Monthly Archives: October 2014

BOJ Committed Suicide.

The worst thing I had ever imagined in terms of the “ABENOMICS” just happened: The Bank of Japan announced yesterday to start its additional quantitative easing.

What the BOJ wants to do in very close coordination with the Ministry of Finance is quite simple as follows:

– The BOJ starts to buy Japanese government’s bond from the GPIF, one of the biggest (sleeping) SWF in Japan.

– By doing so, the GPIF gets fresh cash and buy massively equities of Japanese companies, which are mainly held by foreign investors nowadays.

– Finally, foreign investors plus their governments begin to declare support to the ABENOMICS.

 

 

Hmmm… To make everything simple, I’d just say one thing to you: The BOJ committed suicide. Why?

 

What the Japanese people urgently need is not money but innovations which give them new technologies with huge markets.  It’s not money itself, but the real economy that matters. While I interviewed top bankers in Japan recently, all of them agreed on the opinion that Japanese banks are full of money to the brim. They really have no idea how they should treat the money.

Apart from such a reality, the BOJ focus on two things: The one is to boost historical asset bubble, and another is to hyperinflate the whole Japanese economy at the very last stage. There are, of course, very good to the GOJ, but fatally bad to the Japanese citizens.

To secretly declare its default around 2017/18, the GOJ has to make efforts for financial adjustment by all means. In this regard, it plans to sell off huge amount of national assets such as equities and real estates. To earn much more money than usual by doing so, the GOJ needs an asset bubble. Folks of the Ministry of Finance aim only at rocking the market, and don’t care what will happen afterwards.

Without boosting the real economy, the poor ordinary people in Japan will face disastrous hyperinflation sooner or later. To devalue sovereign debt, hyperinflation is the best way governments can choose, of course, at the sacrifice of citizens on the street. What folks of the BOJ are telling in the public, is just “noble lies“.

 

225_1day_20141031

 

Due to this bazooka shot by the BOJ, the NIKKEI 225 index rocketed, while JPY/USD is being depreciated dramatically. You may wonder what will occur from now on, I suppose.

There is one thing the BOJ plus the MOF obviously neglect: It’s not fincial measures but geopolitical risks guided by US and Europe change the world. Wise investors are now checking out the simple fact that the gold market is moving downward in opposite correlation with the Japanese stock and currency markets. According to the Le Chatelier’s principle, the whole thing will become upside down at the next stage: Dramatic appreciation of gold and JPY plus collapse of the Japanese (and world) stock market.

 

Well, “Alea iacta est.” To evade disastrous end of the scenario the BOJ and MOF obviously keep, the Japanese urgently need to get back to innovations. Only innovations can boost the real economy. I’m firmly of the opinion innovative technologies related to detoxifying tritiated water emitted by the Fukushima Dai’ichi Nuclear Power Plant, which I already pointed out to the public for several times, are capable of making successful contributions in this context. Because they are also capable of producing hydrogen based on the detoxifying of tritiated water, which clearly enhance the GOJ’s policy towards hydrogen energy.

Now, the time has finally come for me when I should make a proposal of such a comprehensive and essential innovation in Japan to the very person who is politically entitled to make a decision. I firmly believe it’s the destiny of my life which will surely save Japan and the world community and I shall win this game.

ABENOMICS and Future of the Japanese Emperor

uesugi_3

Last week, I had an opportunity to meet a very famous, leading banker of one of Japanese megabanks in Tokyo. I asked him an honest question I had been bearing in mind recently: “What do you think of the future of ABENOMICS?”

Smiling spontaneously, the banker who is said to have a close relationship with hidden assets of the Japanese imperial family, responded to it as follows:

 

“Well, before you’re coming, I welcomed one of co-founders of the Carlyle Group from the States. He raised the same issue, and I explained to him that the third arrow of ABENOMICS wasn’t let off yet. We’re all still waiting for that.”

 

For those foreign readers who are not familiar with Japanese affairs, I’d like to give you an additional explanation. The so-called “third arrow” of ABENOMICS was already let off, officially saying. Nevertheless, everybody knows its poor contents to boost the Japanese economy. The banker obviously implied the Japanese financial world doesn’t regard it as appropriate measures for further growth of the Japanese real economy. This perception gap between the GOJ and financial industry leads to accelerating stagnation in this country.

By saying so, I never mean ABNOMICS is worthless. I highly appreciate PM Abe who is not well known for his expertise on economy, tried hard to surprise the international community by a sudden change of direction to massive quantitative easing of the BOJ. In addition, he has made great efforts to go abroad as often as he could, in order to show his foreign counterparts what the ABENOMICS is intended to be.

However, the point is PM Abe is lack of sense of both entrepreneurship and innovation. As a son of legendary Japanese conservative politician “Shintaro ABE“, he is a born politician. Not an entrepreneur at all, which always seeks added values in economy. Even though he is said to be surrounded by a lot of technical innovations to potentially boost the Japanese economy in a drastic manner, he can’t simply point out and pick up some of them as leading technologies for Japan’s future, which should be intensively supported by the government. Instead, he always relies on the bureaucracy, especially the METI, which has been never capable of making right decisions to make the Japanese economy prosperous and sustainable.

I personally stick to my basic scenario which says the second phase of Japan’s bubble economy will come soon. After a violent reversal of what we’ve seen in the world so far, Japan will suddenly emerge as the ultimate safe haven. Thanks to the fact Japan is immune to Islamic terrorism and outbreak of Ebola virus, Japan will be regarded as so. The on-going historical QE of the BOJ plus massive inflow of foreign capital will restart Japan’s bubble at the border between 2014 and 2015.

But, don’t be deceived by the Japanese tricky grand-strategy! This second version of Japan’s asset bubble is intended to hyperinflate her economy, which will make the GOJ’s sovereign debt almost valueless. Of course, the Japanese economy will be totally destroyed.

What you shouldn’t disregard is the world community will then fear the GOJ would sell out US Treasury bond and bill which it has been holding for a long time. The fear will be dramatized when Japan suddenly tries rapprochement with the PRC and resume Sino-Japanese financial cooperation. How to defend their joint strategy to contain and reverse the financial hegemony of the States will be suddenly the top priority for the US-American leadership. Unfortunately, it’ll be too late, and the USJ will be forced to declare its default. The collapse of the US-American political system will finally free Japan from her agreement with the USG to sacrifice all her national wealth to the American, in order to save the Japanese imperial house. Such a secret agreement between Japan and the US was reached just after the WWII, which has been never taught in any schools in Japan.

As you know, the US-American leadership isn’t foolish enough to just wait for such a dramatic change of its position in the international community. To deal with the real power-holder in Japan, it will surely attack then both authenticity and authority of the imperial power. It will try to put up those Japanese people on the street who are feeling a sense of alienation due to financial collapse of the Japanese economy. Manipulated indirectly by the US intelligence services through social media, they will publicly cast doubt on the Japanese imperial system and renovate the whole political system with dethronement of the emperor.

 

Now, you see how serious our common future around Japan will be. To let you be much more familiar with this issue, I just relaesed my new book entitled ” Revived Shinkichi UESUGI.  How to react on revival of constitutional theory for the Japanese emperor’s sovereignty.” on October 24. It describes the current climax of what I’m seeing while anticipating the future. Check it out and share the sense of impending crisis.

 

Why Doesn’t ABENOMICS Work Any More?

When I wake up at 4:30 a.m. these days, I feel the winter has already come in Tokyo. Even though the temperature during the daytime still goes up to even more than 25 degrees Celcius here, it’s really cold in the early morning. Due to the on-going climate change worldwide, the volatility of climate in Japan has become more and more wide along with one in the financial market. Without taking care of immune system, it’ll be surprisingly hard for you to survive in this winter.

Among the Japanese, it must be extremely chilly to Prime Minsiter Shinzo ABE for the several reasons: First of all, the latest approval rate for his second cabinet has just dramatically fallen to 47.9%. Although he tried to pick up as many female colleagues as possible and let them in his new cabinet, some of them already suffer from scandals. That clearly shows Prime Minsiter ABE is lack of capability of risk management with precautious measures, which was quite famous during the former KOIZUMI cabinets, by the way.

 

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Secondly, his policy has been concentrating too much on the stock market. Prime Minister ABE pretends to believe as if there were so-called “three arrows” in the ABENOMICS, there is only one which matters: massive quantitative easing by the Bank of Japan. Without preference to fostering the real economy with brilliant ideas, his cabinet just follows what the financial authorities.

Of course, Prime Minister ABE always travels around in the world to sell his ABENOMICS to foreign colleagues. Nevertheless, it’s not words but results that matter for the international community. Without pushing forward industrial innovations, which are, of course, very good for the real economy, his cabinet just inflates the Japanese economy. That obviously leads to speculation of foreign financiers in terms of the real intention of Japan.

The reason is quite simple: Historically viewing, only the following four measures have been proven as effective to solve sovereign debt problem:

– Increase revenue by growth of real economy.

– Get forgiveness of both domestic and foreign investors.

– Hyperinflate the economy.

– Get into war economy.

The most modest one is the first option, even though it’s actually difficult to accelerate the growth rate while preventing the long-term interest rate from rising simultaneously. When you look at Prime Minister ABE’s policy for economic growth, you can hardly find out those measures that can really work both immediately and fundamentally. Thus, this first option is abandoned from the very beginning of this story, while Prime Minister ABE doesn’t have obviously any personal and feasible ideas to innovate the Japanese real economy.

The difficulties of the second alternative is quite apparent, when you see a series of Argentinian default these days: Foreign investors never give up their entitlements for the sake of some nations’ future economy. Instead, they continue to attack them until they will give up to accept full payment. What governments can do is only to prepare reasons for begging forgiveness. All the things that the ABE’s cabinet has been doing are regarded as such preparations at least from the viewpoint of foreign investors. Whether the latter will cooperate with the GOJ in the moment of the truth, remains unclear.

Thanks to the famous ninth article of the constitution (abandonment of warfare), Japan can’t take advantage of war economy, while other western countries love to do so. For example, Japan never declares to dispatch her self-defense force for combatting the Islamic State, while sympathizing with the self-proclaimed “coalition” led by USG verbally.

Now, you can realize the above shown third option will be the most realistic one Prime Minister ABE can choose for the time being. To hyperinflate the economy for making all the sovereign debt less valuable is good for the Ministry of Finance, but too bad for people on the street in Japan. Foreign investors are quite aware of what will happen then and has just begun to rush for sell-off of Japanese stocks.

 

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The people in Japan still believe Prime Minister ABE is capable of showing his own initiative to lead the nation. However, the reality is opposite to such an expectation. He is rather good at coordinating others’ interests for teaming up. Except for his preference to conservative ideology especially in security policy, Prime Minister ABE isn’t famous for his own political ideas and initiatives so far. Now that Ms. Yuko OBUCHI, Minister for Economy, Trade and Industry, declared her resignation, ABE’s latest initiative called “WOMANOMICS” looses its credibility and is to be criticized as unfair nepotism of women from traditional power houses.

 

obuchi

 

I suppose there is only one option for Prime Minister ABE to survive: Convincing both the Japanese people and the international community of his sincere initiative for innovation to boost the real economy. In this regard, I hinted him through his most reliable person of a decisive idea in terms of detoxifying tritiated water of the first nuclear reactor in Fukushima. Prime Minister ABE is said to have ignored this idea in Milan at first hand, however, will understand gradually what effect it has for his political survival. I myself am always prepared to talk to him directly, if he wishes. Waiting for his phone call, I’ll just take a rest and relax for a while.

 

 

 

Are You Prepared for the “X-Day”??

In principle, I don’t care what other self-proclaimed “experts” and “analysts” say in terms of coming trends in the financial market. Instead, I’ve just concentrating on what I feel and anticipate with my “six” senses.

Nevertheless, I sometimes come across few people who can potentially share fundamental thoughts and ideas on market with me. One of them is currently Ms. Kiana Danial whose brandnew video is shown above.

Besides details of her report, I find it extremely remarkable that she describes trends in the currency market as “dance” of currencies: When a pair of certain two currencies steps forward on the stage, others automatically step backward. This is exactly what I’ve recommended you, dear readers, to focus on: Le Chatlier’s principle, which gurus in the international financial market such as the House of Rothschild follow.

When you look at the market, you simply believe the total volume of wealth there continues to grow. However, the truth is it’s invariable: If an asset class starts to rocket, another one inevitably begins to fall. What you should do is not to keep eyes on upwards trends but to look at the marked as a whole. What you can do is only to keep the total amount of your wealth, when you reach a certain high stage in wealth management. In this regard, I find terribly important what Kiana’s report usually points out to you (By the way, her Jewish Iranian origin itself is extremely interesting for those who want to get to know the world in depth, I believe.)

Getting back to “trends ” of the market, my closest alliance partner, “Mr. HKD”, sent me the latest result of his statistical analysis in terms of the stock market in NY as follows:

 

//////////// RISK_ON ///////////////////////////////////
20141009    0.038866435    -1    17061.48    over 67.26
20141010    0.038983699    -1    17227.43    over 568.18
20141013    0.039100831    -1    17182.17    over 522.92
20141014    0.039217832    -1    17153.34    over 494.09
20141015    0.039334701    -1    17003.21    over 343.96
20141016    0.039451439    -1    16995.44    over 336.19
20141017    0.039568045    -1    17080.68    over 421.43
20141020    0.03968452    -1    17060.91    over 401.66
20141021    0.039800862    -1    16867.96    over 208.71
20141022    0.039917072    -1    17042.21    over 382.96
*20141023    0.04003315    -1    16688.96    over 29.71
20141024    0.040149095    -1    16688.24    over 28.99
20141027    0.040264908    -1    16687.53    over 28.28
20141028    0.040380588    -1    16686.95    over 27.7
20141029    0.040496136    -1    16686.49    over 27.24
20141030    0.040611551    -1    16685.9        over 26.65
20141031    0.040726833    -1    16685.56    over 26.31

 

Hmmm… Now, you see the next sea change will come apparently on October 23, even though the last version of his analysis regarded “Octotber 17” as the critical data. I personally think we should still be careful on both 17 and 23 of October, especially when you look at the Japanese stock and currency market.

The point is rather what will happen on these two dates. Statistics never tell us the “meaning” of what they show us as critical dates as shown above. At his latest speech at the UN general assembly, US President Obama gave us some hints on what will occur on the “X-Day”: He clearly named “Ebola virus”, “Islamic State (IS)” and “Russia” as three enemies of the international community.

 

 

What, if Ebola virus would begin to kill thousands of people in US and Europe, while retaliation of the IS would start by massive terrorism all over the world? What, if Russian President Putin would still refuse to join the so-called “coalition” against the IS and kick off his campaign to blame his US-American counterpart Obama for the beginning of the third world war?

Anyway, you have to expect something decisive will take place on either 17 or 23 of this month. Please don’t forget a shock in the very near future will prepare for quite new and upward trend of an asset class afterwards. In this context, I stick to “Pax Japonica” and continue my own operation to boost the Japanese style of innovation, which will dramatically change the whole world. Stay tuned.

 

(If you’ve not registered yourself in our mailing list, just click this and sign up immediately. As soon as my next whiteboard seminar will be released, you’ll be alarmed.)

 

 

Endgame of Hong Kong’s Legend

Uprising of student power in HK is still continuing. The global macro is obviously affected by what’s going on there. Western mass media have been trying to explain it in accordance with clichés such as “democracy vs. communism” and the majority of us seems to believe that. Nevertheless, there are some essential points you may not forget in this context as follows:

First of all, the government of PRC already agreed with the City of London on endorsing the latter’s idea to abandon HK as one of the most important financial centres in Asia. Click this URL and study what’s declared in the paper. In order to celebrate publishing of this paper, the Chatham House held a seminar in Shanghai jointly with the CEIBS.  I personally attended the seminar and this is why I know the importance of this paper.  Even a high-ranking official of the US Treasury was also there.

In this paper, the City of London strongly doubts the future of HK as Asia’s financial centre. Instead, the City clearly prefers Shanghai with Beijing as the political decision motor of PRC. The National Development and Reform Committee picked up this idea and reaffirmed it in 2009. Now, you see a joint venture among PRC, the City of London and even US for the sake of Shanghai.

To reinforce the project, the current financial centres in this region must be kicked out. This is the hidden agenda of the self-proclaimed “student power” in HK.  Besides HK, the Singaporean have been also struggling to survive.

Secondly, you might believe the tragedy of the Tinanmen Square will never be repeated in HK, since the People’s Liberation Army isn’t officially stationed there.

To tell the truth, the uprising will easily be repressed by PLA in an instant. One of its most important headquarters is located in Shenzhen, even though it’s given a false name of cultural institution. Once the leadership of PRC will make up its mind, HK will be automatically the second Tinanmen Square. At this stage, the self-proclaimed student power, which is partly supported by financial assistance of USG, can’t dream of its historical victory.

IF THE STUDENT PROTEST WILL BE OVERWHELMED BY THE CENTRAL GOVERMENT AND PLA ON THIS WEEKEND, THE WORLD’S FINANCIAL MARKET WILL COLLAPSE DRAMATICALLY ON THE NEXT MONDAY. Amid the chaos ahead, you’ll have to consider in which direction the capital flight will go from HK: Shanghai? Singapore?? Or even Tokyo??

HK_chart

Last but not least, you may be still wondering why PRC agreed on replacing Asia’s financial centre from HK to Shanghai, even though HK must be very convenient for Beijing’s leadership.

Please don’t forget it’s not the government of PRC but traditional human network of transboundary Chinese powerful houses that matter. The latter’s centre was located in Taiwan and is situated in Yunnan Province, which is, of course, never disclosed to the public. Any official or western state power is capable of getting control over it, while the Japan’s hard core has been closely related to the network. During the WWII, USG called Japan “a black dragon society”.  Yes, “dragon” is the symbol which connects members of this human network.

Anyway, the legendary age of HK will come to an end soon. Stay tuned.