Monthly Archives: September 2014

The Trend of World Events

The U.S, China and EU greatly affect the Japanese economy. Especially, the U.S also greatly affects the world economy. However, as the President Barack Obama said, “The
U.S no longer fulfill the role as the world police.” The U.S, which is conflicting with Islamic State, falls into its financial deficit. Now, the shale gas revolution is the only hope of the
U.S economy.

With regard to China, Xi Jinping, the President of the People’s Republic of China, successfully dominated the Shenyang Military Region of People’s Liberation Army, which had virtually controlled North Korea, through regulating the shadow banking, thus directly dominating North Korea. That’s why Jang Sung-taek, the No.2 of North Korea, who served as mediator between his country and the Shenyang Military Region, was purged last December.

Then, That Xi Jinping visited South Korea on July this year in preference to North Korea means abandoning of North Korea, thus leading to the collapse of North Korea. Although China has supported North Korea as “the ally of blood” since they fought together in the Korean War from 1950, its economic crisis does not allow to take North Korea’s circumstances into consideration.

Therefore, North Korea tries to make Japan help its economy by offering the abduction issue as a bargaining-chip. However, the inevitable collapse of North Korea produces its refugees, who will flood into South Korea and partly Japan.

If so, As Robert Gates, U. S. Secretary of Defense, warned Park Geun-Hye, the President of South Korea, South Korea will collapse by the Korean believing in anti-japan thought. Because of considering the present economic conditions of South Korea, without Japan’s aid, as Angela Merkel, Chancellor of Germany, once advised the Park, the collapse of North Korea will cause that of South Korea. Because she realized how hard German reunification similar to the present situation in the Korean Peninsula was.

EU is called “the Fourth Reich led by Merkel” – regarded as another Reich led by the Prime Minister, following the First Reich (or the Holy Roman Empire), the Second Reich (or German Empire) and Hitler’s Third Reich.

Germany, the currently only remaining economic power in EU, is seen as if dominating 21st century Europe by Euro, instead of the Sword of the past Fuehrer in the time of WWII. Despite the nuclear-power-phase-out declaration in 2011, Germany continues to use nine sets of nuclear power plants and remains severe on energy policy enough not to abandon them immediately while producing coal from domestic mines.

The weak economy of Europe except Germany led to the Russian intervention against Ukraine. Having foreseen that the U.S wouldn’t dispatch troops to Ukraine, Russia annexed the Crimea peninsula and then has been intervening with the eastern Ukraine after the ceasefire agreement on September 5 signed.

Under these circumstances, it is natural that Japan’s export to Europe should be dull. The European Central Bank (ECB) will probably reinforce monetary easing policy through reducing interest rates and buying Asset Backed Security (ABS). However, it shows economic prosperity in Japan that global companies of Europe raise funds in Japan.

As for the trend of Japanese economy, in spite of the budget deficit not existing,
If increasing the consumption tax is carried out as an attempt of the financial bureaucrats to increase a tax revenue, it leads to depress consumption and decrease the tax revenue.

In fact, by increasing the consumption tax from April this year, the decline in GDP from April to June, nearly 8% (6.8% of official announcement + 1% of compensation), was the worst for the past 20 years. Properly speaking, with the difference of fiscal structure and fiscal management between Europe, the U.S and Japan, it is not necessary to worry about the budget deficit in Japan.


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