First is was the Americans. Then it was the Russians. Then it was the EU. Now Zero Hedge reports that the Japanese are moving forward with their own “fiscal firehose” in the form of a massive, record-breaking 117 trillion yen stimulus package.
The record stimulus of 117 trillion yen, which as Reuters reported, will be funded partly by a second extra budget, followed another 117 trillion yen package rolled out last month. The new package takes Japan’s total spending to combat the virus fallout to 234 trillion yen ($2.18 trillion), or about 40% of gross domestic product, and will send its already world-record debt load into the stratosphere.
The combined spending ranks among the world’s largest fiscal packages to deal with the coronavirus, approaching the size of the United States’ $2.3 trillion aid programme.
According to the Ministry of Finance, the latest package includes 33 trillion yen in direct spending, and the balance will consists of guarantees and backstops. The new package will include measures such as higher medical spending, aid to firms struggling to pay rent and more subsidies to companies hit by slumping sales.
“We must protect business and employment by any means in the face of the tough road ahead,” Abe told a meeting of ruling party lawmakers. “We must also take all necessary measures to prepare for another wave of epidemic.”
To fund the costs, Japan will issue an additional 31.9 trillion yen in government bonds under the second supplementary budget for the current fiscal year ending in March 2021.
That record double-stimulus will push new JGB issuance this fiscal year to a record 90 trillion yen. Inclusive of issuance to roll over debt maturing during the year, Japan’s total calendar-base annual market issuance would hit a record 212 trillion yen, further straining already tattered finances. (source)
The fact that practically all major nations of the world are doing this with no other options is a historically amazing an unprecedented game of “chicken” on the railroad tracks to watch. The entire idea here seems to be about maintaining an equilibrium in the financial systems so that by intense coordination with numbers and accounting games and gimmicks, those businesses that should financially collapse will stay afloat. It is when this equilibrium is broken that likely will cause the entire house of cards to collapse, and at this point such in inevitable. The question is keeping the system afloat as long as it is possible until it is time to allow this to happen. This was the same reason behind the money printings of 2007 in TARP, except now the concept of TARP had to be reenvisioned for the current paradigm.
Don’t get comfortable. This is not well. The world is plunging into financial chaos, and economic chaos leads inevitably to political chaos as it always happens throughout history. When this happens, it will be used as a major catalyst to start a global war.
You need to get ready now. Stop looking at politics, and start looking at your yard as a garden, at paying off your bills, and at preparing for a time when scarcity will be normal and instability the new paradigm of life. Most peopla are affected by the shock of change than from actual change itself, and so please, for the sake of all that one must do, please prepare now so that you are not caught unprepared in the future.
Let Japan worry about her yen, and the Federal Reserve Bank about the dollar. You need to care for your needs because you will not be able to rely on anybody else to do this in the years to come.