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Devil's Prophecy, Jan. 2022

- The approaching crisis of Japan -

Cat: ECO
Pub: 2022
#: 2202

Masaru Kaneko (金子 勝)


Devils's Prophecy, Jan. 2022

悪魔の予言 (2022年1月)

  1. Introduction:
  2. Raging price increases begin:
  3. Risks of Japanese economy in the first half of 2022 - Minefields:
  4. Future G-bond issuance:
  5. What Japan should do in the near future:
  6. The birth of the calculus:
  1. 序文:
  2. 怒涛の値上げが始まる:
  3. 2022年前半の日本経済のリスク-地雷原
  4. 今後の国債発行:
  5. 今後日本がなすべきこと:
  6. NNNN:
; ; ; Basis swap; ; Debt trap; ; ; Negative interest rate; ; ; Stealth increase; Stealth tapering; ; Zero-zero loan;

>Top 0. Introduction:

  • Beginning 2022: Masaru Kaneko, an economist, warns of the coming economic crisis in Japan.

0. 序文:

  • 2022年初: 経済学者金子勝が、迫る日本経済の危機を警鐘

>Top 1. Raging price increases begin:

  • From
  • the end of 2021 to the beginning of 2022, consumer prices for daily necessaities will continue to rise; such as mayonnaise, bread, coffee, jam, pasta, ramen, frozen foods, fish products, hams and sausages, soy sauce, potato chips, stationery, aluminium foil, sanitary goods, etc.
  • Stealth price up" goes on, reducing volume of the content.
    • Consumer price index alread up 0.6% in Nov. 2021 statistics.
  • Corporae price index (=price of purchase of materials) has areadey shown 9% up.

1. 怒涛の値上げが始まる:

  • 2021末から2022年初にかけて生活用品の値上げが続く。
    • マヨネーズ、パン、コーヒー、ジャム、パスタ、ラーメン、冷凍食品、魚肉製品、ハム・ソーセージ、醤油、ポテトチップ、文具、アルミフォイル、衛生用品
    • ステルスの値上げ: 内容量削減
    • 消費者物価指数は、2021/11データですでに0.6%UP
    • 企業物価指数 (仕入物価)は、約9%UP

>Top 2. Risks of the Japanese economy in the first half of 2022 - Minefields:

  • Many Japanese corporate excecutives are still optimistic about the 2022 economic outlook of Japan. It should be important to look at risks straightly and how to draw a bright secenario considering such risk factors.
  • Minefielsd - risk factors:
    • Jan-Feb: Covid-19 6th wave of pandemic as well as progress of stagflation.
    • Mar: the annual spring labor wage negotiation will be unseccessfull.
    • Mar-Jun: Drastic reduce of monetary easing, and increase of interest rate.
      →Widening of interest rate difference betwen US and Japan.
      →Further depreciation of yen, causing import inflation
    • Apr: The effect of redcuing mobile phone charges disapperas.
      →acheved comsumer price index 2% up (due to unexpected macro ploicy)
      →will reveal the collapse of monetary poliby of BOJ.
    • Jun: Re-raise of interest rate of US Fed.
    • Jul: Election of Japanese House of Councilors
  • After the result of rise of comsumer's price:
    • If BOJ raises the interest rate, then:
      →Expansion of Government-bond costs
      →Damage to the value of G-bonds held by BOJ
      →may cause burst of the bubble,
      →may cause fisacl andd financial paralysis
    • If BOJ could not raise the interest rate, then:
      →Widening interest rae differencee between US and Japan.
      →may cause further depreciation of yen.
      →may cause rsisin import prices.
      →may cause advere impact on individuals and SMEs.
    • If US Fed raises US interest rate:
      →may cause falling in stock prices and reas estate prices
      →may cause further progress of depreciation of yen.
      →may cause burst of the bubble economy
      →may cause crisis of SMEs dependent on the borrowing money.
  • <Fig.> 2022 Japanese national budget:
    • If the interest rate rises by 1%, G-bond expense will increase by 10 trillion yen, equivalent to the double of the present defense budget.
    • When the nteres rate rises, the price of G-bond falls down.
      →may cause depreciation of the value of G-bond held by BOJ (now 400-600 T¥)
      →may cause averse impact on the equity capital of BOJ (now 9 T¥)
      →may cause deline of the creditworthiness of BOJ.
      →may cause deterioration of Yen note (issued by BOJ)
    • If the intgerfestg rate raise, the burst of bubble economy occurs.
      →may cause scrifice sales of due to overburden of the interst rate.
      →may cause economic stagnation.
      →may reveal the failuire of Abenomics, accumulating G-bond issue up to 1000 T¥.
    • >Top BOJ has promoted so-called zero-zero loan for SMEs. (with zero interest and zero secured loan); this policy had been forbidden as the central bank (as releaf measures agains corona virus)
      →Tokyo Shoko Research reports that Japanese SMEs shows with decreased sales and increased profits, being more dependent on loans.
      →may cause further increase of voluntary retirement, and reduction of labor costs, and fixed costs for survival of SMEs.
      →may cause increase of the monthly sales to borrowing ratio.
      →may cause increase of bankruptcy due to risins cost of the raw materials.
      →may cause almost 60-70% of SMEs are in deficit.
  • Stupid policy of Kishda Cabint's supplementary budget:
    • →Cast handout (100K yen) for younger generations
      →Subdidy for gasonlice price
      →Further reduction of corporate tax when increased the salary payment.
  • >Top Supporting Japanese economy by huge G-bond issuance through the negative interest rate mechanism.
    • Negative interest rate mechanism: fees ae charged for balance of the privatre banks' current account in BOJ
      • G-bond (10-year bond) are alittle plus interest, but shorter G-bonds are minus interest (almost -0.1%)
      • The burden of BOJ to cover the negaive interest rate is about 2T¥, and the cumulative total is about 12.3 T¥.
    • In reality, private banks do not bear the negative interst rates; the interest rate si the total of the basic balance rare 0.1% + the macroscopical additional balance 0%.
    • Actually, the mechanism when G-bond interest rate become negative is such that BOJ pays 110 valued G-bond with a par value of 100 at maturity date; thus meaing 10 value loss at the maturity date.
      →On the other hand, J-Government earns 110 income fro selling the G-bond with a face value of 100.
      →If and when the negative ingterest rate become to the positive it will be a double burden of the sume of decreasing income + increase of interest rate.
      →MOF already estimated such loss will be 0.8 T¥ in the first year, 3 T ¥ in the second, 3.8 T¥ in the third, then will be 10 T¥ in 5-6 years; this is the 'Debt Trap'.
    • Since the nominal value is less than the book value by the negative interest, foregin investors and BOJ buy the G-bonds; Japanese government earns income without paying interest such as J-Gove earns 110 value from G-bonds having the nominal valu of 100.
    • However, when the interest rates rises, the G-bond costs will expand.
  • Fund-raising of BOJ:
    • >Top BOJ prepared funds for the second stage supplementary budget in 2020: 212.e T¥ by G-bonds:
      • 39% by short-term G-bond (3 months, negative rate): 82.5 T¥
      • 29% by medium-term G-bond: 61.2 T¥
      • about 70% of short-term G-bonds are bought by foreign investors.
      • The Basis Swap trading method makes money by the interest rate difference between US TB and Japanese negative interest rate.
  • BOB's Purchase of G-bonds (2021/12/20):
    • Long-term G-bonds: 505.5 T¥
    • Nominal value of G-bonds: 493.1 T¥
    • Book value - Nominal value: 12.4 T¥
      →BOJ bears the burden of G-bond cost.
    • If the global supply chain is fragmented due to the corona pandemic, exports cannot increse even if the yen is depreciated, wile the imports will increase.
  • When the consumer price index reached 2%:
    • What was the inflation target of 2% aimed within two years from Apr. 2013?
    • How the reflationists will lift monetary easing policy once they achieve it? Or, do they admit that it was just a fund-rasing to cover the fince deficit?
    • What about the MMT suporters who said to raise taax when the inflation attains about 2%?
      • or what about the policies for; 1)the job gurarantte program, 2) economic improvement including disparity correctioon?
      • or do they abandon the Keynesian anti-circulation policty?
    • What would be the possible bankruptcy of the control tower of macro policy?
  • Historical fiscal spending without tax increase:
    • Money recoinage: eventually caused destruction of the Roman Empire.
    • Credit money (particularly banknotes) is secured by the credit ot the government and the central bank.
      • subject to hyperinflation rarely occures.
      • only exceptions; Germany and Japan after the war, Russia, Turkey, etc.
    • However, there wold be medium crisis happening senario:
      • Expansion of G-bond cost, causing financial crisis (Debt trap).
      • Currenct depreciation, causing import inflation.
      • Monetary easing, causing bubble and its collapse.

2. 2022年前半の日本経済のリスク-地雷原:

  • 多くの日本の経営者は、2022の景気見通しをまだ楽観視
    • 本来はリスクをどう見極めて明るいシナリオを描くかが重要
  • 地雷原:
    • 1-2月:物価高騰
    • 1-2月:コロナ第6波感染拡大とスタグフレーション
    • 3月春闘不発、賃上へ法人財減税も不発
    • 3-6月頃金融緩和大幅縮小または金利引上げ
    • 4月: 携帯料金値下げ効果の消滅
      →物価目標2%UP達成 (マクロ政策の想定外)
    • 6月 米国FRBは再び金利引上げ
    • 7月 参議院選挙
  • 物価高騰の結果:
    • 金利引上げ
    • 日本の金利上げられない」
    • 米国金利上昇
      →株価・不動産価格下落 (バブル崩壊)
  • 2022 国家予算:
  • 金利1%UPすると国債費10兆円増加=防衛費の2倍
  • 金利UPすると国債価格下落
  • 金利UPするとバブル崩壊が起こる
  • 一方で、世界の中央銀行はインフレ抑制のために金利UPする。
  • 日銀による中小企業向けゼロゼロ融資(無利子無担保)
    中央銀行としては禁じ手 (コロナ対策)
    →140兆円 (前年比+90兆円)
  • 減収増益と借金依存の中小企業 (東京商工リサーチ)
  • 岸田内閣の補正予算は愚策:
  • マイナス金利の仕組みによる国債発行でようやく経済をもたせている:
    • マイナス金利の仕組み: 当座預金に手数料をとる
      • 10年債はちょっと+だがそれ以外はほぼ-0.1%金利
      • 日銀の負担は約2兆円/年で、累積12.3兆円
    • 実際には民間銀行はマイナス金利を負担していない
      • 基礎残高0.1%+マクロ加算残高 0%
      • 実際には国債をマイナス金利にする。日銀は満期で額面100の国債を110で支払う方式。満期になると-10。
        →財務省試算では、1年目0.8兆、2年目3兆→3年目3.8兆→5〜6年で10兆円増→財政破綻 (Debt trap)
    • 額面価格<帳簿価格なので、外国投資家や日銀が国債を買取る→政府は利払いせずに収入→政府は額面100の国債で110の収入が得られる。
    • 金利を上げると一層国債費が膨張
  • 日銀の資金調達
    • 2020年度の2次補正段階: 212.3兆円の国債
      • 39%: 短期債(3ヶ月もの; -金利) 82.5兆円
      • 29%: 中期債 61.2兆円
    • 短期債の約70%は外国人投資家が購入
    • ベーシス・スワップ (Basis Swap)という取引手法
      • 日米金利差+マイナス金利のTBで儲ける
  • 日銀による国債購入: (2021/12/20)
    • 長期国債: 505.5兆円
    • 国債の額面価格: 493.1兆円
    • 帳簿価格ー額面時価: 12.4兆円
    • 政府の国債費負担を日銀が肩代わり
  • サプライチェーンがグローバル化しているので、コロナ禍で寸断化されると円安でも輸出増ができないばかり、輸入増に拍車かかる。
  • 消費者物価上昇率が2%に到達すると
    • 2013/4の2年で2%の物価上昇目標を掲げたことは?
    • MMT派でも2%位になった(大企業)増税するはず
      →Jobs guarantee program (低所得者雇用プログラム)
    • マクロ政策の司令塔の破綻?
  • 増税なしの財政支出:
    • 貨幣改鋳→ローマ帝国の滅亡
    • 信用貨幣(紙幣)は政府・中央銀行の信用が担保
    • 中間的には危機発現シナリオがある。
      →国債費膨張と財政危機 (Debt trap)

>Top 3. Future G-bond issuance:

  • Can G-bond be issued indefinitely?
    • Yes, because Japanese have enough private saving.
      • However, the saving rate declines due to aging society.
      • Corporate internal reserves will peak out due to reducing competitiveness.
    • Yes, because we do not depend of foreign capital (current balance shows surplus)
      • However, the trade balance has become in deficit (after the Lehman shock)
      • Also losing in major industrial competitiveness; such as semiconductor, IT, electronics, and even automobiles are dangerous.)
      • These trends cause the current balance of payments could not become surplus.
    • Yes, because we have abundant foreign currency reserves (US Treasury bond)
      • However, we cannot sell it, because it it the base of creditworthiness of Japanese G-bond.
      • When we sell it in short-term, the value of US TB will fall and the interest rate will rise.
      • When we sell it gradually in medium term, the dollar standard system will be unstable.
      • And if it continues, it will be a diplomatic problem between US and Japan.
    • There are no historical examples of such enormous amount of issuance of G-bonds.
      • In 18C UK accumulated G-bond debt double of its GDP as the results of the continuous mercantilism wars with Spain, France, and Netherlands.
      • But after that UK created the Industrial Revolution, and acquired colonies around the world.
      • Even though, UK spent could over 100 years to eliminate the G-bond.
      • Such accumulation of G-bond debt seems like the third generation top of bankrupt company.
      • And if the interest rate is raised, that will cause the financial collapse.
  • >Top Is Stealth Tapering true?
    • Is there hidden reduction of monetary easing?
      • Pay attention to short-term G-bond, rather than long-term G-bond.
      • This is a kind of bicycle operation; depending on short-term bond with negative interest rate.
    • "BOJ 10-Days Report" (>Fig.) indicates that; only loan to SMEs increases.
      • Emergent measure since 2020/4 to prevent SMEs due to corona pandemic.
      • SMEs showed increase in profit even decreasing situation of sales.
      • caused SMEs to reduce labor cost and fixed cost.
      • still increasing possible bankruptcy due to increase of monthly borrowing ration.
      • may cause private lending banks to increase bad loans.
      • Does this situation make SMEs to withstand rising prices and burst of the bubble economy?
      • Most of media does not report properly this risk.

3. 今後の国債発行:

  • 国債は無限に発行できるのか?
    • 民間貯蓄がある
    • 外資に依存しない (経常収支が黒字)
      →すでに貿易収支は赤字基調 (リーマンショック以降)
    • 潤沢な外貨準備 (米国国債)
      →売るに売れない外貨準備 (日本国債の信用度に影響)
    • 1000兆円もの国債を累積させた歴史的なツケ
  • ステルステーパリング(Stealth tapering)は本当か?
    • 隠れた金融緩和縮小?
      →自転車操業用: マイナス金利の短期債依存
    • 日銀報告: <下図>貸付金だけ増加する
      →中央銀行が倒産危機の中小企業を支える非常事態 (2020/4-)
      →減収増益: 売上が減るのに利益増加
    • 物価上昇やバブル崩壊に耐えられるか
    • メディアもこのリスクを報道しない

>Top 4. What Japan should do in the near future?

  • What to do for the time being:
    • Those who cannot survive without wage increase.
      • Set of wage increase and corporate tax reduction will not work.
        →additional excessive tax on the excessive retained internal earnings is more effective to raise wages.
      • Cash handout (¥100K) under 18-year old.
        →effective benefits for working poor
        →this benefits will be mostly consumed.
    • Price control measures:
      • Guarantee of price pass-trough for SMEs
        →monitoring of large companies by JFTC (Japan Fair Trade Commission)
      • 2% consumption tax reduction
        →Should pursue consensus, and be done as the temporary measures.
    • Change of the industrial structure and social system.
      • to make more resilient economy and social system.
        →to minimize external impact of fossil oil and imports of foods.
        →to promote more renewable energy and increase food self-sufficiency ratio.
        →to prevent deterioration of the trade balance even if exports decline.
      • to break away from export-led economy relying on yen depreciation and wage cuts.
        →recover thicker domestic demand
        →incorporate advanced technology ares using ICT.
      • to remove the rule of hereditary foolish leaders.
        →to expand the range of democracy
        →to improve political system, to strengthen local government and NPOs.
        →to establish regional distributed networked type of economy.

4. 今後、日本がなすべきこと

  • 当面何をなすべきか:
    • 賃上げがないと生きていけない層
      • 賃上げ法人税減税は効かない
      • 18歳以下の10万円給付
    • 物価抑制政策
      • 中小企業の価格転嫁保証
      • 2%消費税減税
  • 産業構造と社会システムを変える
    • 体外ショックに強い経済と社会システム
    • 円安と賃下げに依存する輸出主導経済の脱却
    • 世襲愚者の支配を防ぐ

>Top 5. NNNN:

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