More power than “structural reform” and the spinning tire of production

Ducati pistonThe all aluminum piston out of a Ducati 749Rcc engine which we are rebuilding while thinking about when the central bank of Japan’s structural reforms (why do I keep thinking structural reform is a euphemism for FOREX trading?) will kick in.  Good question. When will these “structural reforms” kick in with to-date a massive program of quantitative easing – worth $1.4tn (£923bn) that has doubled Japan’s money supply – in what has been described as a “drastic bid to restore the economy to health and banish [banished forever to the outer kingdom] the deflation” that has “dogged the country” for more than a decade? Mr. Kuroda, any possibility of injecting that enormous amount of loot into small entrepreneurial businesses and producers who actually make a difference in economies? Why not force reform in the Japanese postal system like former PM Koizumi attempted and clean out that estimated US$2.9 trillion putting it to better use than dumping it into just industry (only if you are closely connected to the LDP), transportation, the military, and social programs?  This piston connected to this Ducati engine delivers more power than Japan’s entire economy so where is all the loot?

All digital money…

The US Federal Reserve – an enthusiastic supporter of so-called “unconventional” monetary policies such as QE – is spending $85bn a month, only just above the $70bn planned by the BoJ, in an economy almost three times the size of Japan’s.

spinning wheelSince Shinzo Abe took office, a set of policies known as Abenomics under Japan’s central bank, has purchased ¥7 trillion yen (£46bn) of government bonds each month using electronically created money, with the aim of “rekindling demand and pushing up prices and wages”. The electronics are more dependable on this Ducati motorcycle than all that electronically created money. The prices have gone up but there is no corresponding rise in wages and there is a ten percent consumption tax coming next year.  Japan’s economy is spinning like this suspended tire with no real stable long term production.

And now, some Michael Jackson for the Central Bank of Japan…

Michael Jackson – They Don’t Care About Us

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2 thoughts on “More power than “structural reform” and the spinning tire of production

  1. BD wrote: Mr. Kuroda, any possibility of injecting that enormous amount of loot into small entrepreneurial businesses and producers who actually make a fucking difference in economies?

    BD, just out of curiosity, don’t you have access to low interest bank loans? My understanding is that entrepreneurs like you can borrow quite easily. And from your previous comments, I thought that you had already invested in more than adiquate capacity including space, tools and a pneumatic tire changer. Isn’t your problem more on the demand side than on the production capacity side? Our debt-free business has a 30% profit margin and a very healthy ROI in Japan (We pay a huge corp tax bill.). We don’t need to borrow as our expansion has been self-funded, but if we did need money we would be first in line for the 1% interest business loan.

  2. Loan is in the process through the local over site office. Loans are selective. How can you run a business, not ours necessarily, when motorcycle production is flat and most of the motorcycles are exported?

    ROI on a selective well defined business not necessarily based solely on large scale manufacturing.

    Youth aren’t riding motorcycles. No wages to pay for the motorcycles. The cycle continues.

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