This article explains why the author questioned U.S. Treasury Secretary Lew’s statement, focusing on currency policy, hedge fund dynamics, and the structural vulnerabilities of Japan’s market.

2016-05-04

I wrote that I felt something suspicious about the recent announcement by Jacob Lew, the U.S. Secretary of the Treasury, for the following reasons.

First and foremost, he outrageously listed Japan together with South Korea and China, both of which are indisputable currency-manipulating countries.

South Korea and China are countries that feel neither pain nor discomfort even if they are pointed out by the United States; such criticism means nothing to them.

In other words, pointing fingers at South Korea and China is meaningless.

Another reason was my sense that it is likely the Chinese government that is investing large sums of money into U.S. hedge funds.

The Shanghai market is a market where short selling cannot be executed even if one wishes to do so.

It is doubtful whether it can even be called a true market that forms the foundation of capitalist society.

The Korean market is extremely small, and as I have written before, South Korea’s Ministry of Finance considers the market to be its own backyard.

As for the inclusion of Germany as another country, I sensed a camouflage directed at Japan—an insidious intention anticipating that Japan’s foolish media, which have long preached “learn from Germany,” would be satisfied if Germany’s name were included.

As I have already mentioned, I spent several years watching the markets as a final confirmation for writing The Civilization Turntable, and during that time I also wrote about a British fund manager investing in Japan who said that Japan’s market is a market where absolute profits can be made—meaning that simply pushing the yen higher through currency futures and short selling Nikkei futures would yield enormous profits without fail.

It is a market where short selling can be done endlessly, and even though it may be said to be too small for a market of a country where the Civilization Turntable is turning, it is still the world’s largest market outside the New York Stock Exchange.

An article that made me 100 percent certain that my sense of suspicion was correct appears on page 44 of this month’s issue of the monthly magazine SAPIO.

That will be discussed in the next chapter.