Shinzō Abe the new Shinto god?

It is ironic that Japanese Prime Minister Abe spoke of the next Lehman-scale crisis is just around the corner; he cited the collapsed of the commodities prices as a key indicator of that. What Prime Minister Abe doesn’t realize is that Japanese government & B.O.J. are key contributors to the bubbles & collapsed of most commodities prices, along with the Federal Reserve and the Chinese government. There is an old saying on Wall Street: “Money knows no origin, it goes where it is welcome & it stays where it is treated well”. What politician like Mr. Abe doesn’t understand is that punitive policies & red tapes in Japan are forcing capital abroad to fuel speculations & bubbles. In the last few decades we have seen more government & central banks led liquidity bubbles; what’re to follow were financial crises. It will be no difference this time, with all the major central banks engaging in all these financial shenanigans, the coming crisis will be devastating; whether it is in the form of a major collapse or it grinds lower & a lost decade or decades depends on how governments respond to the crisis – whether they learn any lessons from the past.

Thanks to governments & central banks around the world, we are in this generation of instant gratification; it’s all about what have you done for me lately. Companies around the world are piling up unprecedented amount of debts and engaging in the greatest financial engineering ever in history. CEOs are rewarded for short-termism so long as they contribute to share price appreciation even when those decisions affect the long term stability of the companies. The word long term doesn’t exist anymore: The phrase “get rich or die trying” should be the motto of this generation. We are seeing more stocks buy back & audacious take over funded by cheap papers courtesy of zero interest rate & quantitative easing.

It is even more ironic that Prime Minister Abe chose to welcome G-7 leaders at a Shinto temple. It is Shinto belief that enabled the blind following of the militarism policy of the Imperial Japan; and it is the same Shinto teaching that facilitated all those financial shenanigans from corporate leaders & the same belief help to circumvent disruptions & innovations from within. Whether it is Confucianism in China or Shintoism in Japan; they are tools to indoctrinate obedience & subservience at all cost. What Japan needs are whistleblowers to expose corporate maleficence & disruptors to spur innovations. The best things Prime Minister Abe can do is to make government smaller, reduce red tapes & have a much needed tax reform to spur innovations & entrepreneurism.

If the legendary Hawaiian singer Don Ho is to write a new song, it will not be “Tiny Bubbles”; instead it should be “Bubbles, Bubbles everywhere, where are you common sense”.