Elaine Meinel Supkis
The Japanese game of weakening the currency of the world's #2 economy and #1 trade surplus is now beginning to backfire thanks to the ever-more powerful euro and the fact that China, by raising the value of the yuan versus the dollar, had made the yuan a popular currency with all countries bordering China and is spreading the yuan further and further while the yen hides in a dark hole and dies slowly. The suicide of the Liberal Party official involves him cheating Chinese peasants. Heh. And Japanese businesses needing to sell to Japanese are struggling to stay alive in a depression economy.
In East Asia, the cross-border flow of people has been increasing rapidly in recent years, especially out of China. One major driver of the swelling migration of people in the region is the Greater Mekong Subregion (GMS) development program, promoted by the Asian Development Bank (ADB). One key project under the program is aimed at rapidly building a network of roads connecting Myanmar (Burma), Laos, Thailand, Cambodia, Vietnam, Yunnan province and the Guangxi Zhuang Autonomous Region in China.
China has signed free trade agreements with the other countries involved in the GMS program after an aggressive diplomatic campaign. Income gaps between China's booming coastal areas and the less developed inland region are not showing any signs of narrowing, so there are strong incentives for Chinese living inland to move out of their villages and towns in search of better economic fortunes.
All these factors are generating a massive and constant flow of people from inland China into neighboring countries.
Oh ho! I have detailed over the last three years the busy, busy Chinese bees, Hu and Wen. We must pay attention to who is visiting when and where! I track this vital information via Xinhua news. The many trips of this dynamic duo have just begun to pay off as China opens roads and rail services to all its neighbors. They are increasing commerce everywhere and it isn't just governmental or top corporate interests, it is classic merchants doing classic business things: lots and lots of little business people working long hours to open businesses all over the place, frontier towns attracting the most dynamic of the peasant classes as they go forth to conquer capitalism by becoming capitalists!
The ways Japan and China are making inroads into the region are very different. Japanese investment and aid are usually invisible to ordinary people and flow directly into state coffers, banks and factories' vaults. The Chinese yuan, in contrast, is brought by Chinese to people in the region along with merchandise. For ordinary people in the region, settlements in yen or the creation of a yen bloc are more or less abstract concepts, and they probably find it hard to emotionally connect to these ideas. But the yuan is something quite familiar to them, and it is much easier for them to understand the use of the Chinese currency as an international currency like the dollar.
The Chinese currency is gradually penetrating the region as Chinese products and people are increasing their presence.
And wherever they go, they don't seek dollars, they use yuan! And why not? The dollar is WEAKENING vis a vis the yuan so only a very stupid person would want to collect dollars. And where a currency goes, there goes the neigborhood! Namely, the yuan is gaining popularity in lands that used to be filled with people wanting to do business in dollars! And this is important for the US needs to have the world soak up our excess $1.5 trillion in red ink we pour forth every year. If the Chinese decide to be very cruel, they might make the value of the yuan rise 40% versus the dollar. That will teach us a very sharp lesson.
And it will cause problems for Japan. The Japanese had to accept the idea the dollar was the supreme currency of Asia thanks to WWII and the Vietnam war. But now that is fading fast and Japan has been caught flat-footed. The Chinese fury over past insults led to the near destruction of trade just two years ago. Since then, the Japanese try to tone down their tendency to insult but this is barely below the surface if not totally open. The above article accuses the Chinese of being loud and pushy, for example.
Note: HAHAHA. The Japanese are this way, too. They just can't see themselves. Ditto the US population. Or Europeans. Everyone who thinks they are gods are pushy. I'm very pushy. Heh.
The Japanese prefer to use their money to leverage the officials running countries whereas much of the imputus for trade with all of China's neighbors is organic. The people themselves are creating it.
A slain former executive of a farm association had forced Chinese trainees to pay sizable fees that had already been covered by the farmers who accepted the trainees, sources said.
The funds provided by the trainees remain largely unaccounted for, they added.
Most of about 150 Chinese workers on a farm training program offered by the Chiba Agriculture Association had paid between 40,000 yuan and 110,000 yuan (about 600,000 yen and 1.65 million yen) under the pretext of training fees and travel expenses, according to a survey conducted by the association.
"The system whose initial purpose is to transfer technologies to developing countries is being exploited as a juicy business," Ippei Torii, general secretary of Zentoitsu Workers Union, which supports foreign workers, said of the foreign trainee-intern system.
Why would Chinese workers pay the astonishing amount of $12,000 for a chance of learning Japanese farming methods?
Looking at what the preferred modus operandi of Chinese peasants, it is to open small businesses inside of neighboring countries, isn't it? And so, since Japan is ripe for such business since the Japanese government keeps out competition for the most part, and since wages have suffered hideously the last few years, people rush to stores selling stuff cheap! And Japan is notorious for not letting in anyone at all which is why they are in trouble on so many levels with a dropping population.
The Liberal party is utterly corrupt. It is owned by the businessmen who run Japan and they have only one thing in mind: to extend their financial and industrial empires. But the weakness of the Japanese home base is causing many problems as the other Asian nations rush to undersell Japan and Japanese businessmen are running around, outsourcing like mad because they dare not let even a breath of inflation enter the Japanese economic castle.
The Japanese system is so rotted, they can't even have the fiction of two parties anymore. It is more a one-party state than either China or Russia.
The consumer price index (CPI) for April, excluding perishable goods, dropped by 0.1 percent from a year ago, marking the third consecutive month of year-on-year decline, internal affairs ministry officials said Friday.
It stood at 99.9 against the base figure of 100 for 2005.
The margin of fall shrunk by 0.2 percentage point from the previous month, when the CPI fell 0.3 percent year on year.
The drop in prices was slowed in part by an end to discount airfare campaigns and a rise in health care costs such as medical fees, officials said.
Why are airlines discounting fares? Can they afford this? No? Heh. In every level, I smell a skunk when it comes to Japanese monetary policies.
Japan Airlines Corp. has asked its four major creditors to provide hundreds of billions of yen to bolster its capital base, sources said.
The four banks, including the Development Bank of Japan and Mizuho Corporate Bank, may require the struggling airline to carry out further restructuring, for example, by reducing its payroll costs, analysts said.
All over Japan, payrolls are being purged or reduced. Everyone is seeing cut backs and so business within Japan continues to shrink. Eventually, it will vanish, I suppose! If the Bank of Japan made the yen more valuable, Japanese people might be able to afford to fly to China and go shopping! But alas for them, they can't. So the Chinese get richer and the Japanese head towards the poorhouse.
I was chastized at other websites when I talked about the fake depression in Japan. Some writers assured me, things are great in Japan. But when I read the news or look at the data, it looks really bad for anyone who isn't part of the Liberal Party's ruling elites and even they are committing suicide after yenning and yuanning everyone to death.
Scandal-plagued electronics maker Sanyo said Monday it trimmed its losses for the fiscal year and forecast a return to profit for the current year as it cut costs.
Sanyo Electric Co. (nasdaq: SANYY - news - people ) has undergone a reshuffle at its top management after acknowledging recently it had falsified its fiscal 2003 earnings, in which it had reported a profit but could have been in the red.
With a loss of 45.4 billion yen ($373 million) for the fiscal year through March, Sanyo has now posted losses for the three years running. But that was better than the 205.7 billion yen loss the previous year.
Sanyo sells not only globally but locally. And this is why starving one's homebase is so stupid. The foundation of any business must be their homebase! From that platform, they can move outwards. If having a super-cheap currency were so great, why don't all nations simply charge 0% interest and print money like mad? The Japanese, in chosing this path, have enjoyed significant success but only against one party, the US giant. And the logic of the system is now beginnning to show: the dollar is now becoming as worthless as the stupid yen. The world's two top nations can't both have a dead currency at the same time!
And this is where shifting gears matters. The euro at first wanted to be weak so they could penetrate American markets but now, the European market is big enough, they don't need the dollar or the dumb Americans! The pie charts from the BBC in my earlier posting today shows clearly that the US share of world trade is being squeezed by both the European Union and China.
Since the mid-20th century, the de facto world currency has been the United States dollar. According to Robert Gilpin in Global Political Economy: Understanding the International Economic Order (2001): "Somewhere between 40 and 60 percent of international financial transactions are denominated in dollars. For decades the dollar has also been the world's principle reserve currency; in 1996, the dollar accounted for approximately two-thirds of the world's foreign exchange reserves"
As of December 2006, the euro surpassed the dollar in the combined value of cash in circulation. The value of euro notes in circulation has risen to more than €610 billion, equivalent to US$800 billion at the exchange rates at this time.
Funny, isn't it? The euro's growth in circulation echoes the growth in the American trade deficits. I bet this harmonic relationship isn't accidental. The fact that the US has lost control of half of its currency is significant. I know where that money is hiding! Go to the International Monetary Fund and you can see a lot of this is being held in FOREX reserves so big nations can control the fate of the US economy and currency! And suspicions rise rapidly, seeing that Japan is the #2 holder of American script. The US, in turn, holds a mere $12 billion yen to Japan's $900 billions in dollars. This unequal relationship is due to Americans wanting to betray us to the Japanese who still smart from their defeat in WWII.
And how do I know this? Simple. They won't pay reparations to the people they enslaved and murdered and the leaders worship the war criminals we executed. 'Nuff said.