from
(snip)"The loss by the Liberal Democrats would open the way for the Democratic Party of Japan, headed by Yukio Hatoyama, to oust Prime Minister Taro Aso and establish a new Cabinet, possibly within the next few weeks.
It would also smooth policy debates in parliament, which has been deadlocked since the Democrats and their allies took over the less powerful upper house in 2007.
"The ruling party has betrayed the people over the past four years, driving the economy to the edge of a cliff, building up more than 6 trillion yen ($64.1 billion) in public debt, wasting money, ruining our social security net and widening the gap between the rich and poor," the Democratic Party said in a statement as voting began Sunday.
"We will change Japan," it said.
The Democrats have also said they will make Tokyo's diplomacy less U.S.-centric. But Hatoyama, who holds a doctorate in engineering from Stanford University, insists he will not seek dramatic change in Japan's foreign policy, saying the U.S.-Japan alliance would "continue to be the cornerstone of Japanese diplomatic policy.""(snip)
(snip)"The Democrats are proposing toll-free highways, free high schools, income support for farmers, monthly allowances for job seekers in training, a higher minimum wage and tax cuts. The estimated bill comes to 16.8 trillion yen ($179 billion) if fully implemented starting in fiscal year 2013."(snip)
Like the Chinese, the Japanese have now reached the point where they have committed to spending hundreds of billions of their US trade surplus dollars to stimulate ( i.e. subsidize ) their own domestic economies. This in turn will result in far fewer billions of trade surplus US dollars finding their way to future US Treasury Bond / Bill auctions. This is very likely to mean a further weakening of the US dollar's international exchange rate ( thus higher US dollar denominated pricing for all international commodities from energy to food to raw materials ), and a significant rise in US interest rates.
more economic centered 'professsional' commentary ... from
(snip)RCM Comment: I am loath to bore you with the same story over and over but the story’s far reaching ramifications demand that we cover this story like the wet blanket it represents. You see, there is a fire raging in the U.S.. Our government is burning paper (US$s) at an alarming clip as it spends aggressively to avoid the inevitable. Let’s not debate the simple fact that government spending plans have never in history helped drag an economy out of a recession. Even the oft-praised New Deal of the ’30s didn’t save the country from the depression; WWII accomplished that feat.
So, paper is burning and the only way to get more paper, short of ‘cooking the books’, is to issue Gov’t debt and hope our trading partners continue to fund our addiction. Enter the wet blanket. The cry to dethrone the US$ as the reserve currency is building and now Japan in an ‘et tu Brute’ moment adds its voice to the majority….
July 13 (Bloomberg) — Japan’s opposition party, leading in polls ahead of next month’s election, said the nation should consider shifting its $1 trillion of foreign reserves away from the dollar and buying International Monetary Fund bonds. “In the medium to long term, we need to do what we can to avoid the risk of currency losses or economic turbulence that could result if the dollar were to swing,” Masaharu Nakagawa, the shadow finance minister in the Democratic Party of Japan, said in an interview in Tokyo on July 9. “Many countries are starting to diversify their reserves.” (snip)
However, there is a HUGE difference between Japanese Democrats and American democrats who both advocate greatly increased government spending. The Japanese can actually afford to make these expenditures via diverting the reinvestment of their US trade surplus dollars. The US obviously cannot afford increased gov't spending, and will now have a much more difficult and expensive time attempting to borrow additional moneys from foreign sources for this purpose !
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