Japanese Women Armed with Chainsaws…

Our hat is off. Our knees are bent. Our mouth hangs open.

We are amazed. Grateful. And appalled.

What will the Japanese do next, we wonder?

We are amazed because we have seen the international test results. On IQ tests, the Japanese score 10 points higher than the world average. And yet there they are…doing the stupidest things we can imagine.

We are grateful, because Japan has been leading the world in economic absurdity — bubbles in stocks and real estate…bailouts…ZIRP…and QE.

And there is no economic policy so ridiculous that US policymakers won’t give it a whirl. Whither thou goest, O, Nippon, we’re right behind you.

Abe, you’ve got to be kidding

Finally, we are appalled…

What kind of a moron would believe government employees should decide what industries are successful?

How would they know, for example, better than people in the forestry business that timber would pay off?

And why does anyone think that encouraging young women to go out into the woods and do hard, dangerous work will be good for the economy?

It may be fun to watch…and it may be fun for girls who want fresh air and boys who want female company…but as a serious economic policy? Abe, you’ve got to be kidding.

But this is always the problem with world improvers: They are deadly serious. Bloomberg is on the story:

Japanese Women Armed With Chainsaws Head to the Hills Under Abe’s Plan

Junko Otsuka quit her job in Tokyo and headed for the woods, swapping a computer for a bush cutter and her air-conditioned office for the side of a mountain. She was part of a new wave of women taking forestry jobs, the result of economic, social and environmental policies sprouting in Prime Minister Shinzō Abe’s Japan.

Otsuka, a 30-year-old graduate from University of Tokyo, said she’s fine with the 20% pay cut to be the first female logger at Tokyo Chainsaws, a lumber company. The Sugi and Hinoki trees she harvests — cedars and cypresses in Japan — are used to build local homes under the government’s program to encourage the use of domestic wood.

"When I studied forestry at university, I learned that trees on Japanese mountains, ripe for harvest decades after planting, were left untouched as nobody wanted to do the job," Otsuka said in an interview during a break from her work on a 95 degree-Fahrenheit (35 Celsius) day on the side of Mount Mitake, about 40 miles from the center of Tokyo. "I am in the place where I should be."

Less than 70% of Japanese women between 25 years and 54 years old have jobs, the lowest rate among the world’s richest countries, according to estimates by Japan’s Cabinet Office. The nation’s workforce may swell by more than seven million people and gross domestic product could jump by as much as 13% if participation by women equaled that of men, Goldman Sachs Group Inc. said in a report May 6.

The final collapse

More women sweating in the fields and forests. More of those neglected trees cut down. More paper and sawmills, their smokestacks hot with the fiery commerce.

Is that great, or what?

What, you can’t see why that’s such a good thing?

Well, clearly you do not have a Ph.D. in economics! And you are not running a major world economy.

With his ‘three arrows’ program, Japan’s prime minister, Shinzō Abe, vowed to get the numbers up. More inflation. More GDP. More this…more that.

Would the Japanese be better off?

Hey, don’t bother us serious economists with impertinent questions. You know perfectly well we can only work with quantity, not quality. We’re digital boys now. If you can’t measure it — in numbers — we can’t do anything about it.

So let’s not talk about it, okay?

But of all the numbers Japan has added, one stands out. In 1980, Japan’s public debt was only half its annual GDP. Now, it’s two and a half times its annual GDP.

In other words, it would take two and a half years of total output to pay back the debt the government has run up — almost all of it over the last 30 years.

And remember, the government took on this debt to boost GDP. As you can see, the approach failed. For every extra dollar of output, government debt grew by $4.

And if you add in private debt, the total comes to 500% of GDP.

Clearly, it is time for a rethink. More debt has not solved Japan’s debt problem.

But along cometh the aforementioned Shinzō Abe with a plan…

His program?

More! More debt! More spending! More ZIRP! More QE! More women in the woods. More of everything that has brought Japan to the brink of desperation.

The yield on Japan’s 10-year note is a vanishing 0.51%. With so much debt, even a slight nod towards ‘normalization’ of interest rates would be devastating.

At these ultra-low financing costs, Japanese GDP barely grows. If government bond yields were to rise to, say, 3%, Japan’s economy would collapse into depression.

And normalization IS coming. It always does. Japan’s retirees are no longer saving. Japan’s exporters are no longer bringing in the big bucks from overseas. And investors (lenders) are bound to realize, sooner or later, that Japan can never pay its debts.

This will mean less money to lend…higher financing costs…and, ultimately, the final collapse of the Japanese delusion.


Bill Bonner
For Markets and Money

From the Archives…

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Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America’s most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind Markets and Money.

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