Keep An Eye On Europe & Japan

Little Sign Of Europe's Depression Lifting

For several months European officials have been basking in the calm of the financial markets. They have fallen over themselves to declare the crisis over.
And then the news from the real economies intrudes. In the last quarter the European economies shrank at their fastest since 2009. In Italy, now in the final days of an election campaign, industrial output fell 6.7% last year.
Europe, at this time, would merit the attentions of the US Depression-era author John Steinbeck.
It is worth reading an article by Kostas Tsapogas, the former foreign editor of the Greek paper Eleftherotypia.
"We are fighting," he says, "to keep our dignity intact and avoid the depression that is enveloping the country."
He describes Athens shrouded in wood smoke as people strip the forests, unable to afford heating fuel.
"We are luckier," he writes, "than the people who are forced to live in their cars."
They apparently park at a different spot every few days hoping some stranger will offer them the use of a shower or a toilet. 

 My view:

Economic depressions are creatures that are exceedingly difficult to fight and win.

Thanks to Keynesian economics, fiat currencies, and fractional reserve banking systems, the global team of central bankers and politicians have spent their way into a fiscal corner.

Once they realize their error, that their presumptions about how the economy functions are incorrect, we can expect a move to constitutional changes to promote a much more authoritarian state "for the common good".

The first country that will move this direction is likely Japan.

As Jesse points out in a recent blog post here.

Considering the demographics of Japan - it is the oldest nation on earth - this is not that surprising.

The Japanese have funded their state sponsored projects by running deficits and consuming most of the populations savings in the form of government bonds.

The problem is, with a debt to GDP of over 240%, the Japanese are running out of savings very rapidly.

Who will buy 10 year Japanese bonds at under 1% yield?

Soon, the answer will be - no one.

That is why the leader of the ruling Liberal Democratic party is proposing to amend the constitution to delete Article 97.

eliminating free speech protection for activities "with the purpose of damaging the public interest or public order, or associating with others for such purposes"; and reducing parliamentary majorities required for constitutional amendments.
Given that the pensions promised to Japanese citizens will soon be underfunded, it is no wonder that this is developing.

The only way to maintain the status quo will be through police and military force.

Europe has demographics that are not far behind Japan's.

We can expect to see similar constitutional changes there.

The negative population growth propaganda promoted in public education and by the Club of Rome is bearing fruit.

The fruit is not one that is good for food or freedom.

But only for oppression.