Russell Napier: “We Are On The Eve Of A Deflationary Shock ” | Zero Hedge
Russell Napier: “We Are On The Eve Of A Deflationary Shock ” | Zero Hedge.
In the aftermath of Ray Dalio’s conversion to an inflationistaearlier this year (even if he has since once again been pushing a deflationary agenda when he once again went long Treasurys in late September as Zero Hedge reported previously), which promptly got such permanent deflationists as David Rosenberg to change their multi-year tune, it seemed as if there was nobody left in the deflationary camp. Which, implicitly meant Bernanke was winning as the world’s expectations for a return to inflation were rising (remember: hyperinflation has nothing to do with inflation per se, and everything to do with loss of confidence in a currency, even if formerly a reserve), and also meant the Fed would need to doless to further its reflationary agenda.
Alas, as the Taper Tantrum and the shock upon its subsequent withdrawal showed, not to mention the recent outright disinflation in Europe, any rumors that the Fed was back in control were wildly exagerated, and here we find ourselves, entering the last month of 2013 with loud speculation that not only will the BOJ increase its own QE but the ECB itself will have no choice but to join the QE party (even as the Fed may or may not taper although it is increasingly looking likely that with an economy this late in the cycle, Yellen will simply forego tapering altogether, and may even navigate Bernanke’s chopper) in order to stoke even more inflation as the current amount was, surprise, insufficient. We ignore all discussion of what such a reckless action would mean for the credibility of fiat, although we remind readers that right now both the US and Japan monetize 70% of their gross bond issuance, and thus deficit.
So with everyone expecting deflation to have been conquered early in 2013, only for events to once again show that neither is it conquered, nor are central banks in charge despite having a collective balance sheet of over $10 trillion, we have once again gotten a demonstration of Bob Farrell’s rule #9: ” When all the experts and forecasts agree – something else is going to happen.” And yet, that is not exactly true: not all “experts” think the Fed has won the fight, and the deflation has been conquered (what the Fed’s response to even more deflation will be is a separate topic altogether, but it is not rocket surgery to assume “more of the same” until one day the Fed breaks the dollar itself). CLSA’s Russell Napier has just written perhaps the most vocal pro-deflation piece we have read in a long time. It is titled, appropriately enough, “An ill wind.”
Selected extracts from CLSA’s Russell Napier:
Inflation has fallen to 1.10/0 in the USA and 0.7% in the Eurozone and we are now perilously close to deflation. Reflation is needed to relieve debt burdens throughout society and in doing so to bolster corporate equity. Investors are cheering the direct impact of QE on their equity valuations, but ignoring its failure to produce sufficient nominal-GDP growth to reduce debt. In a market where such bad news has been seen as good news (as it leads to more QE.), the reality of QE’s failure will become bad news as we head towards deflation.
When US inflation fell below 1% in 1998, 2001-02 and 2008-09, equity investors saw major losses. If a similar deflation shock hits us now, those losses will be exacerbated, since the available monetary responses are much more limited than they were in the past.
For investors who cannot take the risk of leaving the bull-market party too early, this report focuses on three leading indicators of imminent deflation: copper prices; inflation expectations, as implied by the difference in yield between five-year Treasuries and Treasury inflation-protected securities (TIPS); and the spread on BAA corporate bonds.
With US inflation already dangerously low, a significant decline in copper prices would signal a major deflation shock. Investors should sell equities if the five-year TIPS-implied inflation rate falls from the current 1.86% to 1.50% or below, or if the spread on BAA corporate bonds rises from the current 262bps to 300bps or higher.
Deflationary winds are strengthening Japanese corporations continue to cut their US-dollar selling prices, forcing Chinese and Korean exporters to follow suit, A further major fall in the yen would ratchet up the pressure. Meanwhile, broad-money growth remains anaemic across the developed world. In the USA, the Fed’s failure to create normal broad-money growth is intensifying as bank credit growth slows rapidly, while in the Eurozone, bank credit to the private sector is now contracting more rapidly than it did in 2009. The failure of monetary policy to defeat deflation is about to become apparent, with dire consequences for equity prices.
Conclusion
We are on the eve of a deflationary shock which will likely reduce equity valuations from very high to very low levels. This research seeks to provide investors with some lead indicators as to when the current disinflationary forces erupt into a destructive deflation. Each investor must decide for themselves just how close to midnight they want to leave this particular party. The advice of Solid Ground is leave now as it is increasingly likely that one event will be the catalyst to very rapidly change inflationary into deflationary expectations. Indeed, when key prices are already falling across the globe,one should expect one key major credit event to occur.
Three times since 1997 inflation has fallen below 1% with very negative impacts for equity investors. On all three occasions an existing low level of inflation was forced lower by dramatic events: the bankruptcy of Russia and collapse of LTCM in 1998; the terrorist attacks of 11 September 2001; and the bankruptcy of Lehman Brothers in September 2008. While nobody would attribute the 11 September atrocity with extant global deflationary forces, the other two episodes can clearly be associated with such forces. So perhaps it is global deflationary forces creating a bankruptcy event, somewhere in the world, that is the catalyst for a sudden change in inflationary expectations in the developed world. It can all happen very quickly; and it is dangerous to stay at an equity party driven by disinflation when it can spill so rapidly into deflation.
In 1998 falling export prices triggered a Russian default, and in 2008 falling US house prices triggered the Lehman bankruptcy. Going back further, deflation in the oil price in 1982 produced a Mexican default and a credit event which threatened to bring down the US banking system. Deflation in these key prices produced a credit event which rapidly produced a major reassessment of the outlook for the general price level. Across the world today we see falling commodity prices and, primarily due to the weak yen, falling manufactured-goods prices. When there is plenty of leverage in the system and any key price starts to decline then a credit event and a sudden change in inflationary expectations are much more possible than the consensus believes. So watch the TIPS, BAA bond spreads and copper if you must, but this analyst prefers to observe the party from outside.
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We wonder how long before the lack of controlled (that being the key word) inflation will the recent inflationary converts throw in the towel again and once again start pounding the deflationary drum. Actually, in retrospect, we couldn’t care less. The bigger question, as has been the case from Day 1 of QE, is how long until the disproportionate response to even more deflation will the Fed react, as it always does, with even moar stimulus, until it finally does just enough to force consensus to finally begin doubting the viability of the current reserve currency under the mentorship of the Marriner Eccles monetary mandarins. Because as we never tire, no monetary system (or nation, or civilization for that matter) has ever ceased to exist due to hyperdeflation – the cause has always been the response of the ruling class to said deflation.
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Grant Williams On Flushing The Impurities Of QE From The System | Zero Hedge
Grant Williams On Flushing The Impurities Of QE From The System | Zero Hedge.
Grant Williams “pulls no punches” in this all-encompassing presentation as the “Things That Make You Go Hmmm” author reflects on what is behind us and looks ahead at the ugly reality that we will face when “the impurities of QE are finally flushed from the system.” Central bankers of today have “changed everything” he chides, “in ways that will ultimately end in disaster.” Following extraordinarily easy monetary policies across all of the world’s central banks, Williams explains why “we are now near the popping point of the 3rd major bubble of the last 15 years,” each bigger than the last. The only way Janet Yellen avoids being at the helm when this ship goes down is to blow an even bigger bubble than Bernanke’s government bond experiment, “which is highly unlikely.” From how QE works, why many don’t “feel” wealthy anymore, to the fact that “the geniuses that gave this thing life, don’t have the guts to kill it,” Williams warns, ominously, “the bills have come due on the blissful latest 30 years.”
Starting at around 2:30… Williams introduces the ‘extraordinary’ differences with today’s crop of central bankers
5:30 The bubble blowing begins (and ends)
6:45 How QE Works and “why the geniuses that gave this thing life, don’t have the guts to kill it.”
7:45 Investing Now and Then
9:00 “The bills have come due on the blissful latst 30 years”
9:30 The implications for markets
11:00 BoJ specifics…
11:30 Why rotating from bonds to stocks is nuts – even though bonds are in a bubble
13:00 China is flashing red… “if you thikn that doesn’t mean anything, then you’re wrong”
14:00 Aussie macro and micro economics
18:30 Pension Funds disaster pending – return projections are entirely wrong
22:30 Central Deviousness
23:45 Where Does That Leave Us? – “The Taper is not going to happen in any meaningful way” – The US economy is simply not strong enough.
26:00 So What Do We Do
30:00 “Be Brave – Take your money out of the markets and go to cash.”
31:00 “Once the impurities of QE are flushed from the system, we can go back to investing in a world that is understandable”
31:30 We’ve been here before…
“Returning to a world with which we are familiar is going to require either some real magic on the parts of Draghi, Kuroda, Carney, and soon to be Yellen; or some kind of tornado that sweeps away everything in its path and allows the world to build again from more solid foundations.”
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East African nations agree on monetary union – Africa – Al Jazeera English
East African nations agree on monetary union – Africa – Al Jazeera English.
The heads of state signed the deal in Uganda’s capital, Kampala [AP]
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The leaders of five East African countries have signed a protocol laying the groundwork for a monetary union within 10 years that they expect will expand regional trade.
Heads of state of Kenya, Tanzania, Uganda, Rwanda and Burundi, which have already signed a common market and a single customs union, said on Saturday that the protocol would allow them to progressively converge their currencies. In the run-up to achieving a common currency, the East African Community (EAC) nations aim to harmonise monetary and fiscal policies and establish a common central bank. Kenya, Uganda, Tanzania and Rwanda already present their budgets simultaneously every June. The plan by the region of about 135 million people, a new frontier for oil and gas exploration, is also meant to draw foreign investment and wean EAC countries off external aid. “The promise of economic development and prosperity hinges on our integration,” said Kenya’s President Uhuru Kenyatta. “Businesses will find more freedom to trade and invest more widely, and foreign investors will find additional, irresistible reasons to pitch tent in our region,” said Kenyatta, leader of the biggest economy in east Africa. Kenyatta, who is due to face trial at the International Criminal Court on crimes against humanity charges in February, took over the chairmanship of the bloc from Ugandan President Yoweri Museveni, hosting the summit. Kenya has launched a $13.8 billion Chinese-built railway that aims to cut transport costs, part of regional plans that also include building new ports and railways. Challenges ahead Landlocked Uganda and Kenya have discovered oil, while Tanzania has vast natural gas reserves, which require improved infrastructure and foreign investment so they can be exploited. Tanzania, where the bloc’s secretariat is based, has complained that it has been sidelined in discussions to plan these projects, but Kenyatta said the EAC was still united. Kenneth Kitariko, chief executive officer at African Alliance Uganda, an investment advisory firm, said the monetary union would boost efficiency in the region’s economy estimated at about $85 billion in combined gross domestic product. “In a monetary union, the absence of currency risk provides a greater incentive to trade,” he said. Kitariko said, however, that achieving a successful monetary union would require convergence of the union’s economies, hinting that some challenges lay ahead. “Adjusting to a single monetary and exchange rate policy is an inescapable feature of monetary union … but this will take time and may be painful for some,” he said, referring to the fact that some countries may struggle to meet agreed benchmarks. |
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Apache Canada’s Zama City Spill Leaks Waste Water; Second Reported
Apache Canada’s Zama City Spill Leaks Waste Water; Second Reported.
CALGARY – Alberta’s energy regulator is investigating another pipeline leak of waste water.
Apache Canada Ltd. reported one of its operator’s discovered the leak on Oct. 25 at its Shekilie field northwest of Zama City and the line was immediately shut in.
The company also says an investigation found the leak began on Oct. 3 and the amount of waste water that leaked was about 1.8 million litres.
Waste water that is extracted during oil and natural gas operations contains oil, salt and other minerals.
Darin Barter of Alberta Energy Regulator confirms Apache reported the leak on Oct. 25 and says the agency won’t be able to confirm the amount that spilled until it completes its investigation.
Apache also says it has revised the volume of waste water that spilled from its pipeline in the same area in May to 15.4 million litres, up from its original report of 9.5 million litres.
In a news release dated Oct. 18, Apache it has determined that the pipeline started leaking on May 5, but it wasn’t discovered to be leaking until June 1.
Apache says the cause of the pipeline failure was stress corrosion cracking.
It says it was “installing real-time monitoring with SCADA (supervisory control and data acquisition) to the existing four water injection systems across Apache’s Zama operations area.”
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Economic Prosperity Ahead or A Train A Comin’ – Monty Pelerin’s World : Monty Pelerin’s World
Economic Prosperity Ahead or A Train A Comin’ – Monty Pelerin’s World : Monty Pelerin’s World.
Whether the light at the end of the economic tunnel represents sunshine or an on-coming train depends on whom you ask. I am of the opinion that it is a train a comin’. Economic matters cannot get better until we hit bottom and rebuild from the ashes. That need not be except government policies drive us there.
Government, especially the current one, has incented people to not work by providing overly long and generous benefits. Society has an obligation to take care of its less fortunate, but it does not have an obligation to encourage people to join that group and then make it comfortable enough that they have little incentive or ability to leave. The dole should not be a safety net, not a career choice!
One political party in particular has interest in seeing dependency grow. It forms a substantial part of their support and power. The creation of more dependents is the creation of more voters and more electoral success. No society can grow or recover when government deliberately undermines the need to work. That path leads to poverty and destruction.
Printing money is no substitute for effort. It does not create things or wealth. The myth of Keynesian economics is not the answer to a society that declines in labor force participation and has fewer productive people supporting more dependents. Incentives at the individual level must be changed in order to make work more desirable and attractive than welfare.
A society whose workforce is in decline is one that can pretend to live at former levels only by consuming the wealth and capital created by previous generations. This behavior is equivalent to the man who used to make $250,000 per year in a job and now is unemployed. To save face, he continues to live as if he is still earning at his previous rate. He achieves this short-run living style only by consuming the capital that he built up from years of hard work. At some point, he runs out of capital and must live as a pauper (or the modern equivalent of one).
Our economy and government both behave like this formerly rich man. Both are consuming the seed corn in order to maintain the appearance of well-being. Politicians will continue this behavior until the music stops. Hopefully when that happens there is enough left of society and freedom to allow a rejuvenation.
Many believe that government and its partner the Federal Reserve are wise and strong enough to avoid this crash. If printing money and spending money were a solution, there would be no poverty anywhere in the world. Even the poorest country has a government and can afford a printing press.
Thus far there has been no collapse. However, that is equivalent to the man who jumps off the Empire State building and is heard to say as he flashes by the fortieth floor: “So far, so good.” His fate was sealed when he jumped. Similarly, so is our economy’s. Economics has its own gravity. It is as powerful and immutable as that of physics.
“So far so good” is not acceptable for an economy. There has been no economic recovery since one was falsely declared in June of 2009. The distortions and mis-allocations imposed on the economy for the last several decades are cumulative and have finally reached that stage where they can no longer be covered up. The myth of a recovery is getting harder to maintain.
A complete cleansing of the mal-investments, distorted incentives and regulatory burdens must occur before a true recovery can take place.
Can the economy flutter around is some kind of air pocket at the fortieth floor for a year or even several before resuming its destiny with terra firma? Perhaps, but it cannot fly without wings and these have been removed by regulatory interference and economic interventions over the course of decades. They can re-grow, but not before a complete and total cleansing.
A major crash is coming. The dot.com bubble and the housing bubble were not crashes, at least as I imagine a crash. They were the beginnings of corrections that were aborted by government economic intervention. The country survived these two major bubbles, but only at the cost of making the next one bigger. Government did not save us from these two events. They created them and by deferring their correction assured the next one would be bigger and more painful.
The video below shows a train moving down a track. It struck me as a reasonable metaphor for our economy. The train represents market forces, slow but powerful. The train does not appear threatening. But, like markets, it represents a massive force. That the video is in slow motion exaggerates the surprise and the force.
Government may believe it is in control of the economy, but it is not. It may think it is influencing and controlling outcomes. To some degree it is and has. However the forces that have built up over decades of these interventions cannot, at some point, be controlled. The mismatch between Ben Bernanke, Barack Obama, the Federal establishment and all their dollars and regulations is about to be run over by the train that represents decades of suppressed market forces.
No government is a match for hundreds of millions of citizens who are represented by markets. Suppressing markets is suppressing the will of citizens. At some point markets dig in their heals and say enough. Then government is helpless.
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1974 Enders To Kissinger: “We Should Look Hard At Substantial Sales & Raid The Gold Market Once And For All” | Zero Hedge
Four years ago we exposed what appeared to be a ‘smoking gun’ of the Fed’s willingness to manipulate the price of gold. Then Fed-chair Burns noted the equivalency of gold and money, and furthermore pointed out that if the Fed does not control this core relationship, it would “easily frustrate our efforts to control world liquidity.” Through a “secret understanding in writing with the Bundesbank that Germany will not buy gold,” the cloak-and-dagger CB negotiations were exposed as far back as 1975. Recently, we exposed Paul Volcker’s fears of “PetroGold” and the importance of the US remaining “masters of gold.” Today, via a transcript of then Secretary of State Kissinger’s 1974 meeting we see how clearly they understood that demonetizing gold was a critical strategy to maintaining a dominant power position in the world, and “raiding the gold market once and for all.”
…
On June 3, 1975, Fed Chairman Arthur Burns, sent a “Memorandum For The President” to Gerald Ford, which among others CC:ed Secretary of State Henry Kissinger and future Fed Chairman Alan Greenspan, discussing gold, and specifically its fair value, a topic whose prominence, despite former president Nixon’s actions, had only managed to grow in the four short years since the abandonment of the gold standard in 1971. In a nutshell Burns’ entire argument revolves around the equivalency of gold and money, and furthermore points out that if the Fed does not control this core relationship, it would “easily frustrate our efforts to control world liquidity” but also “dangerously prejudge the shape of the future monetary system.”
Furthermore, the memo goes on to highlight the extensive level of gold price manipulation by central banks even after the gold standard has been formally abolished. The problem with accounting for gold at fair market value: the risk of massive liquidity creation, which in those long-gone days of 1975 “could result in the addition of up to $150 billion to the nominal value of countries’ reserves.” One only wonders what would happen today if gold was allowed to attain its fair price status. And the threat, according to Burns: “liquidity creation of such extraordinary magnitude would seriously endanger,perhaps even frustrate, out efforts and those of other prudent nations to get inflation under reasonable control.” Aside from the gratuitous observation that even 34 years ago it was painfully obvious how “massive” liquidity could and would result in runaway inflation and the Fed actually cared about this potential danger, what highlights the hypocrisy of the Fed is that when it comes to drowning the world in excess pieces of paper, only the United States should have the right to do so.
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Lastly, the memo presents a useful snapshot into the cloak-and-dagger, and highly nebulous world of CB negotiations and gold price manipulation:
“I have a secret understanding in writing with the Bundesbank that Germany will not buy gold, either from the market or from another government, at a price above the official price.”
Volcker’s 1974 “PetroGold” concerns…
First, here is what the S intentions vis-a-vis gold truly are when stripped away of all rhetoric:
U.S. objectives for world monetary system—a durable, stable system, with the SDR [ZH: or USD] as a strong reserve asset at its center — are incompatible with a continued important role for gold as a reserve asset.… It is the U.S. concern that any substantial increase now in the price at which official gold transactions are made would strengthen the position of gold in the system, and cripple the SDR [ZH: or USD].
In other words: gold can not be allowed to dominated a “durable, stable system”, and a rising gold price would cripple the reserve currency du jour: well known by most, but always better to see it admitted in official Top Secret correspondence.
Specifically, this is among the top secret paragraphs said on a cold night in March 1968:
If we want to have a chance to remain the masters of gold an international agreement on the rules of the game as outlined above seems to be a matter of urgency. We would fool ourselves in thinking that we have time enough to wait and see how the S.D.R.’s will develop. In fact, the challenge really seems to be to achieve by international agreement within a very short period of time what otherwise could only have been the outcome of a gradual development of many years.
And Now Kissinger’s 1974 Transcript…
Via Mike Krieger’s Liberty Blitzkrieg blog,
The following excerpts are from a transcript of a 1974 meeting held by the then Secretary of State Henry Kissinger and his staff. This particular meeting was held on April 25, and focused on an European Commission Proposal to revalue their gold assets. What follows is an incredible insight into the minds of powerful American leaders scheming to maintain power and show other nations their place. What is most significant is how clearly they understood that demonetizing gold was a critical strategy to maintaining a dominant power position in the world.
So to those who continue to say that “gold doesn’t matter” because it hasn’t been used as an official asset in the monetary system for decades, I say give me a break. In fact, the reality of gold having been largely demonetized makes it an even greater threat going forward if the U.S. does not have all the gold it claims to, and other nations have more than they admit to.
Thanks to In Gold We Trust for bringing this to my attention. Choice excerpts are provided below, and breaks in the conversation are denoted with an “…” Enjoy.
Secondly, Mr. Secretary, it does present an opportunity though—and we should try to negotiate for this—to move towards a demonetization of gold, to begin to get gold moving out of the system.
Secretary Kissinger: But how do you do that?
Mr. Enders: Well, there are several ways. One way is we could say to them that they would accept this kind of arrangement, provided that the gold were channelled out through an international agency—either in the IMF or a special pool—and sold into the market, so there would be gradual increases.
Secretary Kissinger: But the French would never go for this.
Mr. Enders: We can have a counter-proposal. There’s a further proposal—and that is that the IMF begin selling its gold—which is now 7 billion—to the world market, and we should try to negotiate that. That would begin the demonetization of gold.
Secretary Kissinger: Why are we so eager to get gold out of the system?
Mr. Enders: We were eager to get it out of the system—get started—because it’s a typical balancing of either forward or back. If this proposal goes back, it will go back into the centerpiece system.
Secretary Kissinger: But why is it against our interests? I understand the argument that it’s against our interest that the Europeans take a unilateral decision contrary to our policy. Why is it against our interest to have gold in the system?
Mr. Enders: It’s against our interest to have gold in the system because for it to remain there it would result in it being evaluated periodically. Although we have still some substantial gold holdings—about 11 billion—a larger part of the official gold in the world is concentrated in Western Europe. This gives them the dominant position in world reserves and the dominant means of creating reserves. We’ve been trying to get away from that into a system in which we can control—
…
Mr. Enders: Yes. But in order for them to do it anyway, they would have to be in violation of important articles of the IMF. So this would not be a total departure. (Laughter.) But there would be reluctance on the part of some Europeans to do this. We could also make it less interesting for them by beginning to sell our own gold in the market, and this would put pressure on them.
Mr. Maw: Why wouldn’t that fit if we start to sell our own gold at a price?
Secretary Kissinger: But how the hell could this happen without our knowing about it ahead of time?
Mr. Hartman: We’ve had consultations on it ahead of time. Several of them have come to ask us to express our views. And I think the reason they’re coming now to ask about it is because they know we have a generally negative view.
Mr. Enders: So I think we should try to break it, I think, as a first position—unless they’re willing to assign some form of demonetizing arrangement.
Secretary Kissinger: But, first of all, that’s impossible for the French.
Mr. Enders: Well, it’s impossible for the French under the Pompidou Government. Would it be necessarily under a future French Government? We should test that.
Secretary Kissinger: If they have gold to settle current accounts, we’ll be faced, sooner or later, with the same proposition again. Then others will be asked to join this settlement thing.
Isn’t this what they’re doing?
Mr. Enders: It seems to me, Mr. Secretary, that we should try—not rule out, a priori, a demonetizing scenario, because we can both gain by this. That liberates gold at a higher price. We have gold, and some of the Europeans have gold. Our interests join theirs. This would be helpful; and it would also, on the other hand, gradually remove this dominant position that the Europeans have had in economic terms.
…
Mr. Rush: Well, I think probably I do. The question is: Suppose they go ahead on their own anyway. What then?
Secretary Kissinger: We’ll bust them.
Mr. Enders: I think we should look very hard then, Ken, at very substantial sales of gold—U.S. gold on the market—to raid the gold market once and for all.
Mr. Rush: I’m not sure we could do it.
Secretary Kissinger: If they go ahead on their own against our position on something that we consider central to our interests, we’ve got to show them that that they can’t get away with it. Hopefully, we should have the right position. But we just cannot let them get away with these unilateral steps all the time.
Full transcript here.
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Japanese (And American) Governments Go to Extreme Lengths to Cover Up Fukushima and Other Disasters
Japan and the U.S. are doing everything they can to cover up the danger of the Fukushima crisis.
The Daily Beast notes:
The Japanese government, which already has a long history of cover-ups and opaqueness, is on its way to becoming even less open and transparent after the lower house the Diet, Japan’s parliament, passed the Designated Secrets Bill on Tuesday. With new powers to classify nearly anything as a state secret and harsh punishments for leakers that can easily be used to intimidate whistleblowers and stifle press freedom, many in Japan worry that the if the bill becomes law it will be only the first step towards even more severe erosions of freedom in the country.
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Even politicians inside the ruling bloc are saying, “It can’t be denied that another purpose is to muzzle the press, shut up whistleblowers, and ensure that the nuclear disaster at Fukushima ceases to be an embarrassment before the Olympics.”
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The new law would enact harsher punishment to leakers and ominously would allow journalists who obtained information by “inappropriate means” and whistleblowers to be jailed for up to ten years. The law would also allow the police to raid the offices of media organizations and seize evidence at their discretion.
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The bill has even grants no longer existent agencies the power to classify secrets.
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Despite the bill’s enlargement of the state’s power over information, it contains no oversight process to act as a check on ministries and government agencies designating large amounts of information as ‘secret’ for capricious or self-interested reasons.
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Masako Mori, the Minister of Justice, has declared that nuclear related information will most likely be a designated secret. For the Abe administration this would be fantastic way to deal with the issue of tons of radiated water leaking from the Fukushima Daichi Nuclear Power Plant since the triple meltdown in March of 2011.There seems to be no end to stopping the toxic waste leaks there but the new legislation would allow the administration to plug the information leakspermanently.
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Mizuho Fukushima, former leader of the Social Democratic Party, compared the bill to the pre-World War II Peace Maintenance Preservation Laws and other Secrecy laws at the time, remarking that there was a time in police-state Japan when the weather reports could be considered “secret.”
““Once you open the door to such kind of laws, the government will have the right to designate anything as a state secret and by speaking about it or mentioning it, you can be arrested and prosecuted.” Ms. Fukushima explained, “Especially during war time, it was very difficult for defendants and lawyers to fight their court cases, because they were not told what exactly what was the state secret that they had been accused of having revealed.”
Outspoken Upper House Councilor Taro Yamamoto, who is known to be a strong supporter of investigative journalism, minces no words: “The path that Japan is taking is the recreation of a fascist state. I strongly believe that this secrecy bill represents a planned coup d’état by a group of politicians and bureaucrats,” he warned.
While his statement may seem alarmist, even a senior official of the National Police Agency agrees. “I would say this is Abe’s attempt to make sure that his own shady issues aren’t brought to light, and a misuse of legislative power.
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The Japan Newspaper Publishers & Editors Association, the Civil Broadcasters Federation, and most major news organizations in Japan’s have expressed staunch opposition to the bill.
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Japan is about to take a giant step back into its oppressive past. When one also considers Prime Minister Abe’s stated ambition to restart Japan’s nuclear power plants and remove Article 9 from the constitution, the article which prevents Japan from waging war, it seems like the Empire of The Sun may be moving towards darker times.
Indeed, Ex-SKF notes that :
A citizen was forcibly removed from the balcony in the Diet where he was observing the debate of the State Secrecy Protection Law in the Lower House on November 26, 2013, as he shouted his opposition to the passage of the law. His mouth was stuffed with cloth so that he couldn’t shout any more while being removed by several guards against his will.
(From Tokyo Shinbun, 11/26/2013, via this tweet)
What’s even scarier to me than the man being forcibly removed by the guards is people sitting near him. They just sit there as if nothing is happening. They are not even looking; the one in the same row even looks away.
It’s not just Fukushima … and It’s not Just Japan
It’s not just Fukushima …
Governments have been covering up nuclear meltdowns for 50 years.
There has been a cover-up by the American government ever since the Fukushima earthquake. TheAmerican (and Canadian) authorities virtually stopped monitoring airborn radiation, and are not testing fish for radiation.
The U.S. government increased allowable radiation levels so that we could be exposed to radiation. Nuclear expert Arnie Gundersen says that high-level friends in the State Department told him that Hillary Clinton signed a pact with her counterpart in Japan agreeing that the U.S. will continue buying seafood from Japan, despite that food not being tested for radioactive materials.
The American government controls Japanese nuclear policy. And the Japanese would never have proposed such a draconian bill without U.S. backing. Indeed, the U.S. Charge d’Affairs Kurt Tong saidof the Japanese bill:
It’s a positive step that would make Japan a “more effective alliance partner.”
Earlier this year, the acting EPA director signed a revised version of the EPA’s Protective Action Guide for radiological incidents, which radically relaxed the safety guidelines agencies follow in the wake of a nuclear-reactor meltdown or other unexpected release of radiation. EPA whistleblowers called it “a public health policy only Dr. Strangelove could embrace.”
Whistleblowers at American nuclear facilities (like all other types of whistleblowers) have also beenmercilessly harassed.
It’s not just nuclear accidents … it’s everything.
The American government repeatedly covers up how bad things are, uses claims of national security to keep everything in the dark, and changes basic rules and definitions to allow the game to continue. Seethis, this, this and this.
When BP – through criminal negligence – blew out the Deepwater Horizon oil well, the governmenthelped cover it up (and here). As just one example, the government approved the massive use of ahighly-toxic dispersant to temporarily hide the oil.
The government also changed the testing standards for seafood to pretend that higher levels of toxic PAHs in our food was business-as-usual.
The government covers up the disgusting and unhealthy natureof much industrially-produced food.
The government’s response to the outbreak of mad cow disease was simple: it stopped testing for mad cow, and prevented cattle ranchers and meat processors from voluntarily testing their own cows (and see this and this)
The EPA just raised the allowable amount of a dangerous pesticide by 3,000% … pretending that it won’t have adverse health effects.
In response to new studies showing the substantial dangers of genetically modified foods, the government passed legislation more or less pushing it onto our plates.
The Centers for Disease Control – the lead agency tasked with addressing disease in America – covered up lead poisoning in children in the Washington, D.C. area.
The former head of the National Mine Health and Safety Academy says that the government whitewashed the severity of the Tennessee coal ash accident.
And after drug companies were busted for using fraudulent data for drug approval, the FDA allowed the potentially dangerous drugs to stay on the market.
Indeed, the cynical might say that the main function of government these days is to throw money at giant corporations and to cover up for them when their misdeeds are revealed.
And the American government is censoring reporters at least as much as Japan.
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Energy Crunch: Profits soar while temperatures fall
Energy Crunch: Profits soar while temperatures fall.
Three things you shouldn’t miss this week
- ‘Greenest government ever’ or ‘green crap’: which way will David Cameron jump? – A tug of war between the Treasury and the Prime Minister, andthe autumn statement will reveal which side is winning.
- As the Warsaw climate talks end, the hard work is just beginning – Delegates have been packed off and their homework is to prepare their country’s emission reduction plan by early 2015
- Methane emissions in US probably top estimates: study – US emissions of methane – a greenhouse gas – are probably 50 percent higher than current estimates show, according to a study published in the Proceedings of the National Academy of Science.
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U.S. Said Making Daily Flights Into China’s Air Zone – Bloomberg
U.S. Said Making Daily Flights Into China’s Air Zone – Bloomberg.
The U.S. military is conducting daily flights through China’s newly declared air-defense zone without notifying Beijing authorities in advance, a U.S. defense official said today.
The disclosure indicates that U.S. flight activity in the area, where China has unilaterally sought to exert control, is more extensive than was previously known. The Pentagon had acknowledged a flight by two unarmed B-52 bombers through the air zone earlier this week.
Fighter jets on the USS George Washington aircraft carrier on Oct. 24, 2013, in the South China Sea. Photographer: Martin Abbugao/AFP via Getty Images
Nov. 28 (Bloomberg) — Alastair Newton, senior political analyst at Nomura International Plc, talks about the territorial disputes between Japan and China. Vice President Joe Biden will press Chinese leaders on their intentions with a new air-defense zone, as Defense Secretary Chuck Hagel assured Japan of U.S. support and continued military operations in the region. Newton also discusses policies of President Barack Obama and Japanese Prime Minister Shinzo Abe. He speaks from Tokyo with Rishaad Salamat on Bloomberg Television’s “On the Move.” (Source: Bloomberg)
A woman walks near Chinese aircraft on display during a visit to a museum in Beijing on Nov. 29, 2013. Photographer: Wang Zhao/AFP via Getty Images
The defense official, who asked not to be named discussing military operations, wouldn’t specify the type of aircraft used in subsequent flights nor say whether any of them are armed.
“It’s very important the U.S. signal to the Chinese that we’re not going to be bullied and that we’re going to adhere to our commitments,” which include a defense treaty with Japan, saidNicholas Burns, a former U.S. undersecretary of state for political affairs from 2005 to 2008.
China for a second day today sent fighter planes into the air zone over an area that includes islands claimed by both China and Japan. The situation “certainly holds the real potential for a crisis,” said Dean Cheng, a senior research fellow at the Asian Studies Center of the Heritage Foundation in Washington.
China’s assertion and the subsequent flights have increased tensions which U.S. Vice President Joe Biden will seek to defuse when he visits Japan, China and South Korea next week. Biden will convey U.S. concerns about China’s air zone and seek clarification from Chinese leaders on their intentions, according to an administration official who briefed reporters on condition of anonymity because the talks will be private.
‘Provocative’ Behavior
China’s “provocative” behavior toward its neighbors in the region “now becomes a very prominent issue for the visit,” said Burns, who is now a professor of international relations at Harvard University’s Belfer Center for Science and International Affairs in Cambridge, Massachusetts.
Biden is “well-positioned to play a calming role hopefully to defuse this crisis, in a way that is supportive of our primary friend, the government of Japan,” Burns said in an interview.
China announced the air-defense identification zone effective Nov. 23 and said its military will take “defensive emergency measures” if aircraft enter the area without reporting flight plans or otherwise identifying themselves.
Japan, which denounced the move, told its airlines to stop providing flight plans to China. Japan and South Korea also have flown military aircraft through the air zone in recent days, testing China’s resolve to control a swath of the East China Sea that is central to a territorial dispute.
‘Destabilizing Attempt’
Japan and China both claim sovereignty over islands known as Diaoyu in Chinese and Senkaku in Japanese. The surrounding waters are rich in oil, natural gas and fish.
Defense Secretary Chuck Hagel has called China’s air zone “a destabilizing attempt to alter the status quo in the region” and warned that it “increases the risk of misunderstanding and miscalculations.”
Richard Haass, president of the Council on Foreign Relations in New York, wrote a Twitter posting warning of the “real chance” of a military incident involving China, Japan and others over the air zone. Haass, a former State Department official, said the “challenge will be to manage” the situation and avoid an escalation.
While the U.S. is probably responding correctly, the military flights pose the danger of a conflict, most likely by accident if warning shots are fired that could be misinterpreted, Cheng said in an interview.
‘Powder Keg’
“It is a multilateral powder keg,” he said. “You’re talking about something that will inevitably spill over to broader diplomatic relations and economic relations.”
The U.S. defense official said the Pentagon’s flights through China’s air zone are consistent with U.S. freedom-of-navigation policies that are applied to many areas of operation around the world.
Chinese planes were deployed in the zone off the country’s eastern coast and identified Japanese aircraft in the area, China’s Defense Ministry said in a statement on its website. Yesterday, Chinese planes entered the area on normal patrols, the official Xinhua News Agency said.
The Chinese Defense Ministry statement also said its planes identified U.S. aircraft, without specifying whether they entered the air-defense zone.
Japanese Flights
Japanese Prime Minister Shinzo Abe said today he would respond to China’s air zone in a “calm, assured manner.” Japan and the U.S. plan to step up air surveillance in the East China Sea, with Japan stationing E-2C airborne early-warning aircraft at the Naha base in the Okinawa region and expanding the use of unmanned Global Hawk aircraft, the Yomiuri newspaper reported today, without citing a source.
South Korea is considering expanding its own air-defense zone in response to China’s move, Wee Yong Sub, spokesman for the Defense Ministry said today in Seoul.
“This is one of the most serious challenges ever posed by China to freedom of movement both on the sea and in the sky and will affect very seriously the forward deployment of the United States,” Tomohiko Taniguchi, an adviser to Japan’s Abe, said in an interview with Bloomberg Television.
Japan’s major airlines, including ANA Holdings Inc. and Japan Airlines Co., have been flying through the zone without coordinating with China, all without incident.
U.S. airlines “are being advised to take all steps they consider necessary to operate safely in the East China Sea region,” State Department spokeswoman Jen Psaki said Nov. 27.
Hagel called Japanese Defense Minister Itsunori Onodera on Nov. 27 to assure the U.S. ally of support and its commitment to continued military operations in the region.
Hagel commended Japan “for exercising appropriate restraint” and he “pledged to consult closely with Japan on efforts to avoid unintended incidents,” according to a Pentagon statement.
To contact the reporter on this story: David Lerman in Washington at dlerman1@bloomberg.net
To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net
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Violent police crackdown in Kiev | World news | theguardian.com
Violent police crackdown in Kiev | World news | theguardian.com.
Link to video: Ukraine police’s violent crackdown at pro-EU protest
Riot police have launched a violent crackdown in the Ukrainian capital Kiev, using batons and stun grenades to expel hundreds of pro-Europeprotesters from the city’s main Independence Square early on Saturday, according to witnesses.
Police moved in on protesters who were still camped on the square following bigger demonstrations on Friday night against President Viktor Yanukovich’s decision not to sign a landmark agreement on trade with the European Union.
Witnesses said police first fired stun grenades at the crowds and then moved in, using batons to disperse them, chasing some protesters into nearby streets.
At 5am on Saturday part of the square was sealed off by black-helmeted riot police. Nine years earlier the square had been the scene of the Orange Revolution protests against misconduct and electoral fraud.
Tension had been building in Kiev since Friday when Yanukovich walked away from signing the pact with EU leaders at a summit in Lithuania, going back on a pledge to work toward integrating his ex-Soviet republic into the European mainstream.
He said the cost of upgrading the economy to meet EU standards was too great and added that economic dialogue with Russia, Ukraine‘s former Soviet master, would be revived.
On Friday night at least four people were beaten by police, including a Reuters cameraman and a Reuters photographer, who was bloodied from blows to the head by police.
The Interfax news agency reported that police had decided to clear Independence Square after “a number of incidents”.
In the Friday night demonstrations, which involved about 10,000 protesters, heavyweight boxing champion turned politician Vitaly Klitschko said Yanukovich had dashed the aspirations of Ukrainians to join mainstream Europe.
“Today they stole our dream, our dream of living in a normal country,” said Klitschko, a contender for the 2015 presidential election. “The failure to sign the agreement of association is treason.”
Olduvaiblog: Musings on the coming collapse 