Basic Relationships of Financial Factors
People start to think about economy when they receive salary, buy goods, and pay tax.
But, inflation is a little imaginary.
If income increases, everybody is happy, and tax revenues increase as a result.
If sales of goods increase, everybody is happy, and tax revenues increase as a result.
But, inflation has a potential to destroy the total economic regime. And, the central banks in the world have no effective means or panaceas which can suppress any type of inflation. Accordingly, the Japanese Ministry of Finance and the Bank of Japan are afraid of inflation, so that they would not make full efforts to increase sales of goods and salaries workers receive.
It is said that the Roman Empire also suffered inflation the Empire could not conquer. But, in Japan in the samurai era, that is, before modernization, the Tokugawa samurai regime (called "bakufu") could once address inflation.
This inflation was triggered in the late 17th century when the bakufu expanded the budget scale and lowered a rate of gold/silver content in coins. But, in the early 18th century, the bakufu started to pursue a fiscal austerity and improved a rate of gold/silver content in coins. Then, the inflation came to dwindle down. The Tokugawa bakufu succeeded in containing inflation. It was before Japan opened the nation to the world to start Westernization and modernization.
So, the key to fighting inflation is order and discipline as well as keeping value of money. In Japan, the former is, in general or as a matter of fact, committed to the Ministry of Finance and the latter to the Bank of Japan. Order and discipline of public officials is not so difficult to understand. But what does it mean to keep and protect value of the yen?
Japan is in 20-year long deflation caused by a large scale of use of cheap Chinese labor force by Japanese enterprises. To relax the deflation, the Bank of Japan should boldly supply money to the society. On the other hand, deflation has led to insufficient tax revenues for the Government. To prevent financial deficits, the Government has had to issue a huge amount of bonds to date. Now, it plans to even increase a rate of consumption tax. But, it is not desirable to put more burdens on consumers and taxpayers in the period of deflation and in the aftermath of the 3/11 Great Disaster of Tsunami. To solve this problem, the Bank of Japan should boldly purchase Government bonds. Yet, the Bank of Japan is afraid of triggering inflation and an increase of interest rate, since there is a huge amount of outstanding government bonds.
Nonetheless, if the Bank of Japan can find a new economic theory that assures them that their bold supply of the yen to the market and the society would not bring about inflation, they will help Japan with their function to provide money for the government.
So, the issue is finding a new economic theory. Japan is given a big chance to establish a new economic theory.
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Now, it is December, finally, of 2011.
This year is really crazy. Or finally the God, maybe, started to judge the peoples in the world. Indeed, nobody dreamed that the great tsunami attacked Japan to trigger the nuclear disaster. Nobody could foresee that Osama bin Laden would be taken on. None expected the wide spread of the Wall Street movement. Even the impact of the Greece financial fiasco is more than estimated. Egypt and Libya lost dictators, and the Syrian regime is now being abandoned by the international community. It has been really a difficult year. And it seems that all is due to unbelief of mankind.
Yet, I think, for example, Afghanistan has hope, since some Afghans donated some money to Japan in the wake of the 3/11 Disaster as expression of their compassion to tsunami victims.
Not ironically, mankind as a whole should share judgment of the God; conversely, mercy one man receives should be shared by all. Hence, it looks as though only one man should be in a state of righteousness to be recognized by the God as such. Or one man suffices. Otherwise, it is only desperate.
Rom 11:29 For the gifts and calling of God are without repentance.
Rom 11:30 For as ye in times past have not believed God, yet have now obtained mercy through their unbelief:
Rom 11:31 Even so have these also now not believed, that through your mercy they also may obtain mercy.
Rom 11:32 For God hath concluded them all in unbelief, that he might have mercy upon all.