Saturday, July 1, 2017

Japan proved printing money can be a great idea. Here's why

Japan proved printing money can be a great idea. Here's why

A Japanese flag flutters atop the Bank of Japan building in Tokyo, Japan, September 21, 2016.  REUTERS/Toru Hanai - RTSOPF5
“Abenomics.” That's the shorthand for Prime Minister Shinzo Abe's three-pronged plan.
Image: REUTERS/Toru Hanai
“Everybody knows” that you can't get rich from just printing money, except for the part where sometimes you can.
Take Japan. Its unemployment rate has fallen to a 22-year low of 2.8 percent — yes, you read that right — due in large part to all the yen it has created the past four years. Money might not grow on trees, but it can get spit out of a central bank's computer.
Let's back up a minute. How did Japan get to the point where it needed to give itself the economic equivalent of a defibrillator? Well, back in the early 1990s, it was the first country to go through the boom, bust and stagnation cycle that the United States, Europe and most of the rest of the world have gotten to know and hate so well.
Japan managed to avoid a full-fledged depression thanks to all of its infrastructure spending, but it couldn't escape a “lost decade" — a fancy way of saying that while it did grow, it didn't grow much. As economist Brad DeLongpoints out, Japan didn't just stop catching up with the United States for a few years, but for the last 25. This is both better and worse than it sounds. Better, because once you adjust for the fact that Japan's working-age population has been shrinking, it has grown at least as fast as we have in per-capita terms over the past 15 years. But worse because even then it never made up any of the ground it lost. It had become permanently poorer.
This wasn't supposed to happen anymore. Economists, as Nobel Prize-winner Robert Lucas put it in 2003, thought that the “central problem of depression prevention” had been “solved.” They had supposedly learned enough from the 1930s to keep the economy from entering another doom loop of debt, deflation, and default. Until, that is, Japan showed that they hadn't. It had a problem that had not existed for 60 years: It couldn't keep its prices from falling even with zero interest rates.
Now, I know this sounds like the kind of thing only an economist could believe — how could lower prices be a bad thing? — but think about it like this: Falling prices would mean falling wages, but not falling debts, so they would become harder to pay back. In the best case, the economy would get stuck in a cycle of low consumer spending leading to low business investment leading to low hiring, and then even lower consumer spending. And in the worst, everyone would go bankrupt. That's why Japan has put so much emphasis on getting its inflation rate back above zero. It wants to get into the opposite cycle of higher prices leading to higher wages leading to lower debt burdens leading to more consumer spending and then more business investment. In other words, a self-sustaining recovery.
That has been the whole point of “Abenomics.” That's the shorthand for Prime Minister Shinzo Abe's three-pronged plan — fiscal stimulus, monetary stimulus, and structural reforms like getting more women into the workforce — to get Japan's economy back to where it should be. And while there have been stops and starts, and debates and doubts, the reality is that it is working, emphasis on those last three letters.
Which is to say that while Japan might not be where it wants to, it is getting there. Maybe the best way to tell isn't its super-low unemployment rate, but rather its super-high employment rate. That, as you can see below, has shot up since the start of Abenomics to an all-time high of 83.5 percent, making our own 78.3 percent rate look downright measly in comparison. And it means that Japan's unemployment rate hasn't fallen for the bad reason that people have given up looking for work, but for the good one that almost everyone who isn't drawing a pension has found one. It's what unfinished progress looks like.
Image: Statistics Bureau of Japan
What's behind this boom? It can't be the fiscal or structural parts of Abenomics, because they've barely been tried. Indeed, Tokyo's budgets have actually had more austerity than stimulus the past few years, and its attempts to shake up the country's sclerotic norms and institutions, while making a little headway, have run into quite a bit of resistance from entrenched interests. No, it's the monetary part — Japan's promise to print money for as long as it takes prices to start rising again — that has done the most.
But it's still not everything they wanted. Inflation, after all, has only recently crept above zero and is still well below their 2 percent target. The oil crash and an ill-timed sales tax increase kept it in negative territory for a long time. More important than that, though, is the fact that this hasn't made Japan's central bank give up. It has before. Up until Abenomics, you see, Japan would do just enough to avert the worst, and nothing more. It was one half-measure after another, none of which added up to a whole.
What they needed, a then-Princeton professor named Ben Bernanke told them, was the “Rooseveltian resolve” to keep trying things until one of them worked. And now they're listening. All their money-printing seems to have given businesses the confidence — and the cheaper currency — they needed to expand a little more. That's because what had been holding companies back, until a few years ago, was that the government had been doing less than everything it could to support the economy. So now Tokyo is saying it will do whatever it takes, and unemployment has finally fallen so far that businesses should have to start fighting over people by offering bigger raises — potentially giving the economy the push it needed to get into a virtuous circle.
And all it would have taken was printing a few trillion yen, which actually isn't that high a price to pay.
   

10 things you can learn in 10 minutes that will change your life

10 things you can learn in 10 minutes that will change your life

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laptop headphonesVFS Digital Design/Flickr
You're probably short on time reading this, and I don't blame you. Life moves fast. It seems impossible to keep up with hundreds of tasks being thrown your way every day, especially at the office.
In fact, more than two-thirds of employees reported being overloaded at work, according to Cornerstone's 2014 State of Workplace Productivity Report. And 84% think the overload won't be letting up anytime soon — it's increasing.
In light of this reality, you're probably searching for the best productivity hacks the internet has to offer, but you don't have a lot of time to apply them.
So here's a solution: Learn one of these 10 things in the next 10 minutes, and you'll be more productive for the rest of your life.
The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

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1. The Pomodoro Technique

Time management is huge for productivity. I've found the Pomodoro technique to be one of the most effective ones. It requires you to design your daily tasks in 25-minute intervals, forcing you to be extremely focused. — Syed BalkhiOptinMonster
Thomson Reuters

2. How to improve your average

Take five minutes to look up Dr. Stan Beecham's philosophy on elite minds, and then take the remaining five minutes to commit to improving your average. We tend to focus all our time on improving our peak performance while improving our average performance can have a much more dramatic impact on overall progress. — Douglas HutchingsPicasolar

3. How to plan ahead

I learned this recently from the Stagen Leadership Academy. Weekly planning and setting appointments with myself for the following week (and then keeping those appointments) ensures I give my priorities the appropriate amount of attention. It's so easy to get distracted by what everybody else needs. This methodology ensures I stay on target with my own projects. — Corey BlakeRound Table Companies
Adrees Latif/Reuters

4. How to meditate

In 10 short minutes you could easily learn a meditation practice that you can take with you the rest of your life. Meditation helps calm your mind, ease stress, and bring clarity to your everyday life. My productivity increases whenever I meditate consistently and noticeably declines when I fall out of my routine. Watch a YouTube video or read a quick blog post on how to meditate. It's easy. — Andrew ThomasSkyBell Video Doorbell

5. Memorization techniques

If you think of your brain as a set of computer folders, then you can see that forgetting is not really possible. If you forget something, it's either it wasn't saved to begin with or you put it somewhere hard to retrieve. Concentration and recall are what makes memories. Focus in order to concentrate, and test yourself in order to recall. "Backspace" new info by using a pencil and eraser. — Cody McLainSupportNinja

6. How to triple your reading speed

I read at least one book per week while driving, and I have a really short commute. How? Audiobook apps (like Audible's) often have a feature where you can listen to a book at three times the normal speed. It only takes about 10 minutes for your brain to adjust, and then you're good. — Jesse LearV.I.P. Waste Services, LLC
Carsten Koall/Stringer/Getty Images

7. How to take responsibility

Too often people try to come up with reasons why they can't get something done, why a project is over budget, how an accident happened, etc. Learning to take responsibility for your actions will make doing business much smoother. It's easier to solve a problem when you aren't spending a ton of time getting to the root of it. Take responsibility and move forward. — Drew GurleyRedbird Advisors
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8. How to organize critical versus important tasks

Piling things on your to-do lists feels productive. Eventually, though, the list gets too massive and all the tasks suffer, since you don't have enough time and energy to allocate to each. While you can delegate, it's easier to divide the mix of critical tasks (tasks that you need to do now to improve the business) and important tasks (tasks that you can do whenever to improve the business.) — Kenny NguyenBig Fish Presentations

9. Shoulder, wrist, and arm stretches

Putting in long hours typing at your desk is bound to lead to health problems if you don't learn easy, quick stretches to counteract the strain. Simple exercises to prevent carpal-tunnel syndrome and back pain take less than 10 minutes to learn, but save you hundreds of hours you might have lost otherwise. Just five to 10 minutes a day is a good start to protecting your health and productivity. — Dave NevogtHubstaff.com

10. How to delegate time blocks

It is so easy to fall into the daily distractions, forcing you to play catch-up the next day. Time blocking is such a huge part of my day that keeps me on track. I schedule a time frame where I am responding to emails, and then I block the next hour for meetings. I would recommend everyone break time into segments. — Jayna CookeEVENTup
Read the original article on Inc. Copyright 2015. Follow Inc. on Twitter.
Read the original article on Inc.. Copyright 2016. Follow Inc. on Twitter.

Russia is a serious threat to the US, according to a new Pentagon report

Russia is a serious threat to the US, according to a new Pentagon report

Russia military schoolA Pentagon report warns of a rising military threat from Russia.REUTERS/Eduard Korniyenko
A Pentagon report released Wednesday warns of a rising military threat from Russia and says the Kremlin believes the United States is seeking regime change, an assertion that could color the already fraught relationship between the two powers.
The Defense Intelligence Agency’s 116-page  report , "Russia Military Power: Building a Military to Support Great Power Aspirations," sketches a picture of a Russia that sees itself in opposition to the United States and with a leadership that harbors a strong desire to make the country again the prominent power it was during the Cold War era.
"The Kremlin is convinced the United States is laying the groundwork for regime change in Russia," the report says. Moscow started worrying about Washington’s hand in regime change during the so-called Color Revolutions in Eastern Europe in the early 2000s. Russia also sees the United States as responsible for the Arab Spring revolutions of 2010 and 2011, and the ousting of former Ukrainian President Viktor Yanukovych in 2014.
The report comes at a time when the US government is torn on how to handle the rising threat from Russia. While President Donald Trump has sung the praises of Russian President Vladimir Putin, and while he is reportedly  preparing concessions  to make to Moscow before his first meeting with Putin, Congress has chosen a different and much tougher tack.
The Senate recently passed legislation that would slap new sanctions on the Kremlin and make it harder for the White House to roll back sanctions on its own.
russia military gamesRussian jets fly in formation during the International Army Games 2016, in Dubrovichi outside Ryazan, Russia, August 5, 2016.REUTERS/Maxim Shemetov
The intelligence community, judging by the report, sees less optimism for improved relations. "Moscow worries that US attempts to dictate a set of acceptable international norms threatens the foundations of Kremlin power by giving license for foreign meddling in Russia’s internal affairs," the report says.
The idea that Russia anticipates the United States will attempt to topple the Kremlin’s leadership tinges diplomatic relations between the two countries with suspicion.
Russia has long been wary of US involvement in regime change. Putin ran for president in 2012 in part because he was unhappy that then-President Dmitry Medvedev   teamed  up with the United States to effect regime change in Libya. Putin also blamed then-Secretary of State Hillary Clinton for instigating widespread protests in late 2011.
Similarly, Russia has alleged that the United States orchestrated the protests in Kiev in late 2013 that ultimately ousted the pro-Kremlin Yanukovych, who allegedly  asked  Russia to intervene in Crimea.
The Defense Intelligence Agency also notes a staggering increase in Russian defense spending that has reached a "post-Soviet record."
Though the 2016 defense budget was set to decline, a late bump brought the total amount to $61 billion, according to the report. That’s more than double the annual defense budget of $27 billion for 2006, though still just one-tenth of US defense spending.
russia military paradeThe White House has a strange affinity for Moscow. Reuters
It remains unclear whether House Republican leadership will endorse the Senate-backed sanctions amendment, and the White House has already attempted to water it down.
Plenty of European governments have reacted furiously to the Senate move, which would unilaterally broaden economic sanctions on Moscow and could affect European companies doing business with Russia.
Despite the White House’s strange affinity for Moscow, US government institutions continue to take Russia seriously, belatedly giving credence to former presidential candidate Mitt Romney’s much-maligned claim that Russia is America’s main geopolitical threat.
Speaking to the Senate Intelligence Committee on Wednesday, Nicholas Burns, a former US ambassador to NATO and a former State Department official in the George W. Bush administration,  said the Obama and Trump administrations failed to appropriately respond to Russia’s meddling in the US presidential election.
"President Trump has taken no action whatsoever, and that’s irresponsible," Burns said. He added that President Barack Obama should have retaliated more "vigorously."
"Russia is our most dangerous adversary in the world today," Burns said.
Read the original article on Foreign Policy. "Real World. Real Time." Follow Foreign Policy on Facebook. Subscribe to Foreign Policy here. Copyright 2017. Follow Foreign Policy on Twitter.

Tencent wanted to buy WhatsApp, but Mark Zuckerberg swooped in and stole the $19 billion deal while its CEO was having back surgery

Tencent wanted to buy WhatsApp, but Mark Zuckerberg swooped in and stole the $19 billion deal while its CEO was having back surgery

Mark Zuckerberg on phoneFacebook
Facebook shocked the world when it purchased WhatsApp for a jaw-dropped $19 billion in 2014.
WhatsApp was a fledgling rocketship with millions of users around the globe, and it was being courted by other tech companiesas a possible takeover target at the time.
One of those suitors was Chinese software giant Tencent, the maker of WeChat.
In a recent interview with Bloomberg Businessweek, Tencent CEO Ma Huateng revealed that his company was close to finalizing an acquisition of WhatsApp when he had back surgery. Because of his personal level of involvement in the deal, his surgery delayed the talks just long enough for Facebook's Mark Zuckerberg to swoop in:
"In early 2014, Tencent was interested in buying the messaging service WhatsApp. An acquisition would have shocked the world and given Tencent immediate global reach. But as they neared the final stages of an agreement, Ma, who took an interest in the deal, had to undergo back surgery, which delayed a visit to Silicon Valley to negotiate with founder Jan Koum. Mark Zuckerberg then swooped in and acquired WhatsApp for $19 billion, more than twice what Tencent had considered paying."
The rest, as they say, is history.

Trump wants to start a trade war with the biggest countries in the world

Trump wants to start a trade war with the biggest countries in the world

donald trumpPresident Donald Trump at the White House. Chip Somodevilla/Getty Images
President Donald Trump is reportedly considering a move that would most likely ignite a major international trade conflict with some of the biggest economies in the world.
According to Jonathan Swan and Mike Allen of the news website Axios, Trump and top administration officials discussed imposing tariffs on major exporters of steel and other goods during a meeting Thursday at the White House.
The tax on imported goods could be about 20%, according to Axios, and may be expanded to goods like paper, semiconductors, aluminum, and large household appliances.
While the intent is to penalize China, a goal of Trump’s dating back to the campaign, officials informed Trump that the tariff would most likely affect other major allies of the US including Canada, Germany, Japan, Mexico, and the UK.
The plan is backed by what Axios described as the "America First" wing of the White House including chief strategist Steve Bannon, Commerce Secretary Wilbur Ross, trade adviser Peter Navarro, and senior policy adviser Stephen Miller.
During the meeting, according to Axios, Trump was told by "over 75%" of the people in attendance that the tariffs were a bad idea but remained in support of the idea because it would excite his die-hard supporters.
Most economists agree that tariffs of the type Trump is considering would set off a major trade war and have devastating economic consequences. There is also a good chance that the move would result in a US recession.

Russia and China Continue to Stockpile Gold to Unload the US Dollar

Russia and China Continue to Stockpile Gold to Unload the US Dollar

sputniknews.com 
JUN 9, 2017


Russia and China have been stock piling gold for years to have enough reserves to out do the U.S. The global financial markets will see a major devaluation of the American currency. "In the long-run, it cannot be guaranteed that the dollar will remain a global reserve currency" 

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