JPY Drops, Nikkei Pops On Japan's Worst Trade Deficit On Record

Japan’s trade surplus was one of the pillars which had supported Japan’s debt-fuelled economy. It was replaced by trade deficit.

I have pointed out the fallacy of the Asian countries’ mercantilist export model, given the fragile nature of the global trade regime.

We are in a crisis in slow motion and part of an experimental economy. So is Japan.

From Zero Hedge:

.You have to laugh really... We presume the rally in Japanese stocks and weakness in the JPY reflects an assumption that this dismal miss for both imports and exports - leaving Japan's adjusted trade deficit the worst in Bloomberg's 20 year history - means moar Abenomics. Of course, the headlines will be all about Abe's 'any minute now' comments or Kuroda's 'just one more quarter' hope (as he speaks later today) but the reality is that things are not getting better in the radioactive nation as this marks the 30th consecutive trade deficit... but, like Venezuela, when has that even been reason not to buy stocks... S&P futures are up 2.5 points (below Friday's highs still for now), gold has given back its earlier gains and is unchanged, and Treasury Futures are down a tick.

For the 30th consecutive month, Japan ran a trade deficit and this time it was the biggest ever as imports rose 16.5% YoY (missing the 19.9% YoY expectations by the most in 15 months) and exports rose 11.5% (missing the 15.6% YoY expectations by the most in 14 months)...

http://www.zerohedge.com/news/2013-10-20/jpy-drops-nikkei-pops-japans-worst-trade-deficit-record

"When you give a lunch or a dinner, do not invite only your friends or your relatives or your wealthy neighbors, so that they may invite you back. You will then have your reward. Rather, when you hold a banquet, invite the poor, the crippled, the lame, the blind; you will be blessed indeed because of their inability to repay you. For your goodness will be rewarded at the resurrection of the righteous."
Luke 14:12-14

Creating and Maintaining a Democratic Society for the Broader Social Interest through Rechnology innovation

One of the major themes I have stressed on this blog is the role of innovation in a society. It should be aligned with the purpose (framework) of a nation.

Technology innovation in line with the productive capacity should be the force that allows the wealth of a nation to develop and grow. It should be used as a means of creating jobs and raising the median income. By doing so, it lifts a nation’s economy and expands the middle class. In this way, innovation could be a means of wealth creation in the interest of the most people. Innovation should be nurtured in such a way that it spreads growth around. This would lead to a more democratic society.

Otherwise, it could be used as a means of implementation for the political expediency. It could also be used as a means of concentrating power and wealth at a few hands. That would hamper the political democracy. Therein lie the flaws of the Korean economic growth model and innovation model.

The solid middle class base is the crux of a healthy democratic society. It is important because a large class of people have to provide the checks and balances to make the democracy work, sustain the real economy and pursue innovation. This is the core of the social democratic process.

In this context, technology innovation, middle class expansion, economic growth, and social democratic process should go hand in hand.

We should create and maintain a democratic society for the broader social interest through tech innovation

(A detailed analysis on this topic won’t be shared due to the proprietary nature of the content.)

Can Korea Sevelopmental Atate Nurture Entrepreneurial Ventures To Create Jobs At Home?

Those who have read my blog would understand why Korea has pursued export-led, chaebol-centered economy and how they have succeeded in it in the global context. I have also pointed out how the Korean model was flawed from the start. As noted, the top 10 Korean conglomerates account for 80% of the Korea’s GDP but employ less than 6% of the workforce.


Korea’s skewed industrial structure has had special consequences and risks. Among them, unemployment is high, especially among college graduates. The investments in productive capacity by the Korean firms are increasingly being made overseas because that’s more profitable for them.

Korean chaebols couldn’t exist without Korea developmental state which was initiated by the current president Park Guenhye’s late father, the president Park Chunghee in the early days of industrialization.

Can Korea developmental state nurture entrepreneurial ventures which will create good jobs for the younger generations at home in a similar way? Korea’s policy is to reward companies for generating and keeping good jobs in Korea. Institutional setup is needed in this context.

How does the current Park administration promote technology innovation in conjunction with the productive capacity in such a way that it serves the broader social interest? I hope they are well aware of the shortcomings of the Korean economic growth model and innovation model, which I have discussed several times on this blog. Has Korea achieved a sufficient degree of productivity and innovation capacity to sustain its economy?

(A detailed analysis on this topic won’t be shared due to the proprietary nature of the content.)

"The best and most beautiful things in life cannot be seen or even touched; they must be felt with the heart." Helen Keller