Quote note (#111)

SoBL on the next stage for Japan:

The Japanese had their forty-first straight month of trade deficits. This is the problem when a nation imports raw materials and energy and exports finished goods in a world of sluggish demand. The Japanese are one of the export dollar recyclers. They are not reliable anymore, which might be why tiny Belgium holds hundreds of billions of US Treasuries now. The Japanese are now moving to invest more abroad, but curiously, they are not investing in hot spots like China but instead in America. The Japanese are investing in US insurance companies as a proxy for investing directly in the US. They want to use insurance companies as a way to learn about the US market more before digging in deeper. This is beyond direct purchases of manufacturing firms and what not. They did this in the ’80s when Japanese automakers partnered with US firms to learn the psychology of the US worker as they then invested in US sitused plants.

At the core of all of this is finding ways to earn non-yen denominated revenue. Currency diversification to prepare for a domestic shock. They are preparing for the devaluing of the yen, and they expect it to happen to the yen first and the dollar later. Many have bet against the yen and lost, including recently Kyle Bass, but if the Japanese themselves are starting to bail, the end must be approaching. It is an interesting island culture shaping up. Greying and shrinking population, growing robotics industry, worlds’ largest creditor nation with trillions in net assets, “xenophobic” immigration policy, shrinking working population… it is like they are setting up an island of a homogenous, rentier class.

If this analysis is correct, it suggests that Japanese capital is set to become a major resource for world-wide trends with an NRx (anti-demotic propertarian) orientation. Sustaining foreign investment revenue streams will become an existential necessity for a grayed Japan, which is enough to establish a definite agenda regarding governance models in the functional fragments of the world system.

Does a ‘rentier nation’ spontaneously produce a Neocameral geopolitical entity?

September 22, 2014admin 13 Comments »
FILED UNDER :Political economy

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13 Responses to this entry

  • Erebus Says:

    I spend several months out of every year in Japan. My own opinion is simply that the Japanese are investing in US insurance companies because it’s immensely profitable in Japan. Selling insurance to Chinese farmers in Henan province is a bad bet, whereas the USA is almost as orderly and as predictable as Japan itself. It’s therefore a good market for them to branch-out into. That simple.

    Case in point: Sony is well-known as an electronics company, but it’s primarily a life-insurance company in Japan. http://www.nytimes.com/2013/05/28/business/global/sonys-bread-and-butter-its-not-electronics.html?pagewanted=all&_r=0

    The financial services sector in Japan is a lot more staid and traditional than the circus over by Wall St. and the City of London. Insurance and ‘traditional banking’ take center stage.

    I think that SoBL’s analysis is based upon a flawed premise. That the Japanese “want to use insurance companies as a way to learn about the US market more before digging in deeper.” I see no good evidence of this. To the contrary, they appear to be making overtures at India and Africa, right on China’s heels. Manufacturing in the USA? Snatching up American businesses? That would be ridiculous.

    Aside: The “xenophobic” immigration policy is something the Japanese won’t give up easily. Already the tone of public opinion is (overtly or covertly) hostile to the Korean and Chinese immigrants present in Japan.
    …But the Cathedral is working on it. They tried to pressure Japan into accepting 10k immigrants from Africa. They keep trying to shame Japan into accepting more immigrants from SE Asia. And the ‘It Girl’ that they’re now trying to push onto the Japanese masses, called ‘Rola’, is a Bangladeshi/Russian with a mere trace of Japanese ancestry.


    Kgaard Reply:

    I second this response. Insurance is a great business if you aren’t extremely familiar with the overall economy (and don’t speak the language). I love emerging market insurance companies, for instance. You basically get the nominal yield on T-bonds plus growth in line with nominal GDP growth (at least). So, as long as you don’t get clipped by devaluation you make double-digit returns every year. The math is different in the US because nominal GDP and interest rates both are lower so it’s more about the insurance companies’ acuity in investing in corporate bonds and stocks. (Running the actual insurance company is, in nearly every instance, just a way to gather assets to invest at little or no cost to the insurer.)


    Erebus Reply:

    Right. The Japanese are investing in foreign insurance companies simply because insurance is a good business — and a real cash-cow in Japan. It’s something they understand, something they’re good at, and something that’s generally very profitable in all orderly and predictable societies. I don’t believe that there is any deeper motive. And broader Japanese investment in the USA, under present circumstances, does not seem primed for expansion. To the contrary, perhaps…

    Japan and China are actively competing for investment opportunities in India, Southeast Asia, and Africa. Both countries are attempting to expand their spheres of influence. It would perhaps be an understatement to say that it looks like China has the upper hand at the moment — but Japan is pushing China, and it’s a credible competitor.

    All that said, it’s very true to suggest that Japanese society is favorably inclined towards NRx ideals. In certain ways, it’s far better and truer than Hong Kong and Singapore. It’s rooted in a cultural tradition that is broadly honored and valued among the Japanese. A tradition almost reminiscent of “Blood and Soil”: A strong Japan for ethnic Japanese, vigorous government support of small farmers and craftsmen, the preservation of rural regions, maintenance of cultural and artistic continuity, etc.


    Kgaard Reply:

    Agree on all points. I was blown away on my first trip to Tokyo. It is like the US in the 1950s. It’s so far back in time in some ways it’s PRE-Mad Men …

    Posted on September 22nd, 2014 at 5:54 pm Reply | Quote
  • Quote note (#111) | Reaction Times Says:

    […] Source: Outside In […]

    Posted on September 22nd, 2014 at 8:11 pm Reply | Quote
  • spandrell Says:

    What the hell? How is Japan supposed to enforce their foreign contracts? With nukes they don’t have, and young soldiers they aren’t breeding?

    It is interesting that Japan is preferring to go on burning foreign reserves rather than start again the nuclear power stations and stop importing gas from Qatar, which is what’s causing the trade deficit.

    Btw Rola isn’t a Cathedral stooge. She’s popular because she’s hot and stupid, and because she knows to suck the dicks of showbiz dons. Japan showbiz has a long story of having foreigners on show. It’s their version of a circus.


    admin Reply:

    “How is Japan supposed to enforce their foreign contracts?” — by investing in foreign regimes that establish credibility as protectors of hard property rights. I’d be surprised if this wasn’t already happening. If enough global capital indicates real (‘revealed’) preference for NRx-style voice-reductive business-oriented government, it generates effective incentives for shifts in that direction.


    Erebus Reply:

    Re: “Young Soldiers they aren’t breeding”


    Japan’s military is surprisingly strong. And this despite the fact that it’s a “self-defence force” and that it has been de-clawed and de-fanged by externally-imposed, and then self-imposed, restrictions.

    As you must be aware, Japan is in the process of changing their constitution, and loosening those restrictions on its military and related industries. They’ve also just embarked on a recruiting campaign. (Curiously, and I’ve seen this for myself on poster-boards and recruitment office windows in rural Japanese towns, the posters are in English! https://www.recruiter.com/i/this-is-one-very-weird-recruitment-poster/)

    Also, as you must be aware, modern wars between countries are essentially won with technology, with applied material sciences — and very few nations do that better than the Japanese. If they put their minds to it, within a decade they could put together a military force to rival any nation. And it’s not as though they’re lacking in nuclear material, either.

    And I’d argue that Rola is a cathedral stooge. I’m well aware of the way they portray immigrants like Bobby Ologun on variety shows. Rola, on the other hand, is not presented as something less-than-human, something to be mocked. She’s a rather “desirable emblem of multiculturalism” — and it’s no secret how badly the West wants Japan to get with the program in that regard.


    Posted on September 23rd, 2014 at 7:22 am Reply | Quote
  • Kgaard Says:

    Actually the basic thesis of the SoBL post is wrong. His implication is that the weak yen is bad for Japan. Show that to the data on bank lending or corporate profits. Domestic investment is likely to go UP, not down, as the yen weakens because yen weakness is undoing the BoJ’s previous deflationary error. I know we’ve been down this road before but it’s worth pointing out. My favorite theme in the world is long Japan. Though not long retailers, which obviously are going to get clipped over time by population decline (and retailers don’t benefit from quantitative easing or yen weakness).

    That said, I’m really just referring to the stock market (and specific parts of it at that). I do agree that Japan has a serious demographic problem and its people are getting more and more socially warped. It’s the mouse utopia experiments writ large, seems to me …


    Posted on September 23rd, 2014 at 7:37 am Reply | Quote
  • SGW Says:

    I personally have little hope for such a thing. but perhaps Japan will be different from all the other states that found themselves in a comparable situation, due to their elite being more loyal. Fingleton has written a good article on Japanese lobbying activity in the 80s, so at least we know that they have the ability and will to lobby effectively. The findings of the article basically mirrors what we already know of the workings of the cathedral, but I found it interesting nonetheless, since it contains quite a lot of specific information.

    The article in question: http://www.unsustainable.org/index.asp?type=article&contentID=15.


    Antisthenes Reply:

    Social Gaijin Warrior?


    Posted on September 23rd, 2014 at 8:26 am Reply | Quote
  • J Says:

    The idea that Japan is preparing to become a rentier island nation is baseless. It is and will continue being a very productive industrial economy. Like most successful economies, it has accumulated large foreign exchange reserves that have to be invested somewhere. China and Japan are buying mostly American bonds that yield nothing, but will be honored.

    On the other hand, while America is ready to play the global policeman role, there is no need for Japan to maintain an expeditionary force (like the old British Navy) to enforce foreign contracts and debts. Look at the Argentine defaulted bonds case: Judge Thomas Griesa is enforcing them. America and its allies have a global enforcement power, and it protects (thanks God) all of us.


    Posted on September 23rd, 2014 at 3:50 pm Reply | Quote
  • Barnabas Says:

    Emma Watson nude pics hoax was a SJW false flag against 4chan.


    Posted on September 24th, 2014 at 2:09 pm Reply | Quote

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