About that Deflation!
Despite overwhelming fears of deflation in Japan by economists, by the Bank of Japan, and by prime minister Shinzō Abe, all of the preceding forgot to get the opinion of consumers.
Here’s the real deal on alleged deflation: An increasing number of Japanese elderly are repeat shoplifters, trying to get caught, hoping to be rewarded with a two year prison sentence because they cannot get by on government pensions.
Life of Crime
Please consider Japan’s Elderly Turn to Life of Crime to Ease Cost of Living.
Japan’s prison system is being driven to budgetary crisis by demographics, a welfare shortfall and a new, pernicious breed of villain: the recidivist retiree. And the silver-haired crooks, say academics, are desperate to be behind bars.
Crime figures show that about 35 per cent of shoplifting offences are committed by people over 60. Within that age bracket, 40 per cent of repeat offenders have committed the same crime more than six times.
There is good reason, concludes a report, to suspect that the shoplifting crime wave in particular represents an attempt by those convicted to end up in prison — an institution that offers free food, accommodation and healthcare.
The mathematics of recidivism are gloomily compelling for the would-be convict. Even with a frugal diet and dirt-cheap accommodation, a single Japanese retiree with minimal savings has living costs more than 25 per cent higher than the meagre basic state pension of Y780,000 ($6,900) a year, according to a study on the economics of elderly crime by Michael Newman of Tokyo-based research house Custom Products Research.
Even the theft of a Y200 sandwich can earn a two-year prison sentence, say academics, at an Y8.4m cost to the state.
The geriatric crime wave is accelerating, and analysts note that the Japanese prison system — newly expanded and at about 70 per cent occupancy — is being prepared for decades of increases. Between 1991 and 2013, the latest year for which the Ministry of Justice publishes figures, the number of elderly inmates in jail for repeating the same offence six times has climbed 460 per cent.
Akio Doteuchi, a senior researcher on social development at the NLI Research Institute in Tokyo, expects the ratio of repeat offenders to continue rising.
“The social situation in Japan has forced the elderly into the need to commit crime,” he says. “The ratio of people who receive public assistance is highest since the end of the war. About 40 per cent of the elderly live alone. It’s a vicious circle. They leave prison, they don’t have money or family so they turn immediately to crime.”
Japanese Retail Spending Plunges
Given that fixed-income pensioners cannot afford the rising cost of living on their pensions (some real pronounced deflation would help), it should be no surprise to discover Japanese Retail Sales Fall the Most Since 2014 Tax Hike.
Japanese retail sales posted their biggest monthly contraction in February since April 2014, when the government infamously raised the sales tax for the first time 17 years.
Data this morning showed retail sales fell 2.3 per cent month-on-month in last month, down from a revised -0.4 per cent (previously -1.1 per cent) in January, and more than double economists’ expectations for a 0.9 per cent drop.
It was the biggest month-on-month fall since April 2014, when the government decided to increase the national sales tax 3 percentage points to 8 per cent. That was the first tax increase since 1997 and led to a 13.4 per cent month-on-month slump in retail sales.
Color Commentary
Never Admit Failure
ZeroHedge provided this chart and commentary in his post Japanese Retail Sales Plunge Most Since 2010.
ZeroHedge noted this was the “4th monthly decline in a row and absent the tsunami and tax-hike reaction, the worst drop since Dec 2010.”
He then asked, “At what point do you just admit failure?”
That I can answer: Never admit failure, especially when CNBC comes to the rescue with headlines like this: Japan Feb consumer spending bounces back, outlook uncertain.
A quick check of my calendar shows CNBC is a bit early for that report. April Fool’s day is four days from now.
Meanwhile, it seems Japanese consumers would welcome a bit more of that deflation all the Keynesian and Monetarist economists are worried about.
Mike “Mish” Shedlock
I have thought of the exact same thing. I am in my 60’s. I have told my kids that I think about selling out EVERYTHING when I begin to get sick, “get rid of the money” and then walk into a bank and politely rob it.
They will no doubt put me in a minimum security Fed prison (there is one in Miami) since I will not use a gun in the fake robbery, and thus the Government can feed me and take care of m e.
I will have, of course, a TV, health care, food, A/C and visitation rights.
Why not?
I know someone quite well (you could say) that did just that. His circumstance was different, he was young and had no reserves to fall back on, and found himself being targeted by authority without reason. So he hit back at the same time as finding a way out, was not caught and did not use an arm or violence. Unless you are willing to change your view of the world it is probably not worth it though. As said, he was not caught ( which is maybe the difference) , may never have been identified, but instead realized that any attempt at stability in his life might be interupted by being arrested at some point. Now where you are older and prepared to be arrested I could not say – you are supposed to be mature enough to make wise decisions etc. ( or act senile when needed – you are just acting aren’t you?) . I am not surprised some older folk have lost their respect for the system though, short of justifying robbery it is a real world out there of cause and effect, and one that is very unbalanced and crooked as far as people are concerned – when meaningfulness of society degenerates then there is not much to help hold a person above retaliation or pure self interest, the sort he finds he has been repeatedly subject to at his cost.
A few hundred adults have been stealing for years and gone unnoticed. i believe it may have begun by stealing from the Social Security fund and expanded from there they could easily be rounded up during the next joint session of congress.
Think of all the problems that would solve in one sift move 😉
1) This “system” does NOT deserve respect
2) There is no robbery. It is fake.
Unless there is a trigger happy guard or customer, I’ll be sitting in a chair, over by the free coffee, waiting for the police, at which time I put up NO resistance, decline an attorney, acknowledge my Miranda Rights, and then proceed to admit to the “attempted robbery”, etc.
You missed the point of my comment.
I think it costs about $35,000 to “house” somebody in jail. They could always send me the $3,000 a month and I can live elsewhere, but they won’t.
Think they would lock you away just for wanting to go to jail… no wait, you’ll be punished by being denied jail… no wait, other people… Etc.
They won’t take you seriously unless there is a threat, and at that point you end up with someone being a hero.
So I guess you’d just get labelled as nuts, not good enough for jail, just a tranquilizer perscription.
That would probably really piss you off and you would end up in jail.
I guess the Japanese have it sussed by just shoplifting.
They won’t give you $3000 because you don’t represent society, they represent society and building new jails and paying for their maintenance is good for GDP / friends/ political agenda. You get what you and everyone else paid for.
And no, the current system does not deserve respect, at least not the kind we are taught . There is a saying that goes something like ‘ believe a lie and you become a liar too’.
Maybe this was factored into Krugman’s Abenomics plan. Encourage all the non-productive seniors to commit crimes with the intention of going to prison to stimulate the prison industrial complex that has been so successful in America. Think of all the new prison jobs it would create. Ingenious!
Makes sense that retail sales are falling, when the “five-finger” discount (stealing) is growing and the out-of-prison population is declining. I wonder if elderly prisoners have their pensions as “savings” when they get out of prison, or whether pension payments are stopped while people are imprisoned?
With 70% capacity utilization, the prisons in Japan have a long way to go to get filled up. Maybe they should just call that excess 30% capacity “Old Age Hotels” and price each prison cell at a luxury hotel rack rate per night to boost GDP. If necessary, they could also multiply everything by a coefficient (a number determined by reverse engineering from the desired GDP number). Then PM Abe can declare victory over the economy, and end NIRP, ZIRP, QE, etc.
Pingback: TOP NEWS: Week 03/28 – 04/03 - etftrack.com
I believe Kurt Vonegut wrote a dystopian short story where people intentionally committed petty crimes to end up in jail.
How times change. I guess Western morals hit Japan. At one time the oldest son took care of the parents. My first wife was Japanese/Korean and her brother did indeed take care of his elderly parents. Thus the reason in China they were tossing girls on the one child policy.
Sometimes it looks like the new older generation have (I don’t like to generalize but my grandparents for example worked humbly for what they had or could provide, my parents made sacrifices but did not dedicate themselves to family to the traditional extent) served themselves lavishly before others. You reap what you sow… or sometimes the next generation do instead.
Western culture seems to work quite hard at disassociating family given the oportunity… the price of progress or equality or what have you. Would not be so bad if the younger generation were finding true independence instead of being committed into support a false model.
The concept of children supporting elderly parents is an agrarian society concept where families of many generations live together or in close proximity. In industrial societies, we glorify the individual willingness to abandon family and move far away to follow the ever changing job landscape. Family relationships easily whither, and the abandoned parents live precarious lives once they can no longer compete in the labor market.
On the plus side, people are able to consume more.
Good desription. My parents would be par/startt of that new breed, and they are caught in it because they encouraged their kids to do the same and cannot cite tradition as a pull towards a closer family – quite the opposite, they pretty much fled. I suppose that is hard justice but as with all families it is part of their adventure and where there are true ties they are not undone but only tested. In our case the challenge is to keep everyone in a position to be able to share some family life together at least. I know others who just disappear for years, have their fill and then return to more familiar territory… which they often find is no longer familiar. I don’t think there is a specific answer to all of this, its up to people to make the effort if they can do.
The wave of Japanese who are becoming elderly about now, had no children. Always the land of the Rising Sun, they beat even the Euros by about two decades in the self imposed extinction game.
The US elderly have nothing saved, either; once young people wake up and have the sense to realize they have exactly zero obligation to keep making payments on debt incurred before they were even born. And even less obligation to pay ever rising taxes to prop up a “system” which either already is, or is soon to be, less justifiable and functional than the one the Somalis put in place in the 90s.
All in a vain effort to save “the banking system”, which is nothing whatsoever more than code word for saving those who benefited from the theft and graft over the past 4 decades, from recognizing that the value a house provides, equals exactly to a percent, the value of a roof over ones head. And that the only justifiable, efficient and non-needlessly-intrusive means for raising government revenue, is taxation of real estate ownership.
A lot of people are gunning for the exact opposite (10% inflation, as in the 70’s)
http://www.telegraph.co.uk/business/2016/03/27/can-anything-stop-japan-from-falling-into-the-abyss/
They are missing a few points:
1. Were this to happen, the debt would not be eroded, but the debt would be unserviceable and the meaning of money would be endangered (and with it, all social relations).
2. The reason investors are OK with negative interest rates, is that as long as investors can front run central bank bond buying, their total return is positive. That is why all this quantatative easing precipitates deflation and not inflation: trading debt remains profitable, until we fall into the monetary black hole. We are swirling around the drain.
3. Economics are affected by non-economic factors: Old people are not being cared for by their family, families are not being formed, and Japan is missing millions of babies and young people. The central bank and the government cannot affect such factors.
4. The difference between the costs of prison and the cost of a basic pension is completely out of whack, and that is illustrative of how out of whack a lot of cost structures in society have become: very little goes to securing basic commodities, all the costs are in other things, like renting some space in which to exist.
You’re correct,
ZIRP/NIRP/QE are disinflationary … deflationary when asset busts arrive.
Why, hello …
Instead of negative interest rates and government borrowing to build roads to nowhere, the government should borrow and increase pension payments. Fewer elderly needing to steal, increased economic demand, increased incentive for businesses to invest.
You’re kicking the can a bit further by increasing already gargantuan debt overhang,
Then what?
Keep Kickin’. The CB can pay the debt forever, whatever amount is necessary. The only other option is to reduce the standard of living of the population to match that of China’s. And that shouldn’t be what capitalism is about.
What can I do to get sent to Yankton and take your classes?
From: MishTalk To: rlbrown652012@yahoo.com Sent: Monday, March 28, 2016 10:33 PM Subject: [New post] Japanese Elderly Commit Crimes Purposely, Just to Get into Prison! Retail Spending Plunges; About that Deflation! #yiv9560750022 a:hover {color:red;}#yiv9560750022 a {text-decoration:none;color:#0088cc;}#yiv9560750022 a.yiv9560750022primaryactionlink:link, #yiv9560750022 a.yiv9560750022primaryactionlink:visited {background-color:#2585B2;color:#fff;}#yiv9560750022 a.yiv9560750022primaryactionlink:hover, #yiv9560750022 a.yiv9560750022primaryactionlink:active {background-color:#11729E;color:#fff;}#yiv9560750022 WordPress.com | mishgea posted: “About that Deflation!Despite overwhelming fears of deflation in Japan by economists, by the Bank of Japan, and by prime minister Shinzō Abe, all of the preceding forgot to get the opinion of consumers.Here’s the real deal on alleged deflation: An ” | |
Chicago Teachers Union Investigated in Scalia’s Death
http://www.cnn.com/2016/03/29/politics/scotus-4-4-decision-hands-public-sector-unions-a-victory/index.html
Not sure what this post has to do with deflation in Japan.
Latest CPI for Japan (february) has inflation +0.3% year over year.
Nothing says nascent social creditors like this story.
It’s a complete confirmation of Social Credit’s thesis and Wisdom in a general sense actually…..and of Wisdomics/Gracenomics’ integration of Austrian and Social Credit economic policies with the deflationary retail discount. The deflationary discount policy is not standard Social Credit policy by the way, but rather my Wisdomics/Gracenomics philosophical expansion/extension of it based on the proactive (fore thinking) aspect of Grace.
A prudent man foreseeth the evil, and hideth/prepareth himself; but the simple pass on, and are punished. Proverbs 27:12
Pingback: Connecting the rise of Donald Trump with global resource depletion – Ecologise