimpo Int’l Airport/Seoul. From 17 to 18 April, I was invited to the Eurasia Business Forum in Almaty, where I delivered a speech in a session called “Future of Energy”.

To be honest, I hardly imagined Kazakhstan has developed and continues to develop in spite of the on-going financial crisis since 2007. Furthermore, I’m very impressed and astonished to hear that the participants spontaneously praised for the Japanese style of economic development. Japan is apparently regarded as nation of success there.

During the forum, it was quite remarkable for me that the Kazakh delegates often expressed their caution to be de facto controlled by the Russian. In the context of the current tough negotiation regarding the Eurasian Custom Union, for example, many participants of the Kazakh authorities referred to the importance to maintain their own national interest, even though Russia plus Belarus keep trying to let their rules be applied to other parties. In addition to that, the Kazakh generally don’t hesitate to mention they resemble the Japanese. Even the chairperson of the forum introduced me as a key note speaker by saying he believed at a glance I were Kazakh. What a splendid expression of amity it was!

You can read the script of my speech below, which I checked and slightly corrected after the session.  This was the very debut for me to act as one of global opinion leader in Eurasian scenes. Next month, I’ll take part in the St. Petersburg Economic Forum, while I’ll be invited as a panelist for the session on open data and its role in the current world. The second stage of my life finally began and is accelerating. Can you catch me, while I’m galloping through the world??

 

“Think the Unthinkable between the West and East.

How should Eurasia and Japan Tackle

Emerging Global Issues for the New Era”

(Keynote speech on the occasion of the Eurasia Business Forum 2014 in Almaty)

Takeo HARADA

(CEO/Representative, Institute for International Strategy and Information Analysis, Inc. (IISIA) in Tokyo, Japan)

 

 

Honorable Chairman,

Distinguished guests,

Ladies and gentlemen,

 

It is a great honor for me to be invited as a keynote speaker to this forum. This is the very first time for me to visit Kazakhstan, even though I served as Japanese career diplomat for 12 years. At that time, I was once posted in the Bureau for European and Oceanian Affairs in the Ministry of Foreign Affairs and mainly took care of diplomatic relationship between west European countries and Japan. Next door to my division, there was a tiny unit for the NIS countries, where my Russian speaking colleagues were in charge of Kazakhstan. That was in about 1999. To be honest, there was no Japanese diplomat who could correctly anticipate brilliant development of NIS or CIS economies afterwards. Taking this opportunity, I must confess to you, ladies and gentlemen, I never thought of such an economic success of these countries including Kazakhstan. In this regard, I’d like to show great respect to all my friends in Kazakhstan for their efforts beyond description they made after the declaration of independence.

Ladies and gentlemen,

Today, the global community is facing a variety of common issues. Because there are so many issues to be tackled, we can’t grasp what they really are. A Japanese proverb says, “When you look at a single wood, you never recognize the forest as a whole.” So, I’d like to recommend you, ladies and gentlemen, to see the things from the opposite side. We should start with the “forest”, and then finally reach each wood.

What’s the origin of all these global issues? You might have several different answers, but I’d like to point out the most decisive one: The abnormality of solar activity. Normally, the sun changes its activity every 11 years cyclically. However, it is observed by astronomers that this cycle can’t be found in its current activity. In addition to that, the Japanese solar physics satellite called “HINODE” discovered the sun’s magnetic field had flipped.

Furthermore, US Scientists recently said destructive solar blasts narrowly missed Earth in 2012. I quote a relevant news wire released by Thomson Reuters on March 20 in this year shortly:

“The bursts would have wreaked havoc on the Earth’s magnetic field, matching the severity of the 1859 Carrington event, the largest solar magnetic storm ever reported on the planet. That blast knocked out the telegraph system across the United States, according to University of California, Berkeley research physicist Janet Luhmann.

“Had it hit Earth, it probably would have been like the big one in 1859, but the effect today, with our modern technologies, would have been tremendous,” Luhmann said in a statement.

A 2013 study estimated that a solar storm like the Carrington Event could take a $2.6 trillion bite out of the current global economy.

Massive bursts of solar wind and magnetic fields, shot into space on July 23, 2012, would have been aimed directly at Earth if they had happened nine days earlier, Luhmann said”. End of the quotation.

Ladies and gentlemen, this is the reality we are now facing together. You can’t divide the sun among countries. The sun is sun. Everybody on the earth has been and will be affected by this dramatic irregularity of the solar activity.

Scientists already suspect this simple but decisive fact influences magnetic fields of the earth and its climate. But the problem is they haven’t found out yet how such a mechanism works between the sun and earth. Based on this scientific ambiguity, there are still some scientists who never recognize the close relationship between the solar activity and climate change.

At this stage, I must say, “Seeing is believing”, ladies and gentlemen. In the last couple of years, we suffered from heavy snowfalls in Washington D. C., London and Tokyo. In Tokyo, my hometown, for example, we had heavy snowfalls and –storm even two times in the last February. This kind of phenomena was really unprecedented in the Japanese history.

In short, the climate has been steadily changing. We must prepare for the global “cooling” in the conventional centers of western civilization, while other regions around the north pole like Russia and Canada obviously face the global “warming”.

This is the second fact I’d like to underline here, ladies and gentlemen. And that causes then irregularity of global health especially in the northern hemisphere. It’s already proven scientifically that human immune strength is weakened to 60%, when atmospheric temperature goes down 1 °C lower than before. When that is the case, everybody slows down his daily activities, which off course leads to stagnation and deflation of economy.

As a matter of fact, western economies except for Japan, which is now trying to undertake the “ABENOMICS”, begin to tackle irreversible deflation. Although the FRB and ECB has stuck to their QEs to stimulate the economy, the timing is coming when they admit they fail. This new financial and economic reality is gradually causing massive capital flight to new safe havens, where we can still dream of further inflation just for a while.

To sum up so far, ladies and gentlemen, please keep the following factors in your mind:

Number 1: The Abnormality of solar activity

Number 2: Climate change including global cooling in US and UK

Number 3: Weakened immune strength of human bodies

Number 4: Stagnation and deflation of the world economy

That’s it.

 

Now, you may wonder what to do. In principle, you can’t avoid this process as long as you live on the earth. Only thing we can do is just to adapt ourselves to this dramatic change of all our surroundings.

To survive this unprecedented hardship, the global community gradually becomes aware of two things, which will be more and more important in the course of time. They are “renunciation of war” and “innovation”.

In the conventional capitalism including ultramodern one called “financial capitalism”, we can’t help repeating warfare cyclically to keep the inflationary economy. In the inflationary economy, everybody puts emphasis on becoming “rich” and tries hard to make his own business bigger. That inevitably leads to bubbles and their collapse. To adjust differences between supplies and demands, global leadership has always made use of warfare to raise the latter. After the wars, the economy has been successfully adjusted at the cost of the massive war dead. That’s the hidden truth in the modern and contemporary world history.

But the rule has been just changed. In the era of global and total deflation, we don’t need bubbles and their collapse any more. Instead, we urgently need a set of brandnew rules for living and cooperating together peacefully. From now, the spirit of symbiosis beyond nationality, ethnicity and differences of opinion is needed.

In this context, your turn is coming, ladies and gentlemen. Why? Eurasia is pierced by the Silk Road. History shows clearly the traffic between the west and east on the Silk Road was maintained peacefully in the Middle Ages. Cultures of every nations in the region of the Road must have inherited this tradition. And based on this tradition, the Eurasia Business Forum is organized and held, as far as I understand.

Ladies and gentlemen,

Regarding the urgent call for innovation, I must shortly explain why we still need innovation. Innovation is always needed. That’s true. However, by saying this word, I actually mean production of “genuine” added values. Except for that, every so-called “innovation” is simply absorbed in commoditization, which is sharply accelerated in the current total deflation.

In this regard, I’d like to touch upon what this kind of real innovation can be. My answer is “transmutation” and “cold fusion”. Both of them have been denied, rejected and disregarded by leading scientists especially in the western countries for many years. Although obvious phenomena thanks to these high technologies are frequently discovered in laboratories, they loaf on recognizing them. They prefer simply keeping their conventional scientific theories to going beyond them. This tyranny of leading scientists should be just wiped out for the sake of real innovation.

Taking the example of “transmutation”, I’ve been personally following and assisting dramatic development of related technologies owned by a venture company in Kanagawa, Japan. The researchers of this venture have struggled to get official and scientific recognition of their innovation for more than 10 years, even though almost nobody showed interest.

But the time has changed since 2011. Ladies and gentlemen, as you must know, the Fukushima Dai-ichi nuclear plant has spread various, extremely dangerous radioactive substances after the Great East Japan Earthquake on March 11 in that year. Among severe tasks the Government of Japan and her society have been tackling, you can find on-going discharge of tritiated water from the nuclear plant.

In the last March, the researchers succeeded to undertake an experiment of verification of their transmutation technology. It is scientifically proven that this technology can be basically applied for detoxifying of tritiated water. This must be glad tidings not only for Japan but also for all other countries, which also have suffered from similar and severe nuclear issues.

Ladies and gentlemen,

I hope you now understand the whole “forest”, in which we’re living, instead of sticking to single “wood”. Every time the human kind faced difficulties, which once seemed not to be overcome, it always managed to reach final solutions together to move forward. That’s the essentials of the world history.

Within five years from now, everything will be changed on the globe. Conventional frameworks in both of our brains and international community will be replaced by new ones. It’s true to keep thinking and continue to something innovative is very hard for all of us, on the one hand. But on the other hand, the period ahead of us now is so exciting that we shouldn’t miss every simple opportunities. For this purpose, we come together here in Almaty, I firmly believe.

Last but not least, I’d like to express my warmest thanks to the secretariat of this forum again and wish all of you, ladies and gentlemen, successful encounter and collaboration during the events. Thank you for your kind attention.

/END of the TEXT/

Atomic Carbon Saves the World

In Japan, everybody on the street is now discussing “Ms. Obokata-issue”. I’m fully aware of the fact a lot of my friends all over the world reads this weblog, who aren’t familiar with social affairs in Japan such as this one. However, I won’t take this opportunity to deepen the discussion on the above mentioned hot issue around Ms. Obokata. Instead of that, I just want to ensure innovation as such never stops in Japan, even though every Japanese scientist seems to shrink into himself. The point is innovations of industrial use always begins not in huge, eminent laboratories like the RIKEN, but in tiny, unknown and private shacks, as it was the case for Thomas Edison.

Besides my capacity as analyst of global macro, I’m actually incubator of innovations. The reason why I can move around as incubator in Japan is as follows:

Innovation in early stage needs really a huge amount of money. Private sector can’t afford to finance it. Public sector should be in charge of that. As a former career diplomat, I still maintain a broad human network in the Japanese bureaucracy, which indeed helps innovators to get in touch with decision makers in the public sector.

Innovataion needs public acceptance. When they begin in authoritative laboratories such as ones at the Harvard University, nobody doubts their authenticity. The problem emerges, when they come up in unknown, private laboratories I described above. Without watching innovative phenomena at first hand, people voice their doubt and begin to eliminate brandnew innovations and discoveries from public scenes. To move forward against that, effective advocate is essentially important for unknown innovators. As author and contributors to Japanese mass media, I’m capable of play the role of such an advocate for innovations.

This is a Japanese version of “Tri-sector Leadership” I mentioned before on this weblog.  Even before the discourse on it began in US, I have been a practitioner and pioneer of this kind of leadership in Japan. Actually, I’m proud of that.

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In this regard, I’m now wondering whether my foreign friends, who are somehow dealing with problems concerning waste and sustainable energy, seeks to opportunities to find out related innovations in Japan. What I want to introduce to you is a splendid invention of the so-called “atomic carbon” by a Japanese venture called “EEN”. The unique techniques the company has been innovating can be described as shown below:

– All you need is wastes of organic matter. You will put them in the machine called “EE21”, which then activates nitrogen treatment at low temperature.

– Having finished the treatment, you will get a certain amount of “atomic carbon” with very low cost. As you might know, carbon normally exists as a part of chemical compound. “Atomic carbon” is atomic, that is to say, it has much more distinguishing charasteristics of carbon than normal one.

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For example, you can make unprecedented batteries with this “atomic carbon”. First of all, just make a voltaic cell, into which you pour only a drop of water and 1 gram of this “atomic carbon”. To be astonished, you will generate a 9-volt current, while conventional voltaic cells can reach 2 or 3-volt maximum. Furthermore, this voltaic cell with “atomic carbon”, keeps to generate electricity for three months! To revitalize it, you need only to pour another drop water into it.

Do you know how much electricity you need to let a electric vehicle run? The answer is about 400-volt current. With 40 kilogram of “atomic carbon”, which is originally made from wastes in cities and factories, you can drive a car. No more fuel-cell vehicle is needed. All you need is wastes of organic matter. That’s really all.

This is only an example of how you can make use of “atomic carbon”. The venture “EEN” just succeeded to make compounds of metal and “atomic carbon”, I just heard. A traditional textbook of chemistry explains any metal can’t be coupled carbon, while “atomic carbon” is apparently an exception for that.

To minimize fuel expenses, car industry all over the world is now trying hard to lighten car’s body. Let’s imagine how to make an ultralight body made with “atomic carbon”. With that, you can monopolize the market, I would say.

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Mr. Kunimichi SATO, CEO of this venture, told me a Canadian local government just decided to import an EE21 plant for sustainable treatment of wood waste. In addition, a Brazilian local government will soon dispatch a fact finding mission to EEN in order to check whether it can be used for effective disposal of tremendous amount of municipal wastes.

Because of the rigid bureaucratic regulations and policies of waste disposal in Japan, Mr. Kunimichi SATO and his team have still difficulties to implement the sustainable eco-system between wastes, energy and resources in Japanese cities. What they can try now is to gather satisfactory results and achievements with EE21 in foreign countries and to bring them back to Japan. For this trial, those who are in charge of waste disposal and sustainable energy in political and bureaucratic scenes abroad are urgently needed. Of course, those who want to be alliance partners are also welcome.  Send me a message via wordpress. I’ll respond A.S.A.P.

Once again, “INNOVATION IN JAPAN NEVER STOPS”. For the sake of the better world in our common future, I’ll continue to run around as incubator and advocate of innovations in Japan. What will come up then?? Stay tuned…

 

 

 

 

 

 

 

Japanese Style of Deflation à la Mode

Having come back from the Niyodo River, one of the most beautiful Japanese rivers in the Kochi Prefecture shown above, I just pick up some articles and columns which simply point out the world community is now heading to total deflation.

First of all, a brandnew column on my favorite blog written by Barry Ritholtz. He carefully named it “Why has Core Inflation Slowed?” But actually, it’s regarding the current accelerated deflation of US economy. In spite of the massive QE so far, the US apparently fails to inflate its economy as a whole. The point is now when Obama will admit “We’re now facing not inflation but DEFLATINON.”

Secondly, the OECD declares its annual inflation rate slowed to 1.4% in the last February. Bureaucrats of this industrialized nations’ salon also carefully disseminate it by saying the following:

“Excluding food and energy, the OECD annual inflation rate was stable for the fourth-consecutive month at 1.6 percent in February.”

Beyond such a typical rhetoric, nobody can doubt the world economy is just heading to total deflation, while western economies have been trying to pour countless money into the market but in vain.

Finally, an article on the current situation in Spain: Her economy obviously entered the time of deflation, while consumer prices fell for the first time in the last four years there. In addition, the ECB finally explains France, Italy and Spain are now caught in debt trap. Something significant must be done quickly, although poor Mario Draghi isn’t brave enough to do so.

Well, my dearest readers, the truth is quite simple. THE WORLD COMMUNITY HAS JUST STARTED TO GET INTO TOTAL DEFLATION. That’s all. I’ll show you its mechanism simply as follows:

-Solar activity gets troubled and affects lines of magnetic force around the earth.

-That causes dramatic climate change on the globe.

-Especially in the northern hemisphere except for the North Pole, global cooling gives negative effect to traditional centres of western economies.

You may wonder why “global cooling” gives affect the financial capitalism negatively, I suppose. It has something to do with human immune strength. It’s already proven scientifically that human immune strength will be weakened to 60%, when atmospheric temperature will go down 1 °C lower than before.

Based on the facts mentioned above, I can imagine all the eminent investors have been seeking ultimate target of their investment, which is still resilient to this irreversible change of the sun and climate. The answer is JAPAN, while the majority of the Japanese people isn’t even capable of recognizing it.

Until now, the rest of the world has scoffed at the Japanese style of deflation, or “deflation after sudden collapse of the Heisei bubble since 1990”. However, the “Ironie der Geschichte (Irony of the world history)” shows, “Westerners, your turn is coming”, while the Japanese have been forced to train themselves so that their economy can stand massive deflation.

I’m fully aware of the fact that lots of my friends living in other countries than Japan frequently read this weblog, for which I thank you very much. As a token of my gratitude, I’ll give you based on my own experiences in the Japanese type of deflation some tips on how to survive in the next 100 years:

NEVER GIVE UP. Things won’t be done from now as you will have expected. However, the worst is to abandon your wish and dream. To accomplish them, it will simply need much longer time than before.

GET BACK TO HUMANITY. The conventional rule, “Winners get all”, won’t work any more, because nobody won’t become winner. Forget “Gesellscahft” and remind yourself to go back to “Gemeinschaft”.

DON’T FORGET WE ARE LIVING ON THE EARTH. In the era of total deflation, nobody will be trapped by your social manipulation via mass media. Instead of that, the sky and earth, the most simple but indispensable media around us will become more and more decisive for our daily life.  Learn how to adapt yourself to them.

Last but not least, I must mention Japan is now heading to the quite opposite direction: “inflation thanks to different dimension led by the BOJ”. Can you understand what will occur in the near future?? Massive capital flights to her market, while others will get into total deflation. You should wonder what the very hard core of Japan prayed for. The Japanese never forget they were forced to give up the once given right to hold the Olympiad in 1940. Before the Summer Olympic Games in Tokyo in 2020 will be held, the obstacle factors in 1940 must be wiped out. What’s it then?? Stay tuned…