Princes of the Yen: Central Bank Truth Documentary


This is a film about
the power of central banks. Central Banks have
the power to create economic, political and
social change. This is how they do it… Pearl Harbor – 7th December 1941 A film based on a book
by Professor Richard Werner Long live the imperial army. Princes of the Yen Central Banks and
the Transformation of the Economy I pledge allegiance to the flag of the
United States of America. The atom bomb. The American Occupation LOUDSPEAKER: We will arrive at
Yokohama at 09:30 hours, debarkation priority will be
in accordance with the debarkation schedule. General Douglas MacArthur arrived
at Atsugi Naval Aerodrome, near Yokohama, on August 30, 1945. As he emerged from his aircraft, he paused at the top of the steps, stuck one hand in his hip pockets, tightened his jaws around
his corncob pipe, and surveyed the conquered lands. This pose was repeated several times
from different angles, so that all the press photographers
could get a decent shot. Democracy was to be instilled
in the Japanese people, as though
they had never heard of it. NEWS: Our problem’s in the brain
inside of the Japanese head. These brains like our brains
can do good things, or bad things, all depending on the kind of
ideas that are put inside. Kabuki plays featuring loyal samurai were banned or heavily censored, as were books and films about the
bombings of Hiroshima and Nagasaki. Satirical cartoons of MacArthur and mention of occupation censorship
were strictly forbidden. WAR CRIMES TRIBUNAL: The commission
finds you guilty as charged and sentences you
to death by hanging. NEWS: Yamashita thanked the commission
for the fairness of his trial. Prime Minister at the time of
the war in the Pacific, General Tojo, remarked during his trial, “none of those Japanese, would dare
act against the Emperor’s will.” The cross-examination
was immediately cut short, and a week later
Tojo dutifully stated that the Emperor had always loved
and wanted peace. NEWS: General Hideki Tojo, who assumed official responsibility
for the conduct of the war and did everything possible
to exonerate his emperor. MacArthur would later remark
to the U.S Senate, that in terms of modern civilization the Japanese were like
a 12-year-old boy. You are interested in the unknown, the mysterious, the unexplainable, that is why you are here. When the war was over bank’s loan books had deteriorated. The assets the banks held
were mainly war bonds and loans to destroyed industries. As such the whole banking sector
was virtually bankrupt. This problem was easily solved by
the Bank of Japan. All it had to do, was buy the banking sector’s
bad papers with newly created reserves, giving them good money for assets,
which were often worthless. The first two post war
central bank governors were nominated by the US occupation. Eikichi Araki was appointed
the first post-war governor of the Bank of Japan. But soon after taking up this post, he was indicted by
war crimes prosecutors and had to resign. Then in 1951, after a general amnesty on suspected
war criminals filling public offices, he was made ambassador to
the United States. On returning from his post
as ambassador in 1954, Araki was again made governor
of the central bank. After the 1951 amnesty
for war criminals, much of the Japanese
wartime bureaucracy was returned
to their wartime positions. This included wartime politicians and most home ministry bureaucrats who had been in charge
of the thought police, a number of whom
moved to the education ministry. US ARMY: Japan is the key
to the fate of the Far-East, once again for the second time
in the march of modern history, those words have urgent reality. In order to avert
the kind of rural unrest that was helping the communists
in China, the Americans initiated
the redistribution of land from big landowners to their tenants. The capitalist elite in Japan, known as the Zaibatsu, were purged as supporters of
a criminal war and prohibited from
further business activity. The fascist policies of the 30s that the reform fascist bureaucrats
could not implement during the war, the US occupation
managed to complete, like the land reform
and the zaibatsu policy. Yes it’s a very funny encounter of Japanese wartime fascists
and American new dealers. The Post-Occupation Politics NEWS: The Diet, home of Japan’s
Senate and House of Representatives. NEWS: In Japan,
fanatic students and leftist groups rioted for days on end seeking to block the mutual
defense treaty with America. The socialist deputies
staged a riot in the diet itself. The police in restoring order, also evicted the socialists. NEWS: The speaker was carried to
the platform and called to order the session that approved the treaty. In 1957, the former Class A war crimes
suspect, Kishi Nobusuke, became prime minister of Japan. He had been General Tojo’s
minister of commerce and industry during the war, where his responsibilities
had ranged from munitions to slave labor. While Hitlers’ war economy minister was in Berlin Spandau prison, Albert Speer, his Japanese wartime colleague
was prime minister of the country. Although Kishi became a defender
of democracy after the war, before and during the war, he had described himself
as a national socialist. With money from crime syndicates, industrial corporations and CIA slush funds, Kishi built
the Liberal Democratic Party into a powerful political machine. In Japan, many of the most important post-war
economic and political leaders came from an elite group
of wartime bureaucrats, the very same people who had pushed Japan into the war. The Liberal Democratic Party stayed in power for almost 40 years. NEWS: Welcome home in Japanese
to these American soldiers. After a tour of duty in Korea they are returning to
their base in Japan, where once a short time before they were stationed as
occupation troops. And how do they return? How are they received by the
people whose land they occupy? Not as overlords, not as antagonists, not as men who are distrusted
and feared and resented, but as friends. The War Economy System In Tokyo’s Central Chiyoda Ward, the Ministry of Finance
had its headquarters. From here, the ministry controlled most aspects
of economic life in Japan. The Ministry of Finance was
the most powerful ministry and the Bank of Japan had
to report to the Ministry of Finance. Ministry of Finance officials elicited deep and hushed
exclamations of awe and respect and former ministry bureaucrats obtained influential posts as heads
of public and private institutions. But in one area the ministry did not have
actual control, and that was the quantity of
credit creation and its allocation, which was decided by
the Japanese Central Bank: the Bank of Japan. They told the Ministry of Finance and the public and the journalists; “we run monetary policy
through interest rates.” And they let the Ministry of Finance
reign in their interest rate policies, but the rule was done through,
not interest rates, which is the price of money, it was done through
the quantity of money. Window Guidance: A process by which a
central bank imposes credit growth and allocation quotas
on commercial banks. It worked this way,
it’s called window guidance. The Bank of Japan just told the banks how much they will have to
lend in the coming quarter and who, which sector
of the economy to lend to. it’s credit allocation,
credit control. The Bank of Japan gave quarterly
instructions to individual banks, on the value of loans and which industrial sectors
they should be allocated to. All loans were broken down
in sectors and sub-sectors, and large-scale borrowers
had to be listed by name. The Bank of Japan could decide which projects should be encouraged and which should be discouraged, by dictating to whom and for what
banks could issue loans. This was the war economy system adapted to the production of
consumer goods. NEWS: The 95 million people of Japan now enjoy a national income
second only to the United States and the more prosperous nations
of Western Europe. It’s not a good system for
capitalists, But for the population
it created a lot of wealth, very even income and
wealth distribution, very high growth, and very rapidly raised quality
of life and standards of living. In 1959 alone, the economy expanded by 17%. But a result of the
war economy system was that entire industrial sectors would compete not for profit, but for market share. Companies would fight
until bankruptcy to gain market share. This phenomenon was soon recognized and called “excess competition”. The solution was the creation of
explicit or implicit cartels. In the banking sector, window guidance acted as the
cartel control mechanism, because the Bank of Japan
could dictate the number and value of loans
that banks issued. As a result bank rankings never
changed during the post war era, except after mergers. According to one banker, “if it were not for window guidance, we would compete until hara-kiri.” The War Economy and
International Trade NEWS: The US current account deficit surges to its highest level
in 9 years. The size of the increase took
many economists by surprise. While cartels controlled
competition within Japan, there were no such limits when
it came to international markets. Japanese corporations
soon became dominant in many markets in the world. In America, formal congressional
hearings were held under the title “Japanese productivity–lessons
for America.” Leading economic theories indicate that only free markets
can lead to success. But Japan rose within decades to become the second
largest economy in the world without relying only on the
“invisible hand” of free markets. Japan’s postwar economy was a fully mobilized war economy, with production shifted from weapons to consumer goods. “It is better for the Bank of Japan
not to attract attention and remain as quiet as
the forest of a rural shrine.” (Hisato Ichimada,
18th Governor of the Bank of Japan) Since the Bank of Japan presented
itself as a champion of free markets, window guidance was an embarrassment. Official publications either
failed to mention it or downplayed its role by calling the credit controls
“voluntary”. Whenever the Ministry of Finance
would enquire about the Bank of Japan’s credit
creation and allocation policy, Bank of Japan staff would engage in complex discussions full of technical jargon to make the process appear
impenetrable to non-experts. In November 1965, the first batch of Japanese government
bonds came onto the market. From now on, when politicians
wanted to spend more, they would no longer put
pressure on the Bank of Japan, but instead exert it on
the Ministry of Finance. So the ministry
would ultimately preside over an ever-increasing
national debt mountain. Central Bankers call for reform The 1980s was an era of
financial deregulation in the industrialized world. Most industrialized countries lifted their restrictions on the
movement of capital. In Japan, Tadashi Sasaki, a former governor
of the Bank of Japan called for a five-year plan for the transformation and
liberalization of the Japanese economy. Then, in 1986, the “Advisory Group on
Economic Restructuring” headed by the former Bank of Japan
governor, Haruo Maekawa, proposed a ten year
economic reform plan designed to make the
living standards of Japanese more comparable to those
enjoyed in the West. The proposal stated that: “the time has now come for Japan to make
a historical transformation in its traditional policies on
economic management and the nation’s lifestyle. There can be no further
development for Japan without this transformation.” The report read like a wish list by
US trade negotiators. It started with calls for
administrative reform and the abolition of
bureaucratic powers. The goal was the transformation of the entire body politic, the abolition of the
war economy system, and the introduction of a
US style free-market economy. Those members of the advisory group who uttered dissent, were relieved of their duties. Reports in the press
were highly critical. Observers recognized
the radical nature of the plan. It seemed far too ambitious. It was calling for a wholesale revolution of all parts of the Japanese economic,
political, and social system. Although the report was clear
about what was wanted, it was embarrassingly silent about how these goals
would be achieved. The only clue hidden
in the report was, “in the implementation
of these recommendations, fiscal and monetary policy have a significant part to play.” The Bank of Japan has always been on the record that this Japanese system should be scrapped, and US style capitalism
should be introduced. Whether you agree with that or
not is an entirely separate question. Now the next question is, how do you do that? The Ministry of Finance
has been legally in control for most of the post-war era. We have entrenched
bureaucratic structures, politicians, and all these cartels
and so on. That was the old system. Well history teaches a system
only changes fundamentally if there is a crisis. The commission proposed that monetary policy should be
used to promote a historic crisis, sufficiently large to overcome
the vested interests of the Ministry of Finance, politicians
and corporate Japan. Every system has groups that benefit from it and hence have no desire
to change it. There is probably no country
in the world that has changed its economic,
social, and political system in a significant way
without a crisis. It is the crisis that convinces citizens and
interest groups of the need for change. How can you achieve this? Well you need a crisis, and the best way to create it,
is to have a bubble, because that is how nobody stops you. How to create a Bubble The Bank of Japan began to significantly increase
window guidance loan quotas. Average yearly loan growth quotas were close to 15% in the late 1980’s. One city banker would later remark: “during the bubble, we wanted
a certain amount of loan increases, but the Bank of Japan
wanted us to use more. Young people in their 20s and 30s on modest salaries were able to buy second and third homes. The credit boom caused not only a boom
in real estate, but also in the stock market. Between 1985 and 1989, stocks rose 240% and land prices 245%. By the end of the 80’s, the value of the garden surrounding
the Imperial Palace in central Tokyo was worth as much as
the entire state of California. Although Japan is only 1/26th
of the size of the United States, its land was valued at four times
of that of the United States. The market value of a single
one of Tokyo’s 23 districts, the Central Chiyoda Ward, exceeded the value
of the whole of Canada. Economists, who are trained to believe
in market outcomes, tried to justify
the high land prices. Some thought land scarcity
was the reason. Shiny new corporate headquarters rose in Tokyo’s posh
business districts. The labor market boomed so much that there was a genuine fear
of a serious labor shortage. Companies started to invite
final year university students on expensive trips to holiday resorts to entice them to sign up. The politicians loved it, the Ministry of Finance loved it, tax revenues were going up. The companies loved it. Every day was like a festival, we girls were taken out, and everything was always paid for
by guys and bosses. No-one used public transport
to get home, we always got a taxi. With asset and stock prices
rising inexorably, even traditional manufacturers
could not resist the temptation to try their hand
at playing the markets. Soon they expanded their
finance and treasury divisions to handle the speculation themselves. These company hedge funds, known as Zai Tech, used borrowed money to engage
in property and share speculation. The frenzy reached such proportions that many leading manufacturers, such as the carmaker Nissan, made more money through
speculative investments than through manufacturing cars. Literally thousands
of articles were written on the new Japanese miracle economy. A common explanation by economists was that high and rising productivity explained the impressive performance
of Japan’s economy. Books on Japanese
management techniques became international bestsellers. Western businessmen read 17th-century tracts
on samurai strategies. In reality, Japan’s stellar performance
in the 1980s had little to do with
management techniques. Instead of being used
to limit and direct credit, window guidance was used
to create a giant bubble. I conducted research interviewing
Bank of Japan officers and bankers, both sides, on tape. The result was, the Bank of Japan did continue
its informal guidance, in fact it was
the Bank of Japan that forced the banks to
increase their lending so much. The Bank of Japan knew that the only way for banks
to fulfill their loan quotas was for them to expand
non-productive lending. In the words of one Banker: “if there is no demand for credit
from low-risk borrowers and we want
to use up the quota, the risk gets worse.” Another banker is quoted as
saying that “a side effect of the window
guidance rule of loan increases was that banks increased lending even when there was no loan demand.” Money Creation and the Bubble Like all bubbles, the Japanese bubble was simply fuelled by the
rapid creation of new money by the banking system. Between 1986 and 1989, Toshihiko Fukui was the head of
the Banking Department at the Bank of Japan, this was the department that was
responsible for the window guidance quotas. When Fukui was asked by a journalist, “borrowing is expanding fast, don’t you have any intention of
closing the tap on bank loans?” he replied, “because the consistent policy of
monetary easing continues, quantity control of bank loans
would imply a self-contradiction. Therefore we do not intend to
implement quantitative tightening. With structural adjustment
of the economy going on for quite a long period, the international imbalances
are being addressed. The monetary policy supports this, thus we have the responsibility to
continue the monetary easing policy as long as possible. Therefore it is natural
for bank loans to expand.” Why were the banks lending so much? Because they were forced to do so by the orders of the Bank of Japan. Normally, banks choose clients from among
a large number of loan applicants, turning down
a significant percentage. But from 1987 onwards, the tables had turned. It was the bankers who were aggressively pursuing
potential customers. Anecdotes abound about how banks were soliciting
loans at bargain interest rates, pursuing clients like street peddlers. The banks were encouraging
people to borrow money. For example when a newly wed couple
wanted to buy a house, banks would offer them double the amount they asked for. Bankers made increasingly
exaggerated assessments of land value, so that the actual ratio
of land value to loan often jumped to 300% or more. To the public this was
a strange phenomenon. People soon dubbed it “excess money”. Only economists, analysts, and those working in
the financial markets or for real estate firms
knew better. They dismissed such
simplistic analysis. Land prices were going up due to far more complicated reasons than just excess money, they claimed. Ordinary people simply did not
understand the intricacies of advanced financial technology. International Capital Flows When a country creates
too much money, some of that money spills out abroad in the form of investments. In the 1980s Japanese capital flows multiplied from a net inflow of
more than $2 billion in 1980 to an outflow of $132 billion in 1986. Assets, including art objects
and other valuables all over the world became targets for Japanese buyers. There were high-profile purchases such as the Rockefeller Centre,
Columbia Pictures and Pebble Beach Golf Course. Japanese money bought a staggering 75% of
all United States treasury bonds auctioned off in 1986. But it is not easy for a country to just print money and then go on a shopping spree
around the world. Japan was able to do this because the markets
did not devalue its currency. The value of individual currencies is set by currency dealers. If the traditional indicators that the currency dealers watch do not pick up the excess money
creation in the country concerned, then creating large amounts of money and trying to exchange it
for foreign currency, can work. Japan had pulled off the same trick that the United States had used in the 1950s and 1960s, when US banks
excessively created dollars. Corporate America used this hot money to buy up European corporations. While the United States had the cover of
the dollar gold standard, Japan’s cover
was a significant trade surplus. Non-GDP based loan: A loan, which is not used for
the production of goods or services. An early warning indicator of the buildup of systemic risk
in the banking system is the ratio of loans for
non-GDP-based transactions to total loans. This ratio increases significantly
in most countries that are subsequently struck
by a banking crisis. It was this same process that fueled the mortgage lending
and house price booms in the United States and
the United Kingdom in the 1980s and the 2000s. The same process also created
the golden twenties: in the 1920s, United States banks
lent with stocks as collateral. The principle remains the same. As each bank took
the stock price as a given, it created new money. With more money in the stock market, stock prices had to rise. Each bank thought it was safe accepting a certain percentage of
the value of the stock as collateral, but the actions of all banks
together, drove up the overall market. In Japan, total private sector land wealth rose from ¥14.2 trillion in 1969 to 2000 trillion yen in 1989. At his first press conference as the 26th governor of
the Bank of Japan, in 1989, Yasushi Mieno said that, “since the previous policy of
monetary easing had caused
the land price rise problem, real estate related lending
would now be restricted.” He looked around,
looked at the bubble, asset prices rising, the gap between
rich and poor getting bigger, let’s stop it. His name was mister Mieno,
and he was a hero in the press, because he fought against
this silly monetary policy. But he was deputy governor
during the bubble era, and he was in charge
of creating the bubble. The Crash All of a sudden land and asset prices stopped rising. In 1990 alone, the stock market dropped by 32%. Then in July 1991, window guidance was abolished. This took
the window guidance officers at the Bank of Japan
themselves by surprise. Bankers were left almost helpless. They complained
that they did not know how to make their
lending plans anymore. In the past
when a certain branch said they would like to lend more, they would respond that the window
guidance quota had been used up. Now they couldn’t do that anymore. As banks began to realize that the majority of the ¥99 trillion
in bubble loans were likely to turn sour, they became so fearful that they not only stopped lending
to speculators, but also restricted loans
to everyone else. NEWS: Well it’s a bleak Christmas
ahead for Japan, the stock market on Monday sinking to its lowest close
in over two years. Last week’s collapse of one of
Japan’s biggest food traders was the 9th time this year that a listed company went under. More than 5 million Japanese
lost their jobs and did not find employment
elsewhere. Suicide became
the leading cause of death for men between the ages
of 20 and 44. The papers ran stories of people hanging themselves or going missing on an almost daily basis. Between 1990 and 2003, 212,000 companies went bankrupt. In the same period the stock market dropped by 80%. Land prices in the major cities fell by up to 84%. Some economists seemed relieved. The downturn was evidence that Japan’s economic system was not so successful after all. Meanwhile, the Governor of the Bank of Japan, Yasushi Mieno, said that: “thanks to this recession everyone is becoming
conscious of the need to implement
economic transformation,” The Failed Bailout The Ministry of Finance, believing that interest rates
were the main policy tool, put pressure on the Bank of Japan
to lower interest rates, until the official rate
reached 0.1%. Most economists predicted
an economic recovery. But despite frequent assertions
in the financial press and by central banks that lower interest rates
will stimulate growth and higher interest rates
will slow growth, there is no empirical evidence
for this relationship. NEWS: Japanese and American
businessmen are meeting here with a plea from Japan’s companies
for a lower yen. Only 6% of Japanese exporters can make profits with the dollar
at less than a ¥100. On average they need
the American currency to rise above ¥117 to break even. The Ministry of Finance
asked the Bank of Japan to sell large amounts of yen and buy US dollars, so that the exchange rate
of the yen would fall and exports would pick up. The two of them, the Ministry of Finance (MOF)
and the Bank of Japan (BOJ), they just don’t get along well. And what has been happening
again this month is that the Bank of Japan has been
sterilizing its own intervention, to be precise, the intervention ordered
by the Ministry of Finance. The Ministry of Finance
tells the Bank of Japan to go out and buy roughly 20
billion worth of US treasuries. But, the Bank of Japan is
sterilizing this, which means it is basically taking
the money from the economy to fund this purchase. Most researchers agree, sterilized forex intervention
doesn’t work. The BOJ is again sterilizing, that’s why it doesn’t work, that’s why the yen
has remained strong. A central bank can withdraw money
from the economy by selling its assets. Just as it can inject money
into the economy by buying assets. When central banks
buy and sell assets, they increase or decrease the amount
of money circulating in the economy. Officials at the Bank of Japan
ignored this, and instead claimed that, “this structural transformation
or reform may produce deflationary forces
in the short run, but will generate a much more
efficient economy after a while.” Independent observers suggested that domestic demand had to be boosted
by government spending, and then loan demand would also rise. For a decade, the government followed
their advice, boosting government debt
to historic levels. Between 1992 and 2002, 10 stimulation packages worth
¥146 trillion were issued. NEWS: Mr Richard Werner is chief economist at Jardine
Fleming Securities in Tokyo. He joins us now
to share his views on where the Japanese
economy is heading. The government was spending
with the right hand, putting money into the economy, but the fundraising was done
through the bond market, and therefore it took the same money
out of the economy with the left hand. There was no increase in
total purchasing power and that’s why the government
spending couldn’t have an impact. By 2011 Japan’s government debt
would reach 230% of GDP, the highest in the world. The Ministry of Finance
was running out of options. Observers began to blame
the ministry for the recession, and started to listen to the voices that argued that the recession was
due to Japan’s economic system. But how difficult would it have been to solve the problems of bad debt
in the banking sector, and deflation? It turns out that this would not
have been so difficult after all. The financial system always looks
like Catch 22, there’s no loan growth,
so there’s no economic growth, so there’s no loan growth,
so there’s no economic growth. Well, there is one thing that can
break through this circular argument, that’s the central bank. The job of the central bank in
this situation is to print money. The Power of Central Banks What we need now
is more radical measures, and there are some painful ones, but there are also painless ones. The central bank could for example
just buy all bad debts at face value. Japan would have the strongest
banks in the world. To bail out the banking sector a central bank can buy up
the banks bad financial assets with newly created money, giving them face value for assets, which are often worth
significantly less. This is what the Bank
of Japan did after the war. Alternatively, money could be
transferred to the banks by helping them make
sizeable profits. One way this can be achieved is for the central bank
to corner a market – in effect creating a mini bubble
in a certain market in which banks invest heavily, providing large profits for them. This turns out to be
a relatively common technique by central banks to help their banking systems. Other proposals include, measures to introduce zero risk
borrowers to banks or introducing accounting changes
that help their balance sheets. In Japan, the authorities and
the Bank of Japan argued, as did the Western powers
almost two decades later, that the taxpayer
should foot the bill. In March last year, the government injected
a large amount of money into some 15 major
Japanese financial institutions. And we were one of them. That helped us write off bad debts, and also to beef up our capital base so that we would be prepared to lend. Tax money has been used
to recapitalize banks. However, there is no evidence that
taxpayers have been responsible for the banks problems, therefore, such policies have likely created a moral hazard. The money supply is determined by the net increase
in money creation by banks and the central bank. If moral hazard dictates that the banking sector should
not be bailed out, deflation and recession can still
be avoided by the central bank. To do this, the central bank can
increase the money supply. A central bank can increase
the amount of money in an economy at any time, without limit, by simply buying assets
from the private sector and paying with
newly created credit. The Bank of Japan could for instance have bought real estate and converted it into public parks. And there is an opportunity here to
solve three problems in one stroke. The economy needs money creation, the banks need to get rid of
their bad debt and the real estate sector
needs some transactions. What you can do is just have
the central bank print money, buy the land from the banks, turn it into parks, and you solve another problem, quality of life in Japan. Even if the Bank of Japan
would have later sold these parks at a fraction of the cost, it would still have made money, because it costs
a central bank nothing to create the money
in the first place. Another option for injecting
money into the economy is quantitative easing. Despite having all these options
available, the Bank of Japan at every stage
refused to implement policies that would have resolved the crises. When I was at the Bank of Japan
in 1992-1993, as a visiting researcher, I was convinced that this recession
was going to get really bad. So I would ask any Bank of Japan
person who would talk to me, why aren’t you printing more money. I met one individual who
was quite open about this and he said: “Richard, sure we could have
printed more money, we could have created a recovery, but then nothing would have changed, Japan’s economic structure
would not have changed.” Now at that time I still
wasn’t ready to believe that the Bank of Japan was
prolonging the recession in order to get structural changes that just seemed a bit too wild. Finance Minister Masajuro Shiokawa
has turned to the Bank of Japan asking it to help stop deflation,
or fight deflation at least. The Bank of Japan consistently
defied calls by the government, finance minister and prime minister to create more money
to stimulate the economy and end the long recession. At times the Bank of Japan even actively reduced the amount
of money circulating in the economy, which worsened the recession. The Bank of Japan’s arguments
always came to the same conclusion, namely, that the blame lay with Japan’s economic structure. Central bank staff even argued that significant monetary easing “could cause harm” by inducing “a further delay in the
progress of structural adjustment”. The early postwar Japanese leaders knew that they were
running a war economy, but they chose not to talk
for political reasons. The cold war propaganda message was that post-war Japan had adopted a US style
political and economic system. Unwilling to tell the truth, the early post-war leaders, took their intimate knowledge about the origins of Japan’s
miracle economy with them to their grave. A generation of
bureaucrats and politicians reigned in the 1980s and 1990s, who did not understand the true character and purpose of their own country’s economy. A whole generation
of Japan’s economists had been sent to the United States to receive Ph.Ds and MBAs
in US style economics. Since neoclassical economics assumes that there is only one type
of economic system, namely, unmitigated free markets, where shareholders and
central bankers rule supreme, many Japanese economists
quickly came to regurgitate the arguments of US economists. Dismantling The Ministry Of Finance NEWS: The US and Japan closed two
days of insurance talks on Tuesday. Primary sector deregulation is needed to overcome
the entrenched interests of large insurance companies,
life and non-life, and the Ministry of Finance
bureaucracy. They need to reach an agreement
before December the 15th, after that date the US has
threatened to impose trade sanctions. A key move analysts are expecting
is the securitization of real estate. For more we are talking to
Richard Werner. To have meaningful securitization,
we need deregulation, and that’s already the
answer to your question, to get deregulation you have to
reduce the power of the Ministry of Finance, and obviously the ministry
was resisting that. In the 1980s, persons who could introduce
themselves with a business card from the renowned finance ministry, elicited deep and hushed
exclamations of awe and respect. But by the mid 1990’s
attitudes had changed, there now seemed little doubt to most observers, that the Ministry of Finance
had caused the recession. Frequent demonstrations were held
outside the ministry’s doors, by citizens disgusted by
the bureaucrat’s actions. In early 1998 public prosecutors
for the first time raided the most powerful
of Japan’s ministries. Both banks and their regulators were heavily criticized
for their actions. Scandals highlighted some
of the informal links that existed between Ministry of
Finance officials and bankers. Many bank staff, and even some ministry officials, were arrested and imprisoned, and several committed suicide. As central banker
Masaaki Shirakawa had explained: “it is not easy to change
the institutional framework and promote structural reform since it necessarily involves
the vested interests of all the related
individual economic agents.” While Yutaka Yamaguchi, a deputy
governor of the Bank of Japan, had said that, “the Bank of Japan
had faced the big dilemma that monetary easing would produce
the mitigation of immediate risks, which in turn would result in a delaying of adopting
ultimate solutions.” From the mid 1990’s onwards the Government began to dismantle
much of the power structure of the Ministry of Finance. The Bank of Japan on the other hand, saw its influence
grow significantly. NEWS: You have written
just recently, “there is no doubt in your mind, the Bank of Japan will be cut loose
from the Ministry of Finance and become independent, putting it on a footing
with other central banks.” Why are you so sure? The Ministry of Finance which
had been controlling legally at least the Bank of Japan, has lost all credibility. The Ministry of Finance
is being blamed for the creation of the bubble, for the long recession and for many other problems,
which we’ve had recently in Japan. Whereas the Bank of Japan has been out of the spotlight
of public criticism and it’s using that now to say, well, the MOF has been bad we need independence now. Richard, thanks very much. I have been speaking to
Richard Werner chief economist at
Jardine Fleming Securities in Tokyo. Soon after his retirement from the position of governor
of the Bank of Japan in 1994, Mieno embarked on a campaign
giving speeches to various associations
and interest groups. He lobbied for a change
in the Bank of Japan law. His line of argument
was to subtly suggest that the Ministry of Finance
had pushed the Bank of Japan into the wrong policies. To avoid such problems in the future, the Bank of Japan needed to be
given full legal independence. According to Mieno, making central banks independent reflected the human wisdom
that had been nurtured by history. In 1998 monetary policy
was put into the hands of the newly independent
Bank of Japan. So you’re saying that
politicians as well as economists should be putting more pressure
on the Bank of Japan to create more money. A lot of critics are going
to say that that is intervening in the
central banks independence. What do you make of that? That’s exactly right, that is intervening in the
central banks independence, and that’s exactly what we need. The Transformation Of
The Political System The numerous scandals that followed
the bursting of the bubble also brought down the 1955 system
of one-party rule by the Liberal Democratic Party. In the old system, politicians did not compete
by proposing different policies. Policy was made by the bureaucrats, and politicians merely focused on
appeasing local constituencies with public works projects. In October 1997, for the first time
in post-war history, all policy initiatives
to stimulate the economy originated from politicians,
not bureaucrats. Then in early 2001 a new type of politician
was swept to power. NEWS: Japanese Government bonds
staged their biggest rally this month as Junichiro Koizumi emerged
as the hot favorite to become the country’s
next prime minister. Junichiro Koizumi
became prime minister. In terms of his popularity
and his policies he is often compared to
Margaret Thatcher and Ronald Reagan. His message was simple, no recovery
without structural reform. At the Geneva summit in
July 2001 he said: “Some say recovery comes first,
without reforms, but if the economy recovers, the will to reform will disappear. Therefore, after the elections I will continue with the plan of no growth without
structural reform.” During 2001 the message of no economic
growth without structural reform had been broadcast
on an almost daily basis on the nation’s TV screens. NEWS: The countries at the G7 summit are putting pressure on Japan
to implement structural reform. In Korea there were riots, but then the government decided
to break up large conglomerates. Now their economy is recovering. Now is the time for Japan to implement structural reform. Now everyone believes
we need structural changes, we need to scrap
Japanese style capitalism to get a recovery,
why? It seems we tried all the policies, nothing worked, so the Japanese style
economic system must be to blame, so we better get rid of it. The Transformation
Of The Economy Japan was shifting
its economic system to a US style market economy, and that also meant that the center of the economy was being moved from
banks to stock markets. To entice depositors to pull
their money out of banks and into the risky stock market, reformers withdrew the guarantee
on all bank deposits, while creating tax incentives
for stock Investments. As US style shareholder capitalism
spread unemployment rose significantly, income and wealth disparities rose as did suicides and
incidents of violent crime. Then, in 2002 the Bank of Japan strengthened its
efforts to worsen bank balance sheets and force banks
to foreclose on their borrowers. Until then, Hakuo Yanagisawa, minister for financial services, had resisted
the Bank of Japan inspired proposal to inject tax money into banks, effectively nationalizing them, taking over their management and using this power
to call in loans from companies, thus triggering many bankruptcies
of large firms. Mr. Yanagisawa was duly sacked
by the prime minister and replaced with Heizo Takenaka, Takenaka was a supporter of
the Bank of Japan’s plan to increase
foreclosures of borrowers. Minister Takenaka was trying
to implement a policy to dramatically weaken
the balance sheets of the banks, in order to allow him
to nationalize them. Takenaka appointed a task force to oversee the banking policies, which included
two former Bank of Japan staff. One of them, Takeshi Kimura, immediately demanded that
accounting changes be implemented which would worsen
bank balance sheets and render nationalization
unavoidable. Takuro Morinaga,
a well-known economist in Tokyo, argued forcefully that the Bank of
Japan inspired proposal by Takenaka would not have
many indigenous beneficiaries, but instead would mainly benefit
US vulture funds specializing in the purchase
of distressed assets. These vulture funds
had faced the difficulty that despite over
200,000 bankruptcies, few firms sufficiently large for
the vulture funds to be interested were bankrupted. When Kimura’s and Fukui’s support
for the bankruptcy plan was voiced, the former operated
a private company that advised on the securitization
of distressed assets and the latter was an adviser of the Wall Street investment firm
Goldman Sachs one of the largest operators
of vulture funds in the world. Mister Fukui, also his mentor Mister Mieno,
and his mentor Mister Maekawa, and you’ve guessed it, these are some of the Princes of
the Yen that the book is all about. They have said on the record
in the 80s and the 90s, what is the goal of monetary policy? It is to change the
economic structure. Now, how do you do that?
Well, you need a crisis. And that’s really
what they have done. Richard, we’re out of time
I have to cut you off. WHISTLEBLOWER: I work for one of
the big city banks. I used to be in charge of liasing
with the bank of Japan. During the bubble era we were told every three months
by the Bank of Japan, how much loans had to be
increased by. The Bank of Japan window guidance
allocation was an order. The cause of the bubble was
the window guidance, and it was done on the order
of the Bank of Japan. The department responsible for the window guidance quotas
at the Bank of Japan, was called the Banking Department. And who was in charge of this? The man at the head
of this Banking Department during the bubble from 86-89 was Toshihiko Fukui. Mister Fukui, the current governor
of the Bank of Japan, he’s the man who created the bubble. When Fukui had become
governor of the Bank of Japan, he would say: “while destroying the
high-growth model, I am building a model
that suits the new era.” They have succeeded on all counts. If you look at the list
of their goals, they’ve reached all those goals: Destroy the Ministry of Finance,
break it up, get an independent
supervisory agency, reach independence for
the Bank of Japan itself by changing the Bank of Japan law and engineer deep structural changes
in the economy, by shifting from
manufacturing to services, opening up, deregulating, liberalizing, privatizing, the whole lot. In the 1920s, Japan’s economy in many ways
resembled today’s U.S economy – with fierce competition,
aggressive hiring and firing, takeover battles
between large corporations, few bureaucratic controls, strong shareholders that
demanded high dividends, and corporate funding from
the markets, not banks. Yet throughout the postwar era, Japan’s economy
had been the opposite: highly regulated,
with cartels limiting competition, bank financing and cross shareholdings reducing shareholder power, no takeovers,
and a frozen labor market with lifetime employment
and seniority pay. It was claimed that to end the
recession and improve performance, Japan must shift from
welfare capitalism back to shareholder capitalism. Yet it remains unclear why a country that had run
a consistent and significant balance of trade surplus would need to change
its economic system to become more competitive. The Southeast Asian Crisis Japan was not the only
high-performance economy in Asia that in the 1990s found itself in the deepest
recession since the great depression. In 1997, the currencies of the
Southeast Asian Tiger Economies could not maintain a fixed
exchange rate with the US dollar. They collapsed by between
60 and 80% within a year. The causes for this crash
went as far back as 1993. In that year, the Asian Tiger Economies,
South Korea, Thailand and Indonesia implemented a policy of aggressive
deregulation of the capital account and the establishment of
international banking facilities which enabled the corporate
and banking sectors to borrow liberally from abroad –the first time in the post-war era that borrowers could do so. In reality, there was no need
for the Asian Tiger Economies to borrow money from abroad. All the money necessary
for domestic investment could be created at home. Indeed, the pressure
to liberalize capital flows came from outside. Since the early 1990s, the IMF, the World Trade
Organization, and the US Treasury had been lobbying these countries, to allow domestic firms
to borrow from abroad. They argued that
neoclassical economics had proven that free markets and
free capital movement increased economic growth. Once the capital accounts
had been deregulated, the central banks set about
creating irresistible incentives for domestic firms
to borrow from abroad. By making it more expensive to borrow in their own domestic currencies than it was to borrow in US dollars. The domestic local interest rates were higher than
the US dollar interest rate, and the exchange rate
was virtually fixed. It was the government
and the central bank that said: “we will
maintain the exchange rate.” That’s right, central banks
of Thailand and other East-Asian countries resisted exchange rate adjustment and they tried to send a signal that they would protect
the exchange rate. The central banks emphasized
in their public statements that they would maintain fixed
exchange rates with the US dollar, so that borrowers
did not have to worry about paying back more
in their domestic currencies than they had originally borrowed. When I was in Thailand, I went straight to the
Bank of Thailand and asked them: “were there any informal
credit guidance schemes?” And they were surprised
that I asked this question. Because of my study in Japan, I thought perhaps
there was something similar. And they told me, it was a young staff who perhaps wasn’t aware
of the politics involved, he said: “yes, yes, we have
this credit planning scheme.” Banks were ordered
to increase lending. But they were faced
with less loan demand from the productive sectors
of the economy, because these firms had
been given incentives to borrow from abroad instead. They therefore had to resort to increasing their lending
to higher risk borrowers. Imports began to shrink, because the central banks had agreed to peg their currencies
to the US dollar. The economies became
less competitive, but their current account balance
was maintained due to the foreign issued loans, which count as exports in the
balance of payments statistics. When speculators began to sell the Thai baht, the Korean won,
and the Indonesian rupee, the respective central banks responded with futile attempts
to maintain the peg until they had squandered
virtually all of their foreign exchange reserves. This gave foreign lenders
ample opportunity to withdraw their money at
the overvalued exchange rates. The central banks knew that if the countries ran out
of foreign exchange reserves, they would have to call in
the IMF to avoid default. And once the IMF came in, the central banks knew what this Washington-based
institution would demand –for its demands in such cases
have been the same for the previous three decades: The central banks
would be made independent. On the 16th of July the Thai finance minister
took a plane to Tokyo to ask Japan for a bailout. At the time Japan had US$213
billion in foreign exchange reserves –more than the total resources
of the IMF. They were willing to help, but Washington stopped
Japan’s initiative. Any solution to the
emerging Asian crisis had to come from Washington
via the IMF. NEWS: After 2 months of
speculative attacks, the Thai government floated the baht. The IMF to the rescue The IMF to date has promised almost $120 billion to the embattled economies of Thailand, Indonesia and South Korea. Immediately after arrival
in the crisis stricken countries, the IMF teams set up offices
inside the central banks, from where they dictated
what amounted to terms of surrender. The IMF demanded
a string of policies, including curbs on central bank
and bank credit creation, major legal changes and sharp rises in interest rates. As interest rates rose, high-risk borrowers began
to default on their loans. Burdened with large amounts
of bad debts, the banking systems of
Thailand, Korea, and Indonesia were virtually bankrupt. Even otherwise healthy firms started to suffer from
the widening credit crunch. Corporate bankruptcies soared. Unemployment rose to the
highest levels since the 1930s. The role of the fund in coming
to the rescue of ailing nations has been fiercely debated. Some have even accused the IMF of making Asia’s
economic crisis worse. Even if they have to
subvert our economy they will do so just to prove
that they are right. The IMF has not been very helpful. The IMF knew well what the consequences
of its policies would be. In the Korean case, they even had detailed
but undisclosed studies prepared that had calculated just how many Korean companies
would go bankrupt if interest rates were to rise
by five percentage points. The IMF’s first agreement with Korea demanded a rise of exactly five
percentage points in interest rates. The IMF policies
are clearly not aimed at creating economic recoveries
in the Asian countries. They pursue
quite a different agenda, and that is to change the economic,
political and social systems in those countries. In fact, the IMF deals prevent
the countries concerned, like Korea, Thailand, to reflate. Hmmm, interesting, you are saying
it’s making the crises worse and you’re suggesting that
the IMF has a hidden agenda. It’s not very hidden this agenda, because the IMF clearly demands that the Asian countries concerned
have to change the laws so that foreign interests can buy
anything from banks to land. And in fact, the banking systems
can only be recapitalized, according to the IMF deals, by using foreign money. Which is not necessary at all, because as long as these countries
have central banks, they could just print money and
recapitalize the banking systems. You don’t need
foreign money for that. So the agenda is clearly to crack
open Asia for foreign interests. The IMF demanded that troubled
banks would not be bailed out, but instead closed down and sold
off cheaply as distressed assets, often to large
US investment banks. NEWS: One positive
coming out of Thailand is that they will be
auctioning off some major assets from 56 finance companies. In your view should eehm, some of the owners
of the 56 finance companies be allowed to buy back their assets? In most cases, the IMF dictated letters of intent explicitly stated that the banks had to be sold to foreign investors. And let me emphasize
in that respect, these reform programs are the key,
the absolute key to restoring financial stability. NEWS: For the first time ever, South Korea closed five banks in a major step towards meeting
its IMF mandate. The number of commercial banks
has declined, has been reduced
as a result of closures, mergers and acquisitions, and foreign strategic investors
are now in, which is a remarkable change. In Asia,
government organized bailouts to keep ailing
financial institutions alive were not allowed. But when a similar crisis struck back home
in America a year later, the very same institutions
reacted differently. The Bailout of
Long Term Capital Management The Connecticut-based hedge fund Long-Term Capital Management, which accepted as clients only high net worth individual
investors and institutions, had leveraged its $5 billion
in client capital by more than 25 times, borrowing more than $100 billion from the world’s banks. When its losses
threatened to undermine the banks that had lent to it, with the possibility of
a systemic banking crisis that would endanger the
US financial system and economy, the Federal Reserve
organized a cartel like bailout by leaning on Wall Street
and international banks to contribute funds so that it could avoid default. You’re right, the views from
Washington and New York certainly seemed quite flexible, because soon after they told
all the Asian countries “no bailouts for
financial institutions,” when Long Term Capital Management, a hedge fund in New York
almost went bust, suddenly a bailout was organized, contradicting what they had
just said to the Asian countries. But they said that no public
money was used for LTCM. But the meeting was held famously
inside the Federal Reserve. Why would the United States
make demands on foreign nations in the name of the free market, when it has no intention of enforcing the same rules
within its own borders? The examples of the
Japanese and Asian crises illustrate how crises
can be engineered to facilitate the redistribution
of economic ownership, and to implement legal,
structural and political change. Today similar events are at work in the Eurozone area. The European Debt Crisis. Countries within
the Euro currency bloc have forfeited their right
to a national currency and handed this power to
the European Central Bank. NEWS: With me here in the studio
is Richard Werner. He is a professor at
Southampton University, What’s your advice to the ECB, they’re meeting tomorrow,
what would you be telling them? Well, again, they have to focus on
the quantity of credit creation more than interest rates. The ECB has a lot to learn
from its past mistakes, because I don’t think
it really watched credit creation carefully enough. In Spain, Ireland,
we had massive credit expansion under the watch of the ECB, interest rates of course
are the same in the Eurozone, but the quantity of credit cycle
is very different. There’s one interest rate
for the whole euro area, but in 2002 the ECB told the
Bundesbank to reduce its credit creation
by the biggest amount in its history and told the Irish central bank
to print money as if there was no tomorrow. What is going to happen?
Same interest rate, is it the same growth? No. Recession in Germany,
boom in Ireland. From 2004, under the ECB’s watch, bank credit growth in Ireland,
Greece, Portugal and Spain increased by over 20% per annum and property prices sky rocketed. When bank credit fell, property prices collapsed, developers went bankrupt, and the banking systems of Ireland, Portugal, Spain and
Greece became insolvent. The ECB could have
prevented these bubbles, just as it could have ended the
ensuing banking and economic crises. But it refused to do so until major political concessions
had been made, such as the transfer of fiscal
and budgeting powers from each sovereign state
to the European Union. In both Spain and Greece youth unemployment
has been pushed up to 50%, forcing many youths
to seek employment abroad. Greek doctors for whose education
Greek taxpayers have paid, now work in Germany. The deliberations of the ECB’s
decision-making bodies are secret. The mere attempt
at influencing the ECB –for instance through
democratic debate and discussion– is forbidden according to
the Maastricht Treaty. The ECB is an
international organization that is above and outside
the laws and jurisdictions of any individual nation. Its senior staff
carry diplomatic passports and the files and documents inside
the European Central Bank cannot be searched or impounded by any police force or
public prosecutor. The ECB is well known
among economists as one of the world’s most powerful and least transparent central banks, yet its former president Jean-Claude Trichet dealt with this problem by merely asserting that
there was no problem: ”the ECB is one of the
most transparent central banks in the world and has helped define the state-of-the-art
of central banking in this domain,” he claimed. World Economic Forum
– Davos, Switzerland. My name is Richard Werner
I am an economist… My question is for monsieur Trichet. The question is, where in the Maastricht treaty
or ECB statutes does it say that it is the job
of the ECB to back structural reform or
any other political agenda. I said very, very clearly, and we
have always said very, very clearly, that we had no responsibility
in this domain. We have a voice,
and we say what we think. And perhaps if we can help
in explaining from our side to the general people that
they would be better off, perhaps it would help
Europe embarking in this implementation of
structural reforms, which is so important, and there is a consensus on that, the diagnosis again, is ehh ehh ehh a very very very large consensus on this eh, on this point. The European Commission, an unelected group whose aim is to build a
United States of Europe with all the trappings
of a unified state, has an interest in
weakening individual governments and the influence of the
democratic parliaments of Europe. It turns out that the evidence
for central-bank independence that was relied upon
in the Maastricht Treaty derived from a single study
that was commissioned by none other than
the European Commission itself. Published in 1992 under the
name “ one market, one money”, the study purported to demonstrate that central bank independence
led to low inflation. James Forder, an Oxford academic, has since demonstrated that this study was manipulated to obtain the desired result. The story we’re being told
by the central banks does not add up, and there is evidence that
central banks work differently from what they would like us
to believe as to how they work. The world over, central banks hold significant,
yet little understood powers. Often independent,
unaccountable and obscure, central banks operate in the shadows, yet their actions affect us all. Central banks in almost
all countries worldwide, and the IMF has helped
a lot in achieving this, they have become totally independent and in practice not accountable to any democratic institution. And accountability to parliament is usually minor and
in practice meaningless. Whether it is the Bank of Japan, the Federal Reserve,
the Bank of England or the European Central Bank, examples of central bank deception
abound. In the United States in the 1920s, banks were encouraged
to create money and give it to speculators. The resulting depression persuaded
the freedom loving Americans that a decentralized federal system without strong national controls, could not work. In the 1990s
the Japanese were persuaded that their economic system, which had brought considerable
prosperity and equality, needed to be changed into a so-called free market system. And while Japan’s transformation
was not yet complete the central bankers struck again, with an IMF led raid
on the Asian Tiger economies. The present European debt crisis is yet another example
of central bank deception. To create a public consensus for the need for structural reform by purposefully creating a recession and then needlessly prolonging it, must constitute an abuse of power. Do citizens really
want to be manipulated in such a costly and
dishonest manner? The End

100 thoughts on “Princes of the Yen: Central Bank Truth Documentary

  1. The film is very interesting, albeit very slow during the first hour. But it doesn't address the key issue: what are the "structural reforms" desired by the central banks? The Japanese Central Bank simply wanted Japan to be less prosperous and more unequal? What's the plan?

  2. informative – music is a bit heavy and repetitive. the firm Goldman Sachs seems to turn up in two places: admiring and envious newsreaders speaking of profits and bonuses – and crises involving volatility, bad debt and taxpayer bailouts.

  3. It always puzzles me why US has been pushing western democracy so hard on third world countries. If you don't implement western democracy we will bomb you, assassin your leaders, implement coups and economic & trade sanctions and finally direct invasions.

    Why would the western leaders, who we can see don't really give a damn about their own people most of the time, give a damn about the people of other countries?

    Under that threat Japan, South Korea, Taiwan, etc. are all forced to change in past 20 years. Their grow rate almost immediately flattened.

    After watching this movie I finally understand. It is about shareholder centric free market economic and political system. It is a system built to protect businesses and business owners. Forcing other countries to accept the western system is to make sure rights of those businesses are protected in those countries as well.

    Just think if you are a rich business owner and you need to design a system to protect your rights as a social class. Could you come up with a better system?

    In activist circle there is this "Power of one" saying, western democracy basically makes sure that is not going to happen. No one institution or person can change the system. That is essential to the survival of the system.

    Political parties are built on funding not ideology, that will exclude majority of people from political system. Other than business owners, unions are a political force as well, but only when businesses are profitable they can demand their "fair share", so they are in essence pro business as well. All the media outlets are businesses themselves so they also have a natural bias. People have votes but majority of them are oblivious, and can only choose between 2 or 3 well funded (read pro business) political parities. Voting process is simply a process of venting anger. The "invisible hand" makes sure the system is protected.

    It is not all bad. People's votes mean that common people can not be ignored too much. Of course they will try to get away with it as much as possible.

    The genius part of the system is that even you understand it. There is very little chance you can change it.

  4. i always thought Joker from Dark knight is one of the craziest character I've seen. well now as i see this Doc, bankers/capitalists are nothing less

  5. What is still unclear to me, if someone may provide an answer that would be great. What is the underlying reason for all these central banks to become independent? What is the point to engineer these crises for eg. in Europe? Yes, we implement structural reform. But for what reason? Qui bono?

  6. Support more documentaries like the Princes of the Yen,
    One off donations through Liberapay: https://liberapay.com/IndependentPOV
    Monthly donations through Patreon: https://www.patreon.com/independentdocumentary
    It takes 2 years to create a documentary of this quality!

  7. THIS IS CANADA. THIS IS AUSTRALIA. PROTECT YOUR MONEY. DOWNSIZE. PAY OFF DEBT. PAY OFF MORTGAGE. YOU WILL NOT BE GREEN FOREVER

  8. 22:00 and continuing: Inflation Deflation cycle. First, increase money supply and then, contract it by calling in old loans and not issuing new ones. Oldest trick of these monsters.

  9. Was the National Bank of Japan forced to increase the money supply, also to bye up US Bonds in order to enable an increase of US Dollars?

  10. Who will do the same thing to the United States. Vaporise the industrial military complex and prohibit corrupt politicians and businessmen from ever becoming powerful again?

  11. IMF be like: ".. hey kid wanna try some crack? it's good shit! …. (time passes) … what you can't pay us? that's ok, we'll take your mom and kid sister in lieu"

    For more on the conduct of Criminal Global Banks see John Titus excellent documentary, the Veneer of Justice in a Kingdom of Crime: https://www.youtube.com/watch?v=eHgbRYgpGGs

  12. The work is in curating such a piece of work. I can only imagine that by giving us data from the last decade and last five-year, we would be able to follow these economies to the digit, right? Otherwise, great history great base – all money no culture.

  13. The post-history of Japan rather supports the contention that in developmental terms, the Japanese were indeed, and remain at the pre-teen level. Interestingly, the only two nations in East/South East Asia that have developed robust democratic systems are both former Japanese colonies: South Korea and Taiwan. Sadly, the rest of the region, like Japan, continues to exhibit a level of political developmental maturity that could most charitably be described as juvenile. I'm writing this from pre-election Thailand, where the situation isn't so much teenage, but positively kindergarten.

  14. Coming to a town, city, country, near YOU,… SOON !!!
    .
    And ALL of these Central Banks,… are but mere puppets of the following (wealth transfer entities):
    – International Monetary Fund
    – World Bank
    – Exchange Stabilisation Fund
    – Bank of International Settlements
    .
    These INSTITUTIONS with SELF-DECLARED IMMUNITY against prosecution, and run out of the IMMUNE 'sovereign' cities – LONDON square mile, VATICAN & BASEL,… where all of these economic ACCORDS are devised for this purpose,… along with their major FAMILIES from the 1800's,… all need to be DISSOLVED, DISBANDED,.. and their assets returned to – WE THE PEOPLE.
    – – It's started – World Bank – looses immunity !!! https://youtu.be/bk3PR-BvER4
    .
    .
    comment made on video >>> https://youtu.be/p5Ac7ap_MAY

  15. What the American assholes were doing in Pearl Harbour!? Whoever attacked them there was absolutely right. American assholes go home!

  16. never knew the banking system related documentary would've kept me glued to the screen the whole time. Please can you guys upload something related to the indian central bank (the reserve bank of india). Love from india to the world and especially the people who created this thought provoking documentary.

  17. As the Bankers are encouraging the public to abandon cash, thereby having total control over the public's money, I try to use cash instead of debit or credit cards as much as possible. Will it make any difference when millions of others views carrying cash as a nuisance?. Nope but I do my bit to halt those thieving bastards, AKA Bankers. (ps… also buy Silver coins (and Gold) when I can ).

  18. Japan forever, anglos – never. The anglo will always run to the Jew, to enslave others, so that he need not work. Save your countries, turn your backs to the Jew and its lap dog the WASP. Watch your back afterwards and never make the same mistakes again.

  19. How could you not title this "Princes of the Yeniverse" and have Queen come in every time you show Yasushi Mieno

  20. The private central banks and their friends (BIS, IMF, WB, FED, ECB and Bank of <put your country name here>) aim for total world domination through centralization. Everything that is independent, strong and decentralized is a direct threat to them and therefore an enemy they seek to destroy with any means necessary. E.g. decentralized crypto currencies is one big threat for them.

  21. From my study, the Japanese economy burst resulting from the agreement that had been taken place in 1985 , commonly known as The Plaza Agreement held at the Plaza hotel in New York City(which was not mentioned in this clip). During this time, American industry was having enormous difficulties to sell "American-made goods and services" globally because of the strong currency(dollar) against the Japanese yen, Dutsche Mark, French Franc and British pound. The major American companies such as grain exporters, car producers, engineering companies and high-tech put the pressure on Congress passing protectionist laws that ultimately led to the Plaza Agreement which turned out to be significantly successful for American industry. As a result of the Plaza Accord, the exchange rate value of the dollar versus the yen declined 51% from 1985 to 1987. (within three years after the agreement, Japanese yen suddenly gained the value more than double to 120 USD/JPY from 242 USD/JPY.) This is the major reason why Japanese economy suddenly burst NOT because as this clip is saying. Japanese government had no choice but signing on the agreement regardless knowing how much impact this could bring to Japanese economy. That's how much powerful America was(is) to Japan and not surprisingly the very similar thing is happening currently over China. America always somehow interferes other countries and shake them to the core so that they can get the most profit out of everything even if those profit was forcibly made off someone else's losses. Japan obviously could not continue to grow their economy especially in the time that America was tremendously going through the economy crises. Basically Japan was put in the situation that they had to stagnate their economy in any ways by bursting their own bubbles.

  22. Did Japanese industry boom after WW2 due to central planning, or despite it? Central planning did not re-invent the Japanese people after all. They were already smart and industrious to begin with. A better argument can be made for them being successful regardless.

  23. Bitcoin is an exit from this corruption to money free from debt and slavery, get educated. Read The Bitcoin Standard today and you'll understand.

  24. IMF is just the Cosa Nostra. It will come to "aid" when crisis occur and then it takes the countries to the cleaners. Huge loans that never can be paid back and then they forgive the interest, if the country gives natural reservers or give oil rights to foreign companies. The loan is spent on highways and other crap, that does not boost the country's production or economy. Halliburton builds the highways. So when the IMF comes to help your country out, you need to sell your shit and move out fast!

  25. Central planing does not work . Why do these clowns always come up with planes for economies ? when the will need and wants of the people will dictate the economy . 
    QE didn't work . 
    Structural changes in economies come after deflation and debt destruction , why do central banks try and intervene .
    Central banks blow bubbles by inflating the currency supply that always leads to imbalanced economies with sectors that just are not needed , namely financial . If we got ride of 90% of the financial makes and creatural banks central planers the world would be a better place .
    We need to get back to gold to protect ourself from government and privet banks and endless war payed for by fiat currency .

  26. They forgot to mention Mr. Demming had every thing to do with Japans economic recovery, the very system the U.S rejected.

  27. This so called documentary is so full of assumptions and false conclusions that it makes its title laughable. It bends the truth more than anything else. Please look at the spin this so called documentary employs, listen to the music and sound effects it uses to invoke an emotional response to almost all accusations it makes. Don't swallow everything in this film as truth, question it and look beyond. Don't be puppets.

  28. The ECB may be protected from scrutiny by individual Member States but is still an EU Institution subject to the Treaties of which The EU's Fundamental Rights Charter is a fundamental part.

    Article 41of Fundamental Rights Charter of the EU
    .
    Right to good administration

    1. Every person has the right to have his or her affairs handled impartially, fairly and within a reasonable time by the institutions, bodies, offices and agencies of the Union.

    2. This right includes:

    (a) the right of every person to be heard, before any individual measure which would affect him or her adversely is taken;

    (b) the right of every person to have access to his or her file, while respecting the legitimate interests of confidentiality and of professional and business secrecy;

    (c) the obligation of the administration to give reasons for its decisions.

    3. Every person has the right to have the Union make good any damage caused by its institutions or by its servants in the performance of their duties, in accordance with the general principles common to the laws of the Member States.

    4. Every person may write to the institutions of the Union in one of the languages of the Treaties and must have an answer in the same language.

    Regulation Directive 2013/36/EU
    http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32013L0036

  29. Nothing will change absent massive bloodshed. Its unfortunate that humanity has to suffer due to childish, selfishness. It will take another crisis to make meaningful change, only this level of change will require death counts higher than ww2.

  30. このドキュメンタリーは、日本人こそが見るべきだろうに、コメントの多くは外国語。
    日本人の視聴者は少ないのかね?

  31. Good documentary, i wonder what the central banks plans are for dealing with climate change or are they going crash everything an go hide!! Question, why is the amount given in Spanish subtitles, different from the amount give by the narrative? Ie. trillion v billion or billion v millions thank you

  32. A little more insight into what specific do a central bank do would be nice. And also I think the jewish role in central banking are missing.

  33. This documentary has completely changed my opinion on Brexit! I’m now a supporter of Britain to leave the European Union and maintain its independence 🤔👌🏾

  34. So I guess Rahm Emanuel's adage applies here, "never let a crisis go to waste". And central banks can take the next step: if one isn't available and you're a central bank, then by all means create your own crisis.

  35. Richard Werner is the economist who's interviews guide the narrative of the video. His book on the topic is available here: https://play.google.com/store/books/details/Richard_Werner_Princes_of_the_Yen?id=8VwMxQY6Kj8C

  36. "Yet it remains unclear Why a Country with consistent balance oftrade surplus ,would need to change its economic system to become more competitive"
    Buahahahahaa . Because the US pressured them to do so :p

  37. I love these Documentaries ! if you guys love this documentary as I do, Check out my College Senior Seminar project inspired by Aaron Russo. But not as high production but going into more on history of American Central Banking during early America in the American Revolution.
    –> https://www.youtube.com/watch?v=lLIzSTJ-8wA&list=PLlgtneNpqbvdTumzohkOP-SEPOhlyvila

    Thank you and Id love your support and any interest. Namaste Truth Seekers!

  38. why didnt the people of japan just vote the central bank out of power , the west should also do that. they only have power cos we the people arnt doing anything about it.

  39. 34:20 is tantamount to Jeff Bezos employee stock compensation actions, which are supported because the market doesn't deflate the share prices even as more shares are generated and released.

  40. It's the same thing they did to Iraq. This cycle, has been repeating for centuries. They control people by starting at their youth and corrupting them to old age.

  41. If only it was so simple… and I do not mean that economics is complex beyond laymen understanding. I mean, it is an easy way out to just pile the dirt on some other group of individuals but yourself. While yourself enjoys better dividends, lower prices, and all the other rotten stuff… "better is better, bad is bad. So, let us make it better" Well the Spanish inquisition and the French Revolution tried… and we still do. Ever so intricately.

  42. All very confusing with the bald economist churning out data like a computer and showing Simon wrestling and poodles and moggies to explain his data.when in actual fact it's the banks and politicians and boardroom types who are committing mega theft of resources on a humongous scale. To them just one question .you'll die one day, will you be able To Take all your amassed wealth with you? Is it all worth it?

  43. This doc would be better if it didn't rely virtually exclusively on Richard Werners footage as its evidence documents.

  44. Independent banks are simply the reason for failure.
    Rothschilds banking doesn't work and is exactly the reason the world is collapsing.
    They are Banking CRIMINALS

  45. この映画は完全にアメリカ史観に基づいて作られた映画でしょうか。
    はっきり言って日本人の私にはとても不快な作品です。
    アメリカの「自己都合中心主義のウソを大量にはらんだ占領政策」は占領中に方針転換を図る必要があったことは知っていますが、それはただただ単に「実は日本がこれまでコミュニストと真摯に戦ってきた事実にアメリカが気づいたから」に過ぎず、日本軍を武装解除させたことで「共産主義者とのいつ終わるとも知れぬ戦いの肩代わりをする羽目になった」という事実が表面化したからです。
    しかし一度、武装解除をさせた軍隊を復活させると自分達に都合の悪い結果になることも事実で、結果的に占領政策の前半期に日本に作らせた憲法のせいで自分達もアジアの泥沼に植民地を持たない形で脚をすくわれる結果になったと理解しています。
    幸いにも日本に共産主義政権が誕生することはありませんでしたが、それは、国会前を取り囲んだデモ隊に「経済成長のために働いた方が豊かになるという事実をぶら下げて釣っただけ」であり、本質的に日本人がアメリカ人と仲良くなることにはつながりませんでした。
    その事実に今更気づいても「もう既に手遅れ」なのですが、アメリカに騙され、踊らされて来たことに日本人が気付くのも遠いことではなく、その結果はアメリカ人が自らの首を絞めることになるでしょう。
    アメリカでもトップ0.1%がGDP全体の20%にも及ぶ莫大な儲けを背景に政治家たちを操って自分達に都合のいい法律を作らせたり、メディアを操って、国民が知るべき情報を操作して搾取しやすい環境を整えることが頻繁に行われているのは知っています。
    特に最近ではクリントン政権の時に税率を金持ち優遇の引き下げが行われ、その肩代わりに国民が貧困層には異常に高い税率で負担を強いられる構図になっています。
    はっきり言うとトランプ大統領は「そんなアメリカ型自由主義経済の反動勢力」が貧困層の浮動票で出来た政権です。
    今、その金融資本家の隠然たる権力にすり寄り、国民を騙そうとしていたのがヒラリークリントンで、それが選挙でトランプに敗れた理由であることは「公然の秘密」です。
    政治資金規正を強化して、純粋にアメリカ国民を豊かにする方向に舵を切らないと、そのうち自分達の「権力者の都合でついたウソに自分達が飲み込まれる時が来る」と言っておきます。
    そのような金融資本家は300年前の産業革命当時のイギリス資本家がルーツで、搾取された国民貧困層に不満が蓄積して、やがては易姓革命的な騒乱が起こるかも知れない危機をはらんでいるのですが、それには敢えて触れずに「欺瞞の政治」を続けることがいかに危険な事か近い将来に答えが出るでしょう。
    これを日本では「因果応報」と言います。

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