National debt is not the people's debt - The country is not a company - Breakdown of government bond holdings that still do not penetrate public opinion.
2024-01-09
Category:Japan
「国債等関係諸資料」令和5年6月末国債保有内訳 Photo by 財務省 (licenced by 財務省 )
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National debt is not a national debt.
The image at the beginning shows the breakdown of Japanese government bond holdings. I sometimes see people say that national debt is the nation's debt or that it is the same as corporate debt, but national debt is the government's debt, not the people's debt. Even if a country is compared to a company, companies do not borrow money from their employees. Debt comes from outside the company, and in this case, it involves purchasing Japanese government bonds from overseas. If most of the debt is overseas, it is natural that the company will default if it cannot be repaid. Purchases of Japanese government bonds from overseas account for ７.３%.
The Japanese government has assets equivalent to its liabilities.
If you really want to say that it is the same as a company, would you say that purchases in Japan are borrowed and borrowed within the company or within the group company? Yoichi Takahashi considers the Bank of Japan to be the same as a subsidiary of the government, and explains that it is the same in terms of consolidation, regardless of whether interest is charged. The Bank of Japan holds ５３.２% of Japanese government bonds. He is well known for introducing BS to show that the country holds government assets equivalent to the government's debts (excluding the holdings of the Bank of Japan). The total amount of government assets ranks first in the world, exceeding both the United States and China. Below is the balance sheet (BS) of Japan.
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Japanese government bonds are debt denominated in yen.
Furthermore, Japanese government bonds are mainly traded in yen, which means that there is no change in value based on foreign currencies. In the case of foreign currency transactions, if the value of your home currency plummets, the face value of your debt will rise accordingly. Suppose your country's currency drops to half its value. Alternatively, if the foreign currency used when trading government bonds doubles, the debt will also double, but since the transaction is in Japanese yen, there will be no effect at all. In an extreme case, former Prime Minister Aso said that repayment would be possible by increasing the number of yen bids. In this case, there will be inflation and the value of the yen will fall, but the theory is that the debt can be repaid because it is the face value of the yen. This was actually said by Taro Aso, a former Prime Minister and former Minister of Finance.
Japan, the world's largest creditor country
Secondly, the Japanese government is also the world's No. １ creditor country. In other words, they have foreign bonds and foreign assets. The fact that we are currently talking about national debt as a problem is actually making a fuss about only the debt part, and in fact, Japan has the most foreign assets in the world. This assumes that the government bonds are denominated in yen as mentioned earlier, and if more yen is printed, the value of the yen will fall and the yen will become weaker. If you do this, overseas assets purchased in dollars or euros will increase in value when converted to yen, so the difference will be a large income. Even with the current depreciation of the yen, a large profit margin was generated due to the increase in the valuation of overseas assets.
Print more yen up to 2% inflation rate
Representative Sanae Takaichi has advocated the ``Japanese Economic Resilience Plan,'' which calls for a temporary freeze on primary balance (PB) regulations and calls for industrial investment through the issuance of government bonds. She says that even if inflation were caused by printing more yen, it would not have a big impact if the inflation rate was less than ２%. Currently, the yen is depreciating due to the difference in interest rates due to the Fed's interest rate hikes, but the original goal is to induce a depreciation of the yen through the issuance of government bonds and increase the number of bonds, strengthen international competitiveness, and increase wages and tax revenues through rising prices. If the manufacturing industry returns to Japan due to the weak yen, GDP and tax revenue will increase, and government debt can be reduced. For now, this is just the effect of a weaker yen due to interest rate differences, but we are already seeing significant results.
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Public opinion without examining Abenomics - there is no point in criticizing it based on contradictory premises.
There are some surveys and opinions in public opinion that Abenomics has ruined Japan, but is that true? First of all, what is Abenomics? Were you asking people who answered the same question as in the poll, or were you asking people you didn't know? I wonder if asking someone I don't know will give me the results I expected. First, let's review the three arrows of Abenomics.
Three arrows of Abenomics
Bold monetary policyFlexible fiscal policyGrowth strategy to stimulate private investment
Monetary policy is still ongoing, but former Prime Minister Abe has said that the consumption tax increase was decided in advance and was carried out at a time when it could not be postponed, so he was unable to fire a second arrow. In other words, Abenomics is actually the first arrow in a variety of environments. In other words, I would understand if there was an evaluation of the fact that it did not advance to the second stage, but I have doubts about evaluating Abenomics itself.
Next, I will list some of the achievements of Abenomics.
Main achievements of Abenomics
The total national and local tax revenue will reach a record high of 107 trillion yen in fiscal 2019, up from 78.7 trillion yen in fiscal 2012. The stock price, which was around 8,000 yen, rose to over 24,000 yen under the Abe administration. Public pension investment profits increased by 57.6 trillion yen in seven and a half years. The effective job opening ratio was 83 job openings for every 100 people in 2012, and 164 job openings for every 100 people in 2019. Business operators improved their treatment due to the labor shortage. The minimum hourly wage rose from 749 yen in 2012 to 901 yen in 2019. The rate of children from single-parent households going on to university increased significantly from 23.9% to 41.9%.
Sanaenomics (Japanese Economic Resilience Plan) will be published. Representative Sanae Takaichi announced a policy to carry on Abenomics during the last presidential election.
Sanaenomics three arrows
Financial easingFlexible fiscal stimulus in times of emergencyBold crisis management investment/growth investment
What they have in common is that monetary easing policy will continue, and if the Takauchi Cabinet is elected, the government will implement aggressive fiscal policy.
The fact that the Japanese government's balance sheet was introduced for the first time in 1995 means that the Japanese government did not have the concept of strategic investment, which companies take for granted. How can you invest without a balance sheet or cash flow statement? It was only a matter of being able to compare the income and expenditure for a single year, or the previous year. The term "primary balance" has come to be used like crazy. At that time, Japan believed that deregulation would revive the economy, and the government repeatedly took the approach of relaxing regulations through legal revisions.
As a result, the Japanese government was unable to rebuild the national economy or make strategic investments for economic growth after the collapse of the bubble, which was an unprecedented economic crisis. More than 30 years have passed since we stubbornly closed the doors. Then, companies moved their manufacturing sectors to emerging countries, and GDP and tax revenues mainly went to neighboring countries such as China, creating a dual wage structure of dispatched labor in order to prevent an increase in the number of unemployed people in Japan. . The economic disparity that arose from this process is said to be one of the causes of the current declining birthrate.
So, has Abenomics ruined Japan? Would that also mean denying Sanaenomics? Or will we continue to turn down investments from the government as we have been doing, paying close attention to the primary balance under the guidance of the Ministry of Finance and listening to the beautiful words of fiscal consolidation? The point of contention should be to gather opinions on whether or not bold fiscal spending by the government is necessary. In any case, regardless of whether the policy is better or not, there are parts where it seems like the point at issue is not policy at all, but just an extension of a personal attack, which is unfortunate.
30 years lost as a result of passive fiscal policy
In other words, those who claim that government debt is bad have the completely opposite idea. What ruined Japan after the bursting of the bubble was rather the primary balance discipline, the inability to focus on single-year income and expenditures and to make long-term investments. Japan tightened its finances in the most critical economic situation. If it is the same as a company, when the company is in crisis, the company's safe is closed like a shell, and for the past ３０ years, the company has been operating in a state of poverty and not being able to make long-term investments. This is the so-called curse of PB by the Ministry of Finance.
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Vaccine class action lawsuit initiated by bereaved families - Causal relationship between vaccines and tragedy to be explored on a global scale.
Families of people who died in Japan due to the coronavirus vaccine have started a class action lawsuit. It seems like it has finally begun. As the coronavirus spread throughout the world as a pandemic, vaccines spread as if to follow it. Used by almost all countries.
The dangers of the vaccine, which had a significantly shortened testing period, have been known from the beginning. In Japan, a research team at Kyoto University discovered the phenomenon of vaccine fragments remaining in the blood and presented the findings at an academic conference. It can be said that the harmful effects of residual vaccine fragments on all immune-related reactions are unknown. However, its harmful effects have not been scientifically verified.
The vaccine itself has not been tested or scientifically proven. It is a matter of course that the harmful effects have not been scientifically proven. Even if the plaintiff files a lawsuit, it is likely that the conclusion will be that the causal relationship cannot be determined. However, once this vaccine undergoes formal testing, the causal relationship may become clearer. It will take more than 10 years.
This problem is similar to war in some respects. It is a collective truth that we turn a blind eye to the sacrifices of a few people in order to protect the majority of society. The world is enveloped in this collective truth, and it is also true that tragedies that appear to be caused by vaccines are occurring in every country. The WHO is also silent on this matter. Interpretations and solutions to this worldwide choice of life will probably be completely different depending on the country.
Possibility of the world's largest oil field off the coast of Izura, Ibaraki Prefecture - Hope for investigation and mining including security.
It is estimated that there is a huge oil field off the coast of Izura in Ibaraki Prefecture. A slag called carbonate concrete was formed by the bond between calcium and carbon, and the origin of carbon was unclear by research teams at Ibaraki University and Hokkaido University who found that it was natural gas. From the area of ??the reef, the total amount of natural gas ejected from the seabed is estimated, and the fact that natural gas is emitted means that there is a high possibility that oil resources are buried under it. If oil resources are discovered, they will be one of the largest in the world.
There seems to be an opinion that it is cheaper to buy oil from abroad as before because it takes a lot of time and cost from investigation to mining, but as a problem including security before the economic point of view. I want you to proceed with the investigation. In the first place, QUAD is the area where oil tankers pass from the Middle East, and China is trying to control it, and its original purpose is to prevent those movements.
What if oil comes out in Japan? Will the Spratly Islands issue and the Taiwan Strait issue become less important to Japan? No, it wouldn't be. China is cleverly developing oil resource diplomacy, which is a card of further threat to Asian countries. Achieving a free and open Indo-Pacific by QUAD could sell Japanese oil to Asian countries and reduce China's influence on the Spratly Islands relatively. I would like the country to discuss the overall benefits of having resources, not just the perspective of which is cheaper.
Trump was impressed by former Prime Minister Abe's presentation skills during his visit to Trump Tower - Strong friendship between Japan and the US leaders.
Former Prime Minister Abe visited Trump Tower
South Korea with different objectives as usual
Specific explanation of Japan's contribution
Abe's presentation that impressed Trump
A strong friendship that only businessmen can understand
The impression is that the relationship between former Prime Minister Abe and former President Trump was that of businessmen. It is often thought that businessmen are in a relationship where they take advantage of others based on utilitarianism, but that is not the case in this case. Before Trump won the presidential election and took office as president, former Prime Minister Abe visited Trump Tower.
South Korean Foreign Minister Kang Kyung-wha tried to do the same thing in the next presidential election, but it appeared that South Korea was desperately trying to outdo Japan. Former Prime Minister Abe's objectives are completely different. Abe is said to have personally given the presentation at Trump Tower.
Mr. Trump did not have much knowledge about Japan, viewed the deficit on the U.S. side in Japan-U.S. trade as a problem, and questioned the cost sharing of the Seventh Fleet under the Japan-U.S. Security Treaty. Mr. Abe appealed to Mr. Trump about Japan's position on that question. He explained how much Japan contributes to the American economy, and how Japan contributes to the stability of the Asian region, both in terms of location and cost burden for the Seventh Fleet.
Mr. Trump was a businessman, and Mr. Abe considered himself a salesman for Japan. Mr. Trump must have watched countless business meetings and internal presentations, but he was taken aback by Mr. Abe's proposal, calling it "great." This included the QUAD concept. When Trump later visited Japan, Abe locked him in a separate room and gave the presentation himself again.
There are many politicians and national leaders who have nothing to do with business, but Mr. Trump and Mr. Abe appear to have been formed through mutual understanding between businessmen. Business is about carefully calculating the other party's position, the other party's economy, and the development of both parties, making plans, sharing them, and implementing them. It is only natural that we should respect both parties who have sincerely faced this issue and put it into practice.
World's First Anti-Racism Bill - Proposed by Japan, a Permanent Member of the League of Nations.
I wonder if Japan appears in world history around the time of the Sino-Japanese War. The world took note of the great accomplishments of the eastern island nation, and the West, which had considered China a great power, came to call China the ``sleeping lion.''
The next great achievement was the Russo-Japanese War. Heihachiro Togo, who won the Battle of the Sea of Japan, was featured on the front page of newspapers around the world, and is said to be the first Japanese person to be featured on the front page of a newspaper around the world. After that, Japan rose to the forefront of the world and became a permanent member of the League of Nations in 1919.
In 1919, Japan became the first country in the world to propose a bill to eliminate racial discrimination at the United Nations. Already during this period, Japan objected to the West's domination of Asia. Former Foreign Minister Nobuaki Makino criticized the racial discrimination caused by Western countries' colonies in various parts of Asia. (Nobuaki Makino: second from the left in the front row of the photo)
This is the world's first international organization to introduce a bill on the elimination of racial discrimination, with two representatives from France and two from Italy in favor, 11 from Greece, the Republic of China, Portugal, Czechoslovakia, the Kingdom of Serbs, the Kingdom of Croatia, Slovenes and Japan, and the United Kingdom against it. ・There were 5 people from the United States, Poland, Brazil, and Romania, so there was a majority in favor.
Many Japanese people think that the elimination of racial discrimination is a concept developed from the West, but in fact, it was Japan that first called for the elimination of racial discrimination.
At the time, Britain was abducting black people from Africa and trading them as slaves to the Americas. America used black slaves to grow cheap agricultural products and export them to countries around the world. The American representative argued that this was a no-go because it was not unanimous. Is there such a thing as a principle of unanimity among the 16 members?
Makino once objected, saying that the bill could be passed by majority vote, but the bill was rejected in accordance with the principle of unanimity in the United States, which was already a superpower at the time. This was nine years after the annexation of Japan and Korea and 22 years before the start of the Greater East Asia War.
South Korea continues to say that it was discriminated against and deprived of by Japan, but Japan was fighting in international organizations on a completely different scale. The annexation of Japan and South Korea and the annexation of Taiwan are assimilation policies that are completely different from Western-style colonies. Assimilation policy means that the Japanese, Koreans, and Taiwanese living there have equal rights and are subject to the rule of law.
The Greater East Asia War was a war between Japan and the white countries that ruled Asia, based on the idea that all Asian countries should maintain their independence and co-prosperity. The Greater East Asia Co-prosperity Sphere concept was not something that suddenly appeared on a whim.
Korea claims that it suffered racial discrimination during the annexation of Japan and Korea, but it seems that they do not really understand what racial discrimination at that time meant.
TSE market capitalization returns to number one in Asia - Expectations for Japan's competitiveness after withdrawal from Chinese investment?
On the 11th, the total market capitalization of stocks listed on the Tokyo Stock Exchange exceeded that of China's Shanghai Stock Exchange. It seems that the TSE has returned to the top spot in Asia for the first time in about three and a half years. Various things are being talked about, including a move away from investment in China and expectations for Japan's competitiveness to recover. In the first place, the current strange international situation is the result of developed countries investing in dictatorial countries such as China and Russia.
In 1973, the G7 once accounted for 65% of world GDP. That's the GDP of only seven countries. This was seen as a monopoly on the world's wealth, and problems in developing countries were discussed. At that time, the world was also in the era of the Cold War, but the Cold War itself was at least a better era than now. Economic and political exchanges between communist and capitalist countries were closed off and blocked by a barrier called the Iron Curtain. Russia and China are calling for a return to the Cold War era, but is that really the case? One could argue that the Cold War era was the era with the least number of wars in the world.
After the collapse of the Soviet Union, the countries of Eastern Europe collapsed one after another. China also pursued a path of liberation and reform, aiming to become an open nation. After the fall of the Berlin Wall, the world went crazy and thought the era of tension was over, but that was not the case at all. The loss of balance in the world has led to localized conflicts. Issues that were not highlighted during the Cold War era have been exposed as tensions have eased. Various things have been said about this, and while that may be true, I believe that it is essentially a matter of money.
What began with the collapse of the Cold War was global capital, or so-called globalism. Globalists are talked about as a conspiracy theory on social media, but there is no interest in knowing who is behind it. The problem is that the era when business and investment in authoritarian countries began can be thought of as the collapse of the Cold War. Did they simply think that the world would turn to democracy once communism fell? What is clear today is that the country has spent decades cultivating a state in which its domestic market is opened up to the capitalist state as much as possible, and wealth is distributed by a dictator.
The Cold War era was a great time. It was a time when the world was divided based on ideology, and it was a rational and peaceful time. The world should once again create an iron curtain of democratic and non-democratic countries. We no longer need to care how much wealth the G7 makes. Only countries that choose the democratic state form can receive democratic investment. As long as we continue to be a dictatorial nation, we should just live with the economy of dictatorial nations. You should rethink that. However, there will be some remorse for the times when we grew a nation that grew fat and threatened us with weapons.
