Japan's Abe rises as the latest symbol of global mood change

 The Telegraph recently reported on the rise of Shinzo Abe as new Prime Minister of Japan.

This is a very significant story.  The Telegraph article focus on Abe's promise to print endless amounts of money in order to get Japan out of its economic funk but the larger picture goes well beyond money printing.  In fact, it appears to be a page right out of Prechter:
•    The credit has run out.
•    The social mood is souring (rapidly).
•    It leads to dark activities on a large scale including a return to nationalism, racism.
•    Central banks lose independence to government who use the money supply to achieve political goals, something it was never intended for.
•    Leaders turn to war as a means of economic stimulus.


And so here we have Japan’s new leader, Abe, who is going to “fix” Japan’s 25 year plus credit deflation problem (AKA "avoidance of a declaration of obvious bankruptcy") by printing unlimited money.  Japanese people voted this guy into office handily so we have to keep in mind that he is the walking, talking will of the Japanese people.  Japan’s debt is now 235% of GDP and climbing.  According to Mauldin, no country in the history of man has ever exceeded 250% without experiencing some form of major collapse.

What is bringing matters to a head is that Japan’s no longer a net exporter.  This comes as a blow to a country whose sense of nationalistic pride hinges on being super-productive.  Unfortunately, the damage goes beyond bruised pride.  It also means that Japan can no longer count on excess earnings from exports to fund the service on their debt.  I'm not jut talking about government debt here.  I'm talking about debt of their largest employers like Toyota which now stands at $149 billion whereas cash on hand is less than $40 billion.  Japan will enter the teeth of a debt death spiral in the next few years and everyone knows it.  It appears they will not go quietly and that could be bad news for everyone.

As a result of this new revelation, a “new Japan” is forming and it will be a big change.  Their new leader is calling for a larger military.  He is calling for a release from the slavery of post WW2.   Abe’s grandfather was indicted but not convicted as a war criminal.  He first apologized for and then later denied that Japan committed WW2 atrocities against China and other neighbor countries including the taking of their women into forced prostitution camps known as “comfort stations” for Japanese soldiers.  I take such wild swings in sentiment to mean that he is a man that has no moral compass of his own.  People that do this sort of thing will do whatever it takes to stay in power.  Sadly, he doesn't appear to even know how to read his own people.  It means we should expect to see erratic behavior from him as he flops around trying to figure out what to do to buy himself the most votes.

China recently ventured into the airspace claimed by Japan over the Senkaku Islands whose ownership is disputed between Japan and China.  The transgression was purposeful but it was done in a small propeller plane.  Japan’s response was to send in a flight of eight (8) F-15 fighter jets.  This comes not long after China pushed Japan out of the #2 spot in the world economic hierarchy.  Anyone who thinks Japan is a)happy about that b)willing to live with it is c)razy.  Japan believes that it deserves a higher station in the global pecking order but it's banks sold its people down the river 25 years ago and it has not recovered because the banks will not admit bankruptcy and instead live on with government assistance as "zombie banks" which exist for the benefit of the bank employees instead of for the people of the country.  Government will not lose face and simply admit the truth.  It is easier for them to blame everyone else.  And so that is what we will get.

The global debt Ponzi is rolling over folks.  It always had to do so at some point even though it was not always easy for many people to envision.  In fact, it might still be hard for many to envision. Unfortunately, the fact is that now every single government in the world is bankrupt (in such debt that it can never be honestly repaid) and doing its utmost to not admit it.  That means the lying and corruption is becoming more obvious, more blatant each day.  Even though everyone is doing it, everyone will point at everyone else’s transgressions as justification to either defend oneself or to attack.

Keep an eye on Shinzo Abe.  Look in his eyes.  There's something brewing in there and I don't think it's the morning coffee.