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Mr. Abe is in hospital now, suffering stomach ailment or exhaustion, depending the source you read or listen to. A good old fashioned harakiri would surely cure him.

Elaine, since months I'm reading your blog now . In the beginning it took me a lot of effort because english is only my 3rd language and I was only just getting used to the Bloomberg, Reuters language and the language of the 'genuine' American and Brit in the several 'high quality' comment spaces in the economic blogosphere.
You are using the language more than just a tool for sending messages to the world, you are using metaphores, selfmade expressions and descriptions, as you do with your drawings. You're one hell of a creative person, although suffering from artritis.
Now about falling empires and governments.
Transatlantic, nobody's talking about Belgium...yet. We're 95 five days without a new government after the June elections.
According to the head of the Belgian National Bank, Mr. Quaden, the ECB is getting a little nervous and Trichet is starting to ask some questions. Belgium with its capital Brussels is hosting the ECC and shares the seat of the European Parlement with Straatsburg(FR). Its also the seat of NATO.
And its falling apart.
177 years after it was founded in 1830, it is having its most severe existential crisis ever.
Two totally different communities(40% French speaking Walloons in the South and 60%Dutch speaking Flemings in the North) could bare living together as long as they had the colony of Congo. After Congo's independency, they created a national debt of more than 100% of GDP to pay this costly 'spending apart together' relationship. Then luckily came the bubble years so GDP made the debt look less, but now the party seems over.
As you correctly pointed in previous threads, Europe has been and is selling out its production base because we always copy the US economic schemes.
So what now, with the aging population of Belgium, with massive unemployment(masked with diverse prepension or 'to old to be available on the job market'schemes). If there will be less 'spending together apart', then why stay together(if you're the richer northern part).
This is what is happening in Belgium and you can bet that it will be a preview of what could happen in Europe in years to come.


One thing I find puzzling - when a country fixes its currency rate something else (usually) has to give. An example of this is the crash of the Swedish Krona in 1991 when the Kingdom of Sweden, in all their wisdom, had a "fixed float" (yeah, oxymoron, "army intelligence" and all that). Sweden ended up with 500% daily interest rates as international currency traders, led by the currency king of kings G. Soros himself, traded off the fix.

How is it that China can fix the currency, have a massive imbalance of payments, and not suffer similar interest rate swings? Is it because there is no real currency exchange available (i.e. no float whatsoever)? If so, then I can understand why they won't let their currency float. And if this is the case why isn't pseudo renminbi float going bonkers as the market tries to adjust the peg?



"And now it looks like the LDP will put Aso in to the driver's seat."

How odd. In your response to my comment yesterday (in "Government of Japan Collapses!"), you said "We are about to see a NEW GOVERNMENT in Japan, not simply a rotation of a bunch of faceless drones fronting for Toyota and other exporters."

"Governments Falling, Banks Grind Teeth, Worries About Chaos Grow"

If a government fell in the forest would it make a sound?

I wonder what went wrong. Maybe they didn't read your blog yesterday.

Liberal AND Proud

"Capitalism in the US has collapsed. The fact that we have a trade deficit with EVERY COUNTRY IN THE WORLD is very significant. We are not 'trading', we are 'consuming.' And we have a limit to this. We can cut interest rates to 0% like Japan but this is no good unless, like Japan, we cut CONSUMPTION growth to 0% or lower."

Gawwd, Elaine. EXACTLY. Well said.

Elaine Meinel Supkis

Smith, the government collapsed. The LDP will try to put some creature like Abe in. BUT this is a crisis! And the Democrats are demanding an election which they fully expect to WIN. I know you have trouble understanding US democracy, understanding Parliamentary systems is beyond you.


"Smith, the government collapsed."

Yeah, I know. That occurs fairly frequently in parliamentary systems dependent upon unstable coalitions. India's government may "collapse" over the pending nuclear deal with the US.

When it occurs, there'a an election and a new government is formed. "Governmental collapse" sounds a lot worse than it really is.

"understanding Parliamentary systems is beyond you"

Speak for yourself, Elaine.

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