It’s Wednesday, so just a few subjects. Tomorrow, I plan to deal with the problem that the US financial system is heading into recession. The brief evaluation is that it doesn’t appear to be it to me regardless of the comparatively poor labour market knowledge that got here out on the finish of final week. However there’s definitely a variety of fluctuating fortunes being recorded across the globe at current. Latest Japanese knowledge is kind of attention-grabbing and I focus on it in what follows. We must also keep in mind that yesterday was the anniversary of the Hiroshima bombing – a really unhappy day in human historical past. Always reminding us of the harm that the US bombing brought on ought to warn us off conflict altogether and nuclear weapons and know-how particularly. Sadly, the traits are working in opposition to such a view. And we even have some music to hearken to whereas cogitating over these points.
Japanese exports
Whereas mainstream economists attempt to make a case that the depreciation of the yen demonstrates that the conduct of macroeconomic coverage in Japan has been disastrous – and a few even declare that it in some way ‘proves’ Trendy Financial Idea (MMT) is harmful – I’ve been, as a substitute, watching the commerce account fairly intently.
We now have the – Commerce Statistics (July 2024) – knowledge from the Ministry of Finance, which present some attention-grabbing traits have developed over the previous few years.
I noticed some mainstream financial commentary the opposite day claiming, in a type of ‘I instructed you so’ conceitedness, that the decline in general export worth for agricultural, forestry and fishery merchandise and different meals objects, within the first half of 2024 was proof that the failure to push up rates of interest considerably and the continued fiscal deficits has been damaging.
Certain sufficient, the exports of these key merchandise for Japan fell by 1.8 per cent within the 6 months to June 2024 on an annual foundation.
This was the primary time because the starting of the pandemic that these exports have declined.
But when we dig deeper we acquire a greater understanding of what’s taking place.
In reality, the decline has nothing to do with macroeconomic coverage settings in Japan, however, quite displays the choice by China to ban Japanese fishing merchandise after the Japanese authorities began pumping the contaminated water from the Fukushima catastrophe into the ocean.
The info reveals that though Japanese exports to China rose by 12.3 per cent over the 12 months to June 2024, “meals exports to China plunged 43.8%” (Supply).
However exterior of the Chinese language bans, meals exports to different international locations have boomed on the again of the depreciation – rising by 14.3 per cent.
Exports of meals to the US rose 19.9 per cent within the final yr and 13.9 per cent for all merchandise.
One other attention-grabbing knowledge launch got here from the Japanese Ministry of Finance at this time (August 7, 2024) within the type of the – Overseas Trade Intervention Operations – for the June-quarter 2024.
Some individuals assume the Financial institution of Japan has solely simply intervened in international change markets.
However the knowledge reveals that it has often, because the main property crash in 1991 intervened at varied instances.
The next graph reveals the size of the interventions because the June-quarter 1991.
The newest interventions because the international push for increased rates of interest started and began shifting international capital out of Japan in the hunt for increased returns had been:
1. September 22, 2024 – 28,382 100 million yen (the overall for the corresponding quarter).
2. October 21, 2024 – 56,202 100 million yen.
3. October 24, 2024 – 7,296 100 million yen.
4. April 29, 2024 – 59,185 100 million yen (¥5.92 trillion).
5. Might 1, 2024 – 38,700 100 million yen (¥3.87 trillion)
So fairly a big intervention on two days earlier this yr when the Financial institution of Japan bought US {dollars} in return for yen, to clean out the fluctuations within the change fee.
Apparently, the Financial institution bought US treasury shares to get the US {dollars} which they then used to bolster the yen.
The info reveals that these interventions generated round a 5 per cent appreciation within the yen in opposition to the greenback.
Whereas the parity stays depreciated, the shift in current days has been sharply within the route of appreciation as a response to the slight upward motion in rates of interest in Japan and speak of recession within the US (I’ll take care of that speak tomorrow).
General, none of this might be used to make a case in opposition to MMT.
It was apparent that the parity would slip when the Financial institution of Japan declined to comply with the pavlovian interest-rate hikes of the opposite central banks.
And it was additionally apparent that its commerce scenario would enhance.
Whereas there was a variety of speak concerning the ‘carry commerce’ being accountable for swings within the yen parity – so traders borrowing low-cost in yen after which investing it in increased yielding property – which then generates an extra provide of yen within the international change market – a lot of the yen fluctuations are as a result of commerce weak spot in recent times, which is now resolving.
Hiroshima
Yesterday (August 6, 2024), marked the 79th anniversary of the nuclear assault by the US on the Japanese metropolis of – Hiroshima – which allowed us all (sadly) to witness the implications of utilizing nuclear weapons in opposition to individuals.
As much as 166,000 (principally) harmless individuals had been slaughtered by this act both immediately or subsequently from the diseases that the bomb wrought.
On the – Nijō Fortress – in Kyoto, there’s a tree memorial which is made up of seedlings progress from a “Chinese language parasol tree that survived the A-bombing of Hiroshima” – which was created in 2013.
You possibly can examine that on this article from the Chuguko Shimbun (October 22, 2013) – Seedlings grown from A-bombed tree to be planted at World Heritage website in Kyoto.
It was sourced from the – Hiroshima Peace Memorial Park.
After I go to that Fortress I at all times cease close to that tree memorial and take into consideration the necessity for nuclear disarmament.
The present – Hiroshima for World Peace Plan – requires a complete abolition of nuclear weapons and just lately held its annual assembly, the place a brand new report – Hiroshima Watch 2024 was launched.
The Peace Plan is launched by the Hiroshima Spherical Desk which includes scientists from many various international locations.
The Report considers that the world is sliding away from a agency place to ban nuclear weapons.
The “5 nuclear-weapon states” have all acknowledged that they are going to “use nuclear weapons if their sovereignty is threatened”.
The Report additionally paperwork (utilizing knowledge from the Stockholm Worldwide Peace Analysis Institute (SIPRI)) that the weapons race continues apace and contemplating resuming nuclear weapon testing.
Russia and the US account for 90 per cent of the worldwide inventory of nuclear warheads and are now not keen to cooperate to resume the NewSTART (New Strategic Arms Discount Treaty), which expires in early 2026.
The previous enmities from the Chilly Warfare stay and are driving a fracturing of the progress that was made with the – Treaty on the Non-Proliferation of Nuclear Weapons.
The final two, five-yearly conferences have failed and the regulatory management that the NPT was meant to supply is admittedly non-existent.
The Japan Occasions article (August 5, 2024) – What stands in the way in which of a nuclear weapon-free world? (paywalled) – notes that:
The inadequacy of the NPT because the dominant regulatory framework is captured by the fact that 4 of the 9 states that possess nuclear weapons — Israel, India, Pakistan and North Korea (within the order through which they acquired them) — are exterior of the treaty. The primary three by no means signed and the latter is the one instance up to now of an NPT defector state, though, if issues don’t enhance quickly, it might be joined by others within the Center East and Asia.
These states usually are not a part of the NPT discussions and face no inner strain to abide by something the conferences determine.
The truth that the US nonetheless continues to supply weapons and funding to Israel is especially scary on this context.
It’s onerous to see the present escalation in nuclear threats diminishing any time quickly.
Folks ought to go to the Hiroshima Peace Park to study why we must always cease our legislators from partaking on this escalation.
Episode 3 of our Manga, the Smith Household and their Adventures with Cash comes out this Friday
Sure, recession has struck and Ryan comes residence with some dangerous information.
As time passes, his desperation mounts and he’s struggling to reconcile what Professor Noitawl is saying on the TV every day concerning the want for progress pleasant austerity and the fact that the depressed labour market has rendered for him and his household.
You possibly can comply with the – Smith Household and their Adventures with Cash – all through Season 2, with new episodes showing fortnightly.
Ebook Occasion – Melbourne, September 12, 2024
Readings Bookshop has now up to date the location for our occasion – Invoice Mitchell with Alan Kohler – which will probably be held on the Hawthorn Store (687 Glenferrie Rd, Hawthorn, Victoria, 3122) on Thursday, September 12, beginning at 18:30.
I will probably be there with ABC Finance character Alan Kohler to debate my new e-book (co-authored by Warren Mosler) – Trendy Financial Idea: Invoice and Warren’s Glorious Journey.
Copies of the e-book will probably be obtainable at low cost costs and my pen would possibly come out if you would like it signed.
That you must e-book for the occasion which is free however restricted (about 60 tickets can be found).
Yow will discover extra particulars and reserving info – HERE.
I hope to see all of the MMT Melbourne crew there (nicely at the least 50 of you).
My various Olympic Medal Tally
For the reason that 2000 Olympic Video games I’ve been compiling – Invoice Mitchell’s Various Olympic Video games Medal Tally – which makes an attempt to switch the official tally to take note of nationwide wealth and inhabitants dimension as an antidote to the strutting nationalism deployed by the likes of China, the US and different large nations which have numerous funding in Olympic sports activities.
The choice tally is up to date every day till the Video games are over and supplies some attention-grabbing knowledge for varied conjectures.
Music – Shuggie Otis – one in every of my favourites
Johnny Otis – was one of many nice blues, R&B musicians, vibrophone participant, keyboard participant, drummer, bandleader, composer – he did all of it.
He was known as the “Godfather of Rhythm and Blues.”
He’s credited with ‘discovering’ the marvellous Etta James as a 13-year phenomenon.
Shuggie Otis – was one in every of his sons and in addition does all of it.
Within the early Seventies he put out three fantastic albums, which most individuals won’t ever have heard however are amongst my actual favourites and are on my iPhone wherever I am going.
Because it goes, the music press known as him the ‘inheritor’ to Jimi Hendrix. His guitar enjoying was phenomenal, which is the place I turned involved in his work within the early Seventies.
He was to be the hole between Stevie Surprise and Prince. The Rolling Stones invited him to hitch to exchange Brian Jones.
Along with placing out his personal albums, upon which he performed a lot of the devices, he additionally performed (as a young person) on – Kooper Session – with Al Kooper and – Sizzling Rats – with Frank Zappa.
His most well-known tune – Strawberry Letter 23 – was on his second album – Freedom Flight (1971) – was an enormous hit for – The Brothers Johnson – and was produced by Quincy Jones.
Here’s a – hyperlink – to remind you what was taking place in 1977 as disco began taking up.
Clearly, I most well-liked the unique.
Shuggie Otis’s third album is one of the best in my opinion – Inspiration Info – and it was launched in 1974. A brief album (31:38) however filled with classics.
It is a nice tune from that album – Aht Uh Mi Hed.
Shuggie Otis hasn’t had a straightforward life – the same old points. However I noticed him just a few years in the past enjoying dwell once more and he’s nonetheless a masterful guitar participant. Pity the medication and drink obtained within the highway when his star was actually shining.
‘Inheritor to Hendrix’ Shuggie Otis: ‘I may have been a millionaire, however that wasn’t on my thoughts’ (April 16, 2016) is a recent dialogue of Shuggie Otis.
That’s sufficient for at this time!
(c) Copyright 2024 William Mitchell. All Rights Reserved.
