The United States has long incorporated its highest intellect into government, especially in finance and national defense. What Japan must do now is focus solely on becoming a financial superpower—the one pillar it has lacked. By redirecting a portion of private assets into equities of superior domestic corporations, abolishing the opening price system, and maintaining strict short-selling regulations, Japan can immediately end the 25-year domination of its stock market by foreign capital. By channeling 100 trillion yen of idle bank funds into equities, Japan can instantly rise to match the United States as a financial superpower, nullifying even IMF pressure for tax hikes.

Japan Can Become a Financial Superpower Equal to the United States Immediately
2010-07-25

The United States is a country that incorporates its highest intellect directly into the government.
Especially in finance and national defense.
(I will discuss this next time.)

Once, the United States was the very model of a hegemonic state, possessing the three pillars of the world’s greatest financial power, industrial power, and technological power.
As already stated, as a hegemonic state it fostered poorer nations as they grew, and as a result—especially through Japan’s miraculous recovery—the decline seen in manufacturing industries was compensated by placing greater weight on becoming a financial superpower.

Now the United States is in great haste to make partial corrections to its status as an industrial and technological power, while also attempting to raise educational standards.

What we must do now is concentrate solely on the one point that was missing—becoming a financial superpower.

We must guide 10 percent of personal assets toward the acquisition of shares in the countless excellent companies that exist in every field in Japan—while the products created by these technologies and the technologies themselves still occupy large global market shares—before the technologies are lost or stolen through headhunting or other means—because the collective strength of these many companies is precisely the strength of the Japanese economy.

The method has already been described in the chapter written twenty-five years ago when the Turntable of Civilization came to Japan.
If short selling is said to be necessary, then it should simply be allowed under the current regulations applied only during continuous trading.
That is, prohibit short selling of 50 or more units, and require short sales to be placed at one yen above the current price.

If the present short-selling regulations are maintained as they are and the opening price system is abolished, the present situation—where positions are built through currency and futures trading and massive short selling is carried out at the next opening—will immediately be eliminated.
The current short-selling regulations are a sieve because there is absolutely no regulation at the morning and afternoon openings.
In this way we can immediately say farewell to the twentieth-century capitalism of greed and cunning that bears no real relation to true supply and demand.

In the first place, the very structure of a market in which gambling is conducted twice a day—through overnight risk and risk at the afternoon opening—is itself abnormal.
There is no need for hesitation or restraint.
We would merely be doing what should naturally have been done over the past sixty postwar years.

Let us assume that of the national wealth built up through the efforts of the people, as much as 500 trillion yen has already been skimmed off by foreign capital.
This coincidentally equals the more than 500 trillion yen in postal savings deposits, which the United States had long demanded through its annual reform requests to the LDP government.

Let us conclude that this was the interest paid—particularly to the United States—for making Japan great up to this point.
But from today onward, that is no longer the case.
The IMF is making absurd recommendations to Japan, such as raising the consumption tax to 15 percent from next year, as if Japan were a developing country.

As already stated, because there are no investment destinations, the banks have no choice but to channel 175 trillion yen into government bonds.
Of this money stagnating in the banks, we should immediately direct 100 trillion yen into the stock market.
There are quite a few major corporations paying dividends of over 3 percent annually.
In general, stocks with high dividends tend to have low volatility.
They are stable but boring, and thus often avoided by so-called individual investors.
Representative examples include NTT and domestic-demand–related stocks.

As already explained, merely abolishing the opening price system will cause the violent, unrestrained greed and cunning of twentieth-century capitalism to disappear for the most part.
If we guide just 1 percent of personal assets—10 trillion yen—into daily trading, the share of foreign capital will instantly fall into the teens, and they will no longer be able to act at will.
Domestic institutional investors will also be able to engage in daily trading with confidence.
This is because Japanese stocks will stabilize.

On top of that, from the bank funds mentioned above, we should guide 100 trillion yen into the stock market by exempting dividend income from taxation.
(This, however, should not be permitted for deficit-ridden banks or banks earning returns no higher than the dividend yield.)

As a result, the share of total issued stocks held by foreign capital will fall from the current roughly 45 percent to below 30 percent.
Thus, the foolish reality in which Japanese stocks have been trampled at will by foreign capital and have remained in decline for twenty-five years can be dispelled instantly.

What will happen as a result needs no explanation.
Japanese stocks, becoming the world’s most stable major market, will turn into a destination for risk-averse capital, and each time turmoil occurs, Japanese stocks will rise.
An ascent based on proper supply and demand—different from today’s yen appreciation—will begin.

If Japan finally accomplishes what it should have done over these twenty-five years as a super–economic power and a hegemonic state as previously described, the IMF will at last exclaim in astonishment that Japan has finally realized it, and demands regarding the consumption tax will never be raised again.

If foreign capital then demands that their dividends and trading profits also be made tax-free in the same manner, it will suffice to respond that only the portion consumed within Japan—of course, with receipts—will be exempt from taxation.

(274) John Lennon – Help Me to Help Myself – YouTube