Princes of the Yen - Documentary

[sqa]

https://www.youtube.com/watch?v=p5Ac7ap_MAY

Came across this one while checking the Alt-Market News. (I check both; everyone is selling a view, so you can at least notice what everyone is either talking about or not talking about) Pretty decent, if long, documentary.

But, like most bits of documentaries, there's a few timeline details they missed/over-did. It's why the 2nd half is far better than the first.

Since I study Japan really heavily, a few points they missed:

- Japan shifted the yen in 1971, and had it in free-float by 1973. That was a big part of the GDP boost.
- Japan had been rapidly dropping their Interest rates in the 80s, as part of their entire economic model. (Though I'm not sure a "war-economy" is quite the proper way to describe what the Japanese were normally up to. Major Company-Cartel systems is more accurate.)
- Plaza Accords: There's a reason the Japanese were buying up 8%+ US Treasuries in 1986. Something about having their currency nearly DOUBLE in value in 3 years shoots a huge amount of money into Equities.
- Just because one side won a political struggle, it doesn't mean the losing side wasn't guilty of quite a lot. Japanese bureaucrats aren't people I would ever normally go to bat for.

In general, there's a lot more fundamental bits that drove the Japanese economy to the point where the story picks up. Not the least of which is that it was a debt-fueled asset bubble starting from even the late 70s.

However, the bits in the second half of the documentary about the duplicity of the IMF, the ECB and the (though not stated this way) Central Bankers Club is quite good. Though the "Europe" project has its roots in the post-WW2 desire to obliterate popular control of the governments by the elites within Europe. But that's a little beyond the documentary's scope.

 

[rod178]

Thanks. I did not know that they had made a doco film on that book, which i have been planing the read for some time. Some of the book reviews are also informative

http://www.amazon.com/Princes-Yen-Central-Bankers-Transformation/product-reviews/0765610493/ref=cm_cr_dp_see_all_btm?ie=UTF8&showViewpoints=1&sortBy=bySubmissionDateDescending

 

[Computater707]

Since I study Japan really heavily...

Thanx Sqa I enjoyed the documentary. Since you have been following this closely perhaps you can answer a question I have.

How does the more recent resurgence of the Liberal Democratic Party and Abe Shinzo's Abenomics and his recently appointed BOJ president Kuroda Haruhikofit in. ?

My uninformed impression is that the old LDP powers that be were gaining control of the BOJ. Do you agree?

 

[sqa]

The LDP isn't much of anything like a Western political party, so it's harder to explain. Even understanding that my understanding of it is limited given that being able to read Japanese is easily the hardest part of the language.

The LDP is really multiple interest groups that run patronage systems. So there's always a rolling set of power brokers involved. They have cemented their control, more, in recent years, but that has a lot, also, to do with the opposition being less skilled at running the patronage system & just not that good at governing. (The Japanese insist the "trains run on time", very much) Granted, when you've only had power for 6? years in the last 60, you don't have any practice at it.

Kuroda is actually more interesting because of his background is the Ministry of Finance. That's a different Bureaucracy than the BoJ, so the fact he's the head now has some really subtle implications. It also explains why it is that a lot of the BoJ votes haven't been unanimous. The New QE vote was 5-4 on a big policy change. That's a pretty big Red Flag for a culture that operates on consensus. Which is why we're already seeing them talking about no increases or even limiting purchases back. (The fact that Draghi is about to unleash EU QE has a lot to do with that as well)

The catch, with Kuroda, comes from his well-established membership in the "Central Banker's Club". When apparently Paul Krugman was a key voice in the recent QE, you have to wonder how much of this is about Japanese control than playing nice with everyone else.

But, in the end, the real problem is this: they've already set themselves on the track of monetizing most or all Japanese Government debt. They should just get that done, default on the debt held by the BoJ and let what little is left of the sky fall down to the ground. That'll clear up the Government's balance sheets in a pretty quick hurry.