US Japan debt addiction for 4 decades has ended; higher borrowing rates for US, $20 trillion carry trade in danger of collapsing

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This is not going to be good for US market and Japan.  Japan has more than 250% of its debt vs GDP and for a long time has fed US with less than market % for its debt.  Japan accumulates trade deficit with US over.  It has increased its bond rate up to 2% ending the period of free source of funds for arbitrage (borrowing yen for higher yield investment)  Japan supported both deficits of US:   trade and  budget.

What has happened?   Japan has decided to grant stimulus package to companies because of static growth of the economy.  To finance this QE, Japan has to unload some of its treasuries   (Which will not go unnoticed by the world financial market).    This puts pressure on US borrowing, now saddled with $37 trillion in debt, higher servicing of its debt, now at 15% of GDP and $1.2 debt servicing.   With the QE, the Yen is devaluing and Japan has to prop up its currency

Its now over, the yen is on free fall and very likely its going to be devalued and Japan economy could collapse.  Japan was a big headache for IMF for a long time according to former boss Lagarde.

Japan used to be the 2nd largest economy in the world after US, and was the hotbed of manufacturing.  But now its famous brands have fallen:   Toshiba, Sharp, National, Sony.    Now Japan is campaigning itself as a tourist destination.   Do you  think that this is Karma for Japan, following its atrocities in WW 2.?

What are the other consequences.   The carry trade.   Arbiters and currency traders, borrowed from Japanese banks at zero or near zero interest and used the same to hedge:   buy other currencies, invest in foreign stocks etc to gain some tidy profit.  However this feast is over, as the Japanese bonds are now more expensive.   So companies on carry trade have to cash out or drown under water.  This business, totaling $20 trillion could cause massive strain on world financial liquidity, even for US

This also means that US debt US treasuries will mean more interest expense for US homebuyers and consumer finance from credit cards.  

China is also dumping US treasuries due to political and trade tensions And with both China and Japan US two biggest creditors dumping US treasuries, US will find itself paying more for debt and even a liquidity crisis

Also note the end of US Petrodollar and Chinas payment system bypassing SWIFT and BRICS nation bypassing the US dollar altogether.  When Eurodollar and Petrodollar start coming home to roost, watch how more US dollars coming home means hyper inflation for USA.

Next bursting of bubble - the AI bubble

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First we have the dot.com bubble burst, then the 2008 prime mortgages bubble burst, and now many see the AI bubble.    AI they say is over hyped and the reality is that most claims of benefits are not being delivered.   One such failure is by Stellantis.

What is the impact of this bubble burst:

1.  For your business;

2.  For PHL economy?

3.  For the world economy

Why UK economy is f...ed?

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1.  Huge debt

2.  Lost manufacturing capacity, focussed on financial services

3.  Energy crisis and Ukraine war -  reduced access to USSR gas, and more budget for defense to support

     Ukraine

4.  Low productivity

5.  BRICS exit;   increased cost, made UK a risky investment site

8.  Rising interest, higher inflation

9.  Less access to labor market

10.  Austerity that reduced expenditures for for infrastructures and public services

Is Japan, the 3rd world's largest economy in deep trouble? Economy as bad as Greece?

It is more fun criticizing Should the rest of the world, or Japanese be worried?

Effect of former Pres detention at ICC in Hague?

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What are the possbile consequences of the sudden detention (allegedly without due process) on the Philippines:?

1.  Will Philippines achieve its targetted economic growth?

2.   Reputation of the PHL to other sovereign nations?  Is PHL sovereign or not?

3,  Political and social stability -  will there be unrest in Mindanao and Visayas?    

4.  Effect on midterm elections:   will PBBM candidates win.?  Some administration  candidates are wary of the negative effect of the detention in their bid for the Senate.

What is going to happen to our future 

Trump sworn to office as 47th US President; Golden Age for US, the world, and world peace

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President Donald John Trump was sworn in as 47th President of the USA.  Many remarked his 2nd term at the White House as Golden Age  for US.  He vowed to end wars and wants to be known as pacifier.

We are awed enthralled, amazed by this inaugural especially by the parade of various marching bands firefighters, police, volunteers, armed forces of USA.  The returning President was honored, supported by the pompous, grandiose inauguration.  What else can we sell.

We wish the President the success and power that he deserves.  May he correct the fumbles and missteps under the past president.   The success of the incoming President and his policies reverbates throught the world.    When USA says others sneezes, the whole world trembles

All ready, he brokered Peace in Israel Gaza conflict.  What happens to Ukraine and Taiwan China?     

He all ready signed 100 Executive Orders.  Some of them include US withdrawing support for the WHO.   and declration of state of emergency at US border with Mexico effectively shutting off illegal migrants from the South.

In bizaree move though outgoing Pres Biden issued pardon to some personalities including some members of his family.   

Is China economy failing? How will we be affected?

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Finland joins NATO; now what Russia?

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Many say that this event (+ Sweden) checkmates Russia's ambition. Finland's border with Russia  is 800 miles long.  Its a long one.  But it is so close to St Petersburg and Stalingrad.   And USSR access to the Baltic sea will be severely limited.   Finaldnd can threaten USSR.

In the past USSR under Stalin made pre emptive incursions into Finland and lost territories.  But Finland despite maintaining neutrality, has built its defenses and continued conscription of male population into its reserve post.   Finland failed to neutralize Russia when it joined forces with Sweden.

Finland decided to join NATO when USSR invaded Ukraine.    

What will happen to balance of power in Western Europe/Russia.   It is in stalemate with Ukraine.  Putin lost out in Middle East with fall of Syria.  This has considerably weakened Russa   And now Finland joining NATO?  And to think that Russia's economy too has faltered, and armaments greatly diminished by war in Ukraine.  Military ranks too decimated.   Can it continue sable rattling....

Has Japan economy stalled?

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The secret to their economic miracle were:   keiretsu, MITI, exports, and extreme cooperation across society.  Kaizen, processes, JIT, Deming on quality

Their collapse was triggered by the events of lost decade.  People speculated on real estate because of low BOJ interest  rate.  Companies attetnion to maintaining market share and productivity were diverted to real estate speculation.  When BOJ increased interest rates, Japans economy was doomed.  Many companies shuttered.  

The more important thing is culture.  Japan's culture does not encourage change/innovation

Population is declining.   More aged people deominate the population

Will the $35 trillion US debt an economic apoclypse to the world?

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Noted in the world economic landscape:

    1.  China and Japan dumping US treasuries

    2.  No attempt by US lawmakers to stop deficit spending.  It is growing by $100 billion a month

    3.  BRICS nation making moves to dedollarize the world econonmy.

Elon Musk warns of economic cataclysm from this huge US debt.  There is no need to wait for the Biblical apocalypse.  It can happpen anytime soon

What could happen if US dollar/economy eollapses?

     1.   Dollar would be dumped as currency for world trade, US dollar returns to US domestic economy

     2.  The huge influx of dollar would drive hyperinflaction in US

     3.   Hyper inflation would drive down values of dollar now a reserve currency and destroy many

           central banks,   World economy can collapse

     4.   Millions, possibly billions of dollar holders would be driven to poverty.

     5.  World poverty follows.  

Increasing hostilities at Lebanon places many expats in harm;s way, time for massive repatriation

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Isreel has rained rockets in Lebanon, air strikes all ready having caused the deaths of at least 500 individuals,  The hostilities aimed vs  Hezbollah would have crippled the Lebanon ecsonomy and placed many people in danger.  Many expatriates have been advised to leave.

These are the events that could lead to higher oil prices and lead to downfall of some exonomies.

South Korea's economy stagnating?

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All that goes up must come down.    SK is one of the top 10 economies in the world, despite the fact that in 1950, PHL aided Korea.  They were very poor.  But leadership will and the little help from USA made SK an economic powerhouse. 

However this video thinks SK is stagnating.   Coming from both internal and external factors.   External factors:    slow down in world economy, threat or war, the Covid pandemic, energy problem.

Internally, it is because of complacency of Chaebol management which are now in 2nd and 3rd generation management and leadership.   As they say, first generation builds it, second generation spends and enjoys it, the third generation runs the enterprise to the ground

We wish Korea well and all the best

Japan was my idol in business, economy, philosophy, and achievement

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Despite being the conqueror of our country in WW2, and news of atrocities vs our people, as a business person I admired the achievement of Japan.  It was the No 2 biggest economy in the world after USA.

So I bought and read over and over books by Konosokue Mastsuhita, Akio Morita,  books on the Toyota Way.   Studied their quality circle, the voice of quality, Kaizen, 5s and many more.

However I was disappointed to see news of business failures despite these vaunted very sound business practices:   Toshiba, Olympus, Sharp and many more.   Perhaps because of too much competition from  Korea and China, they were not able to adopt well.  And more importantly the collapse of the bubble in 1990. 

When Lagarde (head of IMF) spoke about world finances, she mentioned that her number 1 problem was Japan.   

And this was exacerbated by the 2011 Tsunami and Fukushima meltdown

We plan to visit Japan soon and see how clean and how beautiful and advanced it is.   

It is the sincerest wish of this post that she recapture her glorious past and progress.

Food Security in the Philippines

Challenging economic recovery ahead of us

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The post just made a travel to the north.. Despite stringent travel restrictions and requirements, he was able to patiently get these.   But looking at the indicators around, the road may be tight ahead.  After registering 9.5% decline in the economy, the recovery will be hard:

    1.  No provincial buses were seen;  they were all confined in the garages.  H

         1.  How many drivers, conductors inpspectors and other bus company employees lost their 

              jobs

         2.  How did this affect the movement of goods and people?

         3.  How many vendors and other people making money out of bus travel lost their revenues:

             restos, bus vendors, gasoline stations

    2.  How about the express way operators:  NLEX, SCTEX, TIPLEX?

    3.  In general, the economic activity look tepid.  Couple that with the floods and other calamities

All ready we see declaration of bankruptcy  a Philippine flag carrier 

We see many companies closing their doors forever to business.  Millions are out of job

What is the status of the Philippines in terms of GDP/capita

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Rizal Philippines
July 22, 2018

Philippines is not poor.  Five years ago, ADB has removed the Philippines from the list of LDC (Less Developed Country) and is no longer eligible for aid/donation.  Loans yes and other assistance

As  per Wiki, Philippines is

    34th largest economy in the world

    3rd largest economy in ASEAN (after Indonesia and Thailand)

    6th in Southeast Asia after Singapore, Brunei, Thailand, Malaysia and Indonesia.   (We could be richer had  we not relinquished claim to Sabah, part of Sultanate of Sulu (thanks to some traitors who sold RP out to Malaysia)

    That is a good note we have to remember about the wealth of the Philippines

    GDP of Philippines as of 2016 is $2,951.07 vs  $5,907.91 of Thailand and fast rising Vietnam $2,185.69

Are casinos good for the economy? Why do they mulitply?

Social and political criticisms

Personally, I do not think casinos are good for the economy. Gambling, gaming are zero sum games, are economic blackholes that sucks money, savings, and resources, and barely returns anything to the economy.  It creates paupers, losers, gambling debts, and broken homes.

This is unlike entrepreneurship that creates wealth jobs, and employment;   casino and gaming for as long as people have something to gamble/bet.  It does not create value.

I have seen millionaires become paupers;  rich people lose their cars and homes to gambling losses.

Why does the government still license and promote casinos/gambling?  Does it make sound economic sense?

Are casinos good for the economy?



Discovery - net effect of casinos to cities is negative