The following is from a regular column by Hideo Tamura that appeared in The following is from Hideo Tamura’s regular column in the Sankei Shimbun on August 22, titled “Ignoring the Nature of Deflation as the Culprit.
Is Japan’s impoverishment a “fate”?
While most reporters and pundits talk about what the Ministry of Finance tells them, Tamura is a rare genuine economic commentator.
He is a rare and genuine economic commentator and a must-read for the Japanese people and people worldwide.
“It is a characteristic of Japanese people that they do not pursue the essence of things. It is a characteristic of the Japanese people that they do not seek the heart of a problem, and when a problem arises, they do not thoroughly inquire into the nature of the problem. It is because it disturbs harmony.”
(From the contribution of mathematician Masahiko Fujiwara to the morning edition of this newspaper on the 15th, “Humiliation blessed with vaccines”)
*At best, this could be the reason why the media and so-called scholars have not pursued the true nature of the Wuhan virus, but the truth is, as I have mentioned many times, there is no doubt that they are under Chinese manipulation. The state of newspapers such as Asahi, opposition parties such as the Constitutional Democratic Party, and T.V. media such as NHK proves the correctness of my editorial.*
I am a specialist in economics, but my argument has also hit home.　
Deflation has been the leading cause of Japan’s economic atrophy for over a quarter-century.
At the end of 2012, the previous government of Shinzo Abe realized the gravity of the situation and announced a plan to “end deflation.” Still, the surrounding voices pushed him to raise the consumption tax, inviting deflationary pressure. The Yoshihide Suga administration followed suit. 
Is it because of a lack of awareness that the administration keeps repeating the same mistakes and refuses to change them? 
Or is it the fate of Japan to be unable to resist the tide of globalism?　
Let’s take a look at the graph.
Using the end of 2012, when Abenomics began, the graph shows the changes in the gross domestic product (GDP) of Japan, the U.S., and China, Japan’s foreign assets, and China’s foreign liabilities at a dollar pace.
In addition, changes in the Bank of Japan’s fund issuance and foreign debt to Japan are shown in yen terms.
The figures for overseas debt to Japan are the flow of Japanese yen funds in yen units from the perspective of the overseas sector in the Bank of Japan’s Flow of Funds Statistics.　
What is still blindingly obvious is that Japan’s GDP is still shrinking in dollar terms and shows no sign of resurfacing.　
On the other hand, Japan has an abundance of money.
The Bank of Japan (BOJ), which is implementing the first arrow of Abenomics, the policy of a different dimension monetary easing, has issued 522 trillion yen, equivalent to one year’s GDP, from the end of December 2012 to the end of March this year, as indicated by the broken line of the old BOJ fund issuance, and poured it into the financial markets.
Since money has no color, it is impossible to say where the BOJ’s funds ultimately went, but it is clear that almost the entire amount of the increase has flowed overseas.
Foreign debt to Japan has increased by 501 trillion yen during this period.　
For the money, “overseas” can be described as the international financial market based on the dollar, and the headquarters of this market is Wall Street in New York.
Japan’s money lowers the dollar interest rate on U.S. Treasury bonds, etc., and at the same time makes the U.S. stock market more active, stimulating consumer spending and corporate capital investment in the U.S. and promoting economic growth in the U.S.
But that’s not all. It can immediately transform money into capital that generates interest and income without leaving the country.
The vast investment funds and central banks in New York are redistributing the money they have gathered to Hong Kong and Shanghai, where expected high yields and asset appreciation.
China achieves high GDP growth, issuing yuan funds in response to the influx of dollar funds to expand domestic finance for production.　
Domestic demand for goods shrinks due to deflation. Japan supplies money that is not used domestically to the U.S. financial market, while Japanese companies seek the goods market from China and invest in China with cutting-edge technology. , Trying to survive in global competition.
This Japanese model of money and goods builds on deflation in Japan and reduces per capita income. In other words, it makes people poorer.　
The graph’s scale and trend of the increase in Japan’s foreign assets and China’s foreign liabilities are the same since 2016.
It’s too good to be a coincidence, but Japan’s money surplus makes up for China’s deficit.　
In summary, the world of economic globalization is dominated by the United States in finance and China in terms of goods, and deflationary Japan is inevitably an integral part of this.
It will lead to the view that this is Japan’s destiny, whether intended or not.
Or it may stir up the imagination of an “international conspiracy,” such as an arrangement by U.S. international finance capital in collaboration with the Chinese Communist Party.
However, my argument is not based on any of these.　
In the style of Mr. Fujiwara, whom I introduced verbatim, Japan’s decline is prolonged by the common inertia of the elite in various fields who refuse to face up to the mismanagement that Japan has brought upon itself and to pursue to the bitter end what the nature of the failure is.　
For example, Mr. Abe was cautious about raising the consumption tax rate from 5% to 8% in April 2014 and spent the previous summer canvassing the opinions of outside experts and the business community.
However, the majority chorused that the tax should be raised as planned. The overwhelming majority of the media also supported the tax hike.
Then, the BOJ’s governor, Haruhiko Kuroda, who Mr. Abe trusts, told the prime minister that there was a “tail risk” in which Japanese government bonds would plummet if not raised as planned, and at that time, there would be no way for the BOJ to take action.
The truth is that the consumption tax hike amid chronic deflation will forcibly raise prices, resulting in a strong push down on weak demand, and an increase in deflationary pressure remains neglected, even though government statistics squeeze it.
Japan’s deflation is accelerating due to the new coronavirus, while China’s continues to grow.