Sunday, April 21, 2013

The best neighbors in Tokyo


Good morning from sunny but chilly Tokyo, living a never-endingly eventful Travelife.

It's all sunshine outside but still pretty cold, so I'm very happy I decided to bring my winter parka as the windchill factor today is the game changer as far as temperatures are concerned.

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But the general atmosphere in the city is nevertheless warm and happy as many people here feel optimistic once more after a very long time.

FINALLY, SOME ACTION.

The main reason for the lightheartedness is the perceived pickup in the Japanese economy as a result of better overall policies of the current Japanese Prime Minister Abe and his team, and the rise of the Nikkei over the last few months.



Since I was here last, which was in early March, the Nikkei has risen steadily enough to have lots of people in the financial industry sitting on easy gains of 10% or so.

And even if the gains are on paper, the pyschological impact is significant enough to make many people happy and carefree enough to loosen their wallets.

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I'M HAPPY TO HAVE DECISIVE NEIGHBORS LIKE THESE

Prime Minister Abe lives in my neighborhood in Tokyo, and his current Finance Minister, Taro Aso, who was once also Prime Minister of Japan, literally lives two houses down from me.

So I'm very happy and proud to say that my neighbors in Tokyo are responsible for finally jumpstarting the Japanese economy and putting optimism back in a nation's psyche after 20 long years.

The recovery of Japan is literally the talk of the town, particularly among the financial community here.

FINALLY, SOMEONE'S DOING IT.



The other night at dinner, someone said: "They're literally going to print money until there's enough liquidity to really revive the stockmarket and the economy."

If you've studied economics, you know that in the long run, there's lots of implications for printing money just like that.

But in the short run, it's really a no brainer. The Japanese economy needed a push so badly for so long, that I can't for the life of me imagine why the previous administrations never did this in the volumes needed by Japan.



A NO BRAINER

I said: "Printing money is such a no brainer. Even I could've told them that's what they should have done. Why on earth didn't the previous governments ever do it enough?"

Everyone at dinner agreed that this was the 20 million yen question. The previous governments had printed money, but only in half-hearted spurts.

Someone said: "The previous governments should really be held responsible for the financial mess of Japan. And especially the two previous governors of the Bank of Japan."

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BRAVO, MR. KURODA.

The current Bank of Japan governor is none other than former ADB President Kuroda from Manila. and so far he is doing a fantastic and decisive job of pumping much-needed liquidity into the market.

The stock market is certainly showing its appreciation, too.

NO STRATEGY AT ALL. UNTIL NOW.



Another person said: "The problem with the previous governments is that they were so afraid of printing more money because they were always worried about the exit strategy if they began to print more money."

Then he added: "What they didn't realize is that by not printing money, they had neither exit strategy nor entry strategy nor any kind of strategy. Everyone was waiting for some form of decisiveness, and this just never came. Now, with Abe, Aso and Kuroda in the picture, it's finally come."

SOME OTHER SIMPLE THINGS 
THIS GOVERNMENT MIGHT DO. 

There are a couple of other pretty simple things the Japanese government might do, to continue this still fragile economic recovery.

Japan needs population growth badly, and that alone will help continue the growth over the long-term.


I think they should offer free maternity hospitalization costs under the National Health Insurance plan from 2014 to 2016, abolish capital gains taxes on stock trades for the foreseeable future, and abolish taxes on real estate transactions -- or at least on real estate purchases.

Then, watch the Japanese economy really zoom. IMHO.

Good morning again from Japan, waiting 20 long years for the bubble economy to reappear, and living a never-endingly eventful Travelife in the meantime.

Oh yes, and looking forward to a fantastic teppanyaki dinner tonight.




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