Uncertainties still surround 'Abenomics' despite growth run

If Japan is integrated with China, then domestic growth would be not a problem at all. That is why it is very important to become a part of Chinese economic growth engine. The idea of United States of Northeast Asia is much better than Abenomics.

Unfortunately, China is a one-party state, and, as such, the population is controlled by the Communist Party of China. The CCP is the opposite of democracy and does not obey any rule of law, instead imprisoning people and subjecting them to extra-judicial punishment if they want to speak freely, criticize the government, etc. As such, any economic involvment with China only enriches the CCP and further entrenches its dictatorial hold on power. Until the CCP is removed from power and the Chinese people are free from the CCP's tyranny, further economic involvment with China will only damage any democratic country involved. While "Abenomics" is a joke and Japan's economy's problems are legion, it is best to solve these problems by dealing with internal issues and intelligently engaging democratic states.

Midnight Sun Tribe, it is better to test it out by trial and error. Give the Untied State of Northeast Asia a chance and see what will happen. If 1.5 billion Chinese are happy with their govt, 100 million Japanese should have no problem. That is democratic view and principle. As for law, what are differences between Japanese law and Chinese laws, in terms of percentage ?

What uncertainties ? It's clear it has and never will work

Please. How much of Japanese economic success is for factors outside his 3 arrows? I dare say 90+%. He never wanted nor thought of foreigners. Where's the credit? How much gold have foreigners thrown on Japan's lap? Totally unrelated to Abenomics.

What uncertainties ? It's clear it has and never will work

Exactly

Please. How much of Japanese economic success is for factors outside his 3 arrows? I dare say 90+%. He never wanted nor thought of foreigners. Where's the credit? How much gold have foreigners thrown on Japan's lap? Totally unrelated to Abenomics.

Agree

Every time wages go up taxes also go up, leaving workers worse off. The annual increases in pension contributions have finally come to an end, but now they will introduce a "forestry tax" and a "departure tax", both designed to employ retired bureaucrats at my expense.

the money went to amukuradi, not people who work hard.

I just want to know why the JYen continues to be so darn strong against he USD with all these articles and comments.

Bolstering domestic demand has been a challenge for the export-reliant Japanese economy 

Therein lays the whole problem with Abe's economic policies. He is relying on export markets that no longer belong to Japan and the sales tax increase in Japan dropped consumer spending by 10-25% depending on the industrial sector. Furthermore, the recent scandals involving Japanese products and companies abroad have severely damaged international consumer confidence in Japanese products. The only true point in the above statement is, Japan does need to rebuild its economy domestically. However, giving corporations tax cuts and increasing taxes for the masses is not the way to go. He also needs to stop 'urging' companies to increase salaries and make an across the board increase. However, if you look at Abe's achievements compared to his campaign promises, he is a huge failure! He has achieved nothing in nearly 7 years of office. No increase in child or aged care. No salary increases. No increase in family allowances. No 'free' education. The only things he has achieved are, increased the sales tax and given corporations tax cuts. People are worse off than before he took office.

I just want to know why the JYen continues to be so darn strong against he USD with all these articles and comments. because the Yen is the FOREX dumping ground whenever world markets get jittery, doesn't matter what the state of the J economy is.

By now it is well known that devaluing the yen has not achieved the desired effect, but rather the opposite. Not only have exports not really received the expected boost, but Japan’s trade and current account surplus have started to decreased.

A trade or current account surplus is not a measure of a country’s prosperity anyway. So even if the devaluation gambit had succeeded, its success would have been meaningless and any positive effects would have been strictly transitory. Japan’s consumers would have suffered just as they are suffering now.

Devaluation means securing a strictly temporary advantage for a small sector of the economy – export-oriented companies – while impoverishing all consumers concurrently. In the end, not even the advantages for exporters will be maintained, as domestic prices will inevitable adjust. As strategies for economic revival go, this has to be one of the most moronic ones ever devised.

As a side effect of the sales tax hike as well as the yen’s depreciation, Japan’s consumer price index has begun to somewhat creep up. Japanese officials play this down by relying on a core inflation index that excludes the effect of the sales tax hike, and consequently argue that the inflation rate is still too low. This obviously matters little to the average Japanese citizen, who has seen his real income melt like a pile of snow in the Sahara. It is unfortunately not possible for Japan’s consumers to pay seasonally adjusted prices ex the sales tax effect. Statistical artifice cannot alter economic reality.

Previously, Japanese consumer prices tended to mildly decline from time to time, thereby enhancing the meager incomes of Japan’s growing class of retirees and the incomes of wage earners. Abe and Kuroda have succeeded in impoverishing them. Mainstream economists all over the world are almost unanimous in their approval of this idiocy.

The BoJ’s efforts have blown Japan’s monetary base off the charts, but a concomitant reduction in bank credit has meant that very little of this has actually translated into money supply growth. It must be kept in mind here that this massive rise in the monetary base means that an ever larger share of the fiduciary media in Japan’s banking system have been transformed into covered money substitutes. This makes a deflationary credit collapse less and less likely, and by inference means that the opposite is becoming ever more likely. It cannot be ruled out that faith in the currency one day simply evaporates and that prices will then catch up with the monetary inflation that has taken place up to this point.

The main reason why the public’s continued confidence in the currency cannot be taken for granted is the essential Ponzi nature of the BoJ’s debt monetization schemes. By buying ever more government debt with newly issued bank reserves, the government ends up owing more and more of its debt to itself. The inherent absurdity of this situation should be obvious.

Japan’s narrow money M1 (demand deposits and currency), roughly equivalent to money TMS-1. Note that in spite of the BoJ’s massive ‘QE’ operations. All the same, the money supply is up by a factor of six since Japan’s asset bubble burst in 1990. CPI meanwhile has risen somewhat until 1995 and has essentially flat-lined since then.

There is a sense of crisis due to the explosion in Japan’s fiscal debt and the danger that confidence in fiscal policy may wane. The best way to counter this is by engaging in more money printing and even more deficit spending (this is what the implementation of a supplementary budget means – it means more government spending). This is Keynesian logic and brilliance in all its splendor.

In short, more of the same will remain the agenda until the whole house of cards implodes one day.