Elaine Meinel Supkis
Asia continues to surge ahead despite the obvious signs of recession in the West. Thanks to continuing high energy costs, the imports from lower-cost countries will continue to boom until the buying virtually ceases in Europe and the US. China jumps one hurdle after another, the latest being the investment in research and science. China is now #2, the US is still #1 but this is mostly because we still attract Chinese scientists. The Japanese reliance of a super-weak yen may have brought market share but the price for this continues to worsen its position vis a vis China.
Japan Suggests U.S. F-22A Export Ban To Affect New Fighter Choice
TOKYO (Kyodo)--Japan's top government spokesman indicated Thursday that a U.S. House of Representatives panel's decision to maintain a ban on the export of F-22A Raptor stealth fighter jets would affect Tokyo's selection of successor aircraft to the aging F-4EJ fighter fleet.
Our two value-added exports we have left are jets and military hardware. Both are tremendous value-added items. If we sold nuclear missiles, we could make a lot of money. But we don't want to lose power and as Mao said, 'Power grows out of the barrel of a gun.' Unless paying for these guns, one has to go to China for money. The US government has decided to not let anyone have the older stealth jets because we are afraid these would be sold to China who subsidizes our Pentagon spending via buying US bonds.
Instead of making iron-clad deals and then hoping Japan won't drop them, fear of Iran or Venezuela, the two next oil-rich nations we intend to invade, get them, we simply stopped selling the newer jets hoping to keep a monopoly on air power this way. Japan is very nervous about the restive dragon next door and is remilitarizing itself as much as possible. We also have a big trade deficit with Japan that is destroying our industrial base. Japan will now go to military manufacturing giant #2 for jets: Russia.
They need to make Russia happier or Russia will go to China for selling stuff like oil and natural gas. Russia's black gold is very close to Japan unlike Middle Eastern oil and thanks to Putin, it is politically much more stable than the Middle East. Japan has put all its eggs in the US basket these last 10 years and the eggs are about to break.
Asian indexes were mixed Thursday, with shares in China and Hong Kong setting intraday records after the Chinese government eased overseas investment limits for insurance companies, while Japanese shares declined as Advantest Corp. and Sharp Corp. fell sharply after reporting their quarterly results.
China's Shanghai Composite set an intraday record at 4,357.80 earlier in the session, then slipped back to 4,335.42, a gain of 0.3%. The Dow Jones China 88 index, a measure of 88 highly liquid stocks listed in Shanghai and Shenzhen, rose 0.2% to 373.32.
The gains came on reports that China's insurance regulator Wednesday tripled the percentage of assets that qualified investors can invest abroad to 15%.
The Japanese are trapped in their own dynamic schemes. They coasted along, happy as could be, at least the guys making the profits off of unequal trade with the US, for many years. They were content with banks unable to attract savings, just like the foolish US, they were content with a flat stock market that attracted no buyers abroad and they were content with destroying their own people's ability to purchase anything. All hail the Japanese depression! Banzai, sort of.
China is like the driver of a brand new race car. It is trying out the brakes, the accelerator, the steering wheel. It is driving faster and faster. The Japanese are trying to match the Chinese but they have deflated all their tires so their domestic economy suffers even as they floor the gas pedal. The end result will be Japan coming to a total stop if their export markets collapse. They always do this. The brief .com bubble pop hit the US economy but it hit Japan twice as hard! They didn't recover until the US dropped its own interest rates to 1%. All the charts I make or get from the Bank of Japan clearly show the rise and fall of Japan's economic health is moronically hitched to every glitch and glide in the US only amplified. Their highs are higher and their lows are much lower. This is a sign, their dependence on US exports is throwing their own domestic economy into wild swings.
China's debt rating was upgraded by Moody's Investors Service, citing the country's swelling foreign-currency reserves, surging exports and improvements to the banking system.
The country's long-term foreign-currency rating jumped to A1, the fifth-highest ranking, from A2, the ratings company said in a statement today.
``Official foreign exchange reserves continue to grow and now exceed $1.3 trillion, and external obligations of the government and state-owned banks are a small fraction of that sum,'' said Moody's Senior Vice President Tom Byrne. The performance of the export sector was ``formidable.''
China's trade surplus climbed 84 percent from a year earlier in the first half to $112.5 billion, escalating tensions with the U.S. and Europe and boosting currency reserves already at a world record. The nation has improved the strength and supervision of state-owned commercial banks, Moody's said today.
The US debt rating is still good because Moody is located here and they conspire with the ruling elites to lie about things. They lied utterly about the condition of those CDOs and tranche funds. Only now, after they are collapsing like Beyonce falling down the stairs while singing, have they regraded obvious dead dogs. So Moody is useful only if one is looking at China. Then they are critical and careful. Eventually, Chinese bonds will be stronger than US bonds simply because the Chinese are not killing their yuan unlike the dollar and the yen.
Indeed, the monetarist experiment with using currency relative values to control trade is not stabilizing the planet's economic systems, it is profoundly warping these systems. And the competition to destroy one's currency for trade advantage is destroying people's lives. Time to look at the Bank of Japan, the Black Economic Hole that is the center of this destruction.
Japan watches interest rates
Bank of Japan governor Toshihiko Fukui said yesterday he would be watching to see if the recent surge in long-term interest rates thwarts emerging expectations of a much-awaited economic recovery in Japan. Fukui also stressed the central bank was still "obliged to pursue monetary easing" to get the economy back on a sustained recovery path and overcome deflation. His comments came after the yield on the most-actively traded No. 252 10-year government bonds reached the highest levels since December 2000. The yield stood at barely above 0.40 percent just a few months ago. "The possibility of an economic recovery in Japan is strengthening ... in line with our scenario," Fukui said in a speech to a gathering in the central Japanese city of Nagoya, citing positive economic data and surging share prices.
Japan is heading downwards because the US is unmistakably going into a recession. Like all oil recessions, the US rushes out and buys non-gas guzzling cars. This stupid cycle of running off to buy these cars with every oil hike is an old story now. Gas drops in price=> US consumers buy gas guzzlers made in the USA because the gas tax here is very, very low, unlike Europe and Japan. Gas prices rise=> US consumers dump their gas guzzlers and buy Japanese cars. So at the start of all our big recessions caused by high oil prices, Japan booms tremendously. Then, after all the drivers who can afford a new car finally has their SUV parked in the side yard, sales collapse. I see a lot of gas misers on the road now. I see lots of gas guzzlers with cardboard 'For Sale' signs on front yards all over the place.
The dealers of used SUVs and trucks are dropping prices rapidly now.
Here is a chart from the Bank of Japan that they issued yesterday. It shows clearly how they crushed inflation that is raging across the planet but destroying the human resource costs in their businesses:
Normally, the cost of materials and labor are in tandem. But in 2003, they suddenly and TOTALLY diverge. The labor costs continue to fall and the material costs soar to the heavens. This divergence cannot continue much longer. It is having a big effect in Japan. Japan's domestic economy is collapsing even as there is a slight uptick in spending...on higher energy costs. Like in the US where our rulers boast that we have a strong economy due to more money being spent, this money is being spent on energy. I know that I am being hammered by this and I know all my neighbors are very troubled by this. I see no happiness or thoughts of 'Wow, this economy is really hot!'
From the Taipei Times:
"The European and Asian economies are on a firm footing, and we are seeing signs of a pickup in the U.S. economy," said Takuji Aida, chief economist at Barclays Capital Japan Ltd. "Given such a positive trend in the world economy and the likelihood of the yen's continued weakness, Japan is likely to keep posting a trade surplus at around the current pace."
All over the Japanese news, there are open thoughts running like this; 'If we can keep the yen weak...' They openly admit their schemes are for weakening the yen infinitely and forever. This childish desire is at the heart of the looming collapse of the world monetary systems. The US is not applying even the slightest pressure on Japan to stop killing the yen. The entire focus is on the yuan which is stupid and futile as well as unproductive.
Either we have a over-all program of strengthening both the yen and the yuan or we set up serious trade barriers to both exporting nations. The Japanese people seem to be fed up with the present system which is why the opposition party there is rising in power and might have unitary control of the government next month. I suspect we will see a huge shift in global financing dynamics. There is little speculation about this in either the US and the Japanese media. I suspect this is because no one wants to see this bizarre and very unstable paradigm end.
Late last year, the Organization for Economic Cooperation and Development (OECD) said China's expenditures for research and development, in terms of purchasing power parity, would surpass that of Japan in 2006 for the first time, placing it second in the world behind the United States.
The number of researchers in China has already exceeded that of Japan.
According to the Ministry of Science and Technology in Beijing, China's expenditure for research and development stood at 294.3 billion yuan (about 4.5 trillion yen) in 2006, 1.4 percent of the country's gross domestic product (GDP).
The corresponding figure for Japan for the fiscal year ending March 2006 was 17.8 trillion yen, or 3.5 percent of GDP. However, China's expenditure outlays are rising by about 20 percent annually while Japan's has only grown slightly.
This is one of the many side effects of the silly 'super-cheap yen thanks to crushing workers in Japan' model. Namely, eventually the life is beaten out of the very same people who are the engine of industry. There are fewer and fewer children and they don't study stuff that helps industry and research and it all declines. The US is like this. Slowly the life force of American youth is being drained. Get an engineering degree and watch the work be outsourced to India or China! The need to cheapen things as much as possible is depressing and destructive. The internal rot in Japan and the US is outstanding. I saw this when I used to teach at Rensselear Polytechnic Institute. Most of our students were foreigners. In the chip fabrication lab where I once worked, 90% of the people there were from Europe and Asia.
China has sent out students for years and years but now the birds are flocking home because this is where the money now is. If China loosens its communist grip on the politics of China, they will see a huge boom in intellectual attainments and attracting scholars. This is very tricky for them. The US has been resting on its laurels which were due entirely to the self-destruction of Germany when they decided to try to rule the world twice in one century and the second time, drove out or murdered their Jewish scientists and intellectuals who enriched the German culture and education so wonderfully.
From the Asahi article above:
Atsushi Sunami, associate professor of science and technology policy at the National Graduate Institute for Policy Studies in Tokyo, made the following comment on China's growing power in the fields of science and technology.
'It is true that China is becoming more and more competitive in some research areas. While the number of those areas will increase, we should not regard this as a threat to Japan. We should consider it an opportunity.
We can utilize Chinese researchers in areas where we have a serious shortage of Japanese researchers. Japanese scientists can also engage in research in China.'
Um, China is now nearly double the amount Japan spends on research. China is also outstripping Germany in this matter. German scientists are emigrating in higher and higher numbers as they give up on German interest in future research. They go to the US right now because they are cheap labor to the US still. But they are being overwhelmed by the tsunami of Chinese scientists who are being cranked out at a very high rate and have very high competition in school which motivates Chinese youth into studying much harder than American or German students. The Japanese dream of using Chinese scientist is pure fiction. They are very foolish, thinking this way. For China has not forgotten WWII despite Japanese attempts at pretending otherwise!
The Chinese dragon very much has Japan in its crosshairs. Not for attacking but for domination. The dragon has no desire to be Japan's tools and Japan's fools like the US. They intend to kick the US out of Asia and subject Japan to a more realistic balance of power. Which the Japanese hate. They love riding on the back of the US beast.
China's consumption of apparent crude oil and refined oil products hit a record high in the first half of the year, totaling 173.03 million tons and 106.112 million tons respectively, up 6.8 percent and 9.6 percent on the previous year.
According to the National Bureau of Statistics (NBS), the "apparent consumption" represents the sum of net imports and output but excludes inventory.
Crude oil output rose by 1.7 percent to 93.31 million tons and refined oil output increased by 7.2 percent to 95.972 million tons.
Dreams of cheaper oil fade as China buys more and more oil. Every time wars have spiked the price of crude oil, the US inflates its currency like crazy and then the price of oil collapses as trade resumes or Russia becomes part of the international oil trade. But there are no more Russias! This is it, folks. There are no vast oil fields that will magically appear like when Russia suddenly started selling energy to Germany in exchange for Germany paying their troops to leave East Germany. That was a one-time global event we won't ever see again, never. There are no more hidden treasures.
So long as China consumes more energy every year, the higher the price of black gold will rise. The only way to stop this is for China to collapse. But this is a two-edges sword! The collapsing country probably will be the US, not China!
Or it might be Japan!
Japan's exports and imports posted a record high in first-half 2007, while the customs-cleared trade surplus with the rest of the world jumped 59.3 percent from the same period last year, mainly on the weak, yen the Finance Ministry said Wednesday.
The trade surplus amounted to 5.133 trillion yen, up for the second straight half-year, the ministry said in a preliminary report.
Exports grew 12.8 percent in January-June from a year earlier to 40.365 trillion yen as the weak yen helped increase auto exports to Britain and other European markets and steel exports to the rest of Asia, the report says.
Imports climbed 8.2 percent to 35.232 trillion yen, led by imports of mobile phone handsets from China and nonferrous metal imports from Africa.
Imports of crude oil shrank 4.3 percent to 5.42 trillion yen for the first decline in six half-year periods. Oil prices averaged $ 60.8 per barrel on a customs-cleared basis, down 2.2 percent from year-earlier levels.
Japan is strangling itself trying to not use energy. This is part of the 'depression' economy they created artificially. As China boosts the world price of oil, Japan tries to use less and less. There are far fewer Japanese than Chinese so in the end, their efforts are doomed. If China keeps using oil, Japan will keep strangling their domestic economy until it dies. Which suits China fine.
Arson, sabotage at Hokkaido nuke plant site riles governor
Hokkaido Gov. Harumi Takahashi criticizes Hokkaido Electric Power Co. for failing to prevent a series of suspected arson fires at a reactor construction site in its Tomari nuclear power plant.
Panel urges revisions to hit 'difficult' Kyoto pact targets
A government panel recommends changing the existing program so Japan can attain its "extremely difficult" Kyoto Protocol greenhouse gas emissions target.
Crane damage at reactor may delay core checks
Look at these three headlines! All is not well in Japan. The plan to cover the earthquake faults with nuclear reactors is backfiring. It is not as popular as we imagine. The fact there is terrorism going on as Japanese themselves attack these facilities is carefully hidden from American eyes. I see nothing about this in American news! This is part of the cloaking system used to hide both Israel and Japan from prying eyes at home here. Everyone knows about China (hahaha, sort of!) but the efforts to hide these other countries from us is a conspiracy.
Later today, I am going to talk about the Beige Report and the growing US and European economic disaster and how our rulers are very anxious to lie to us so we are reassured even as they drive our economic race car off the track and into the crowded stands, sending bodies flying all over the place.