Japan imploding and no one is watching

Mish has some coverage on Japan today in Japan's Social Security Panel Wants to Double Sales Taxes; Tax Cut Independents Win Local Elections in Landslide; Japan's Debt Trap Has No Escape

He links to an article about election results that speaks to the social mood in Japan.

ANALYSIS: Japan's two-party system is collapsing
Landslide victories for independent candidates in local elections in central Japan earlier this month shocked the nation's two major parties and revived public doubt about the nascent two-party system.

'It is the beginning of the collapse of the two-party system,' Minoru Morita, a veteran political analyst, said.

The independents, Hideaki Omura, and the Nagoya Mayor Takashi Kawamura, who campaigned for tax cuts, defeated candidates endorsed by the big parties in the Aichi gubernatorial election and the mayoral race.

Omura, who was ousted from the opposition Liberal Democratic Party (LDP), and Kawamura, a former Democratic Party of Japan (DPJ) member, took advantage of the public's frustration with the two parties, analysts said.

'Those who support Ichiro Ozawa also voted for Omura and Kawamura as the DPJ has been divided over infighting,' Morita said, referring to the scandal-tainted former DPJ leader, one of Japan's most influential political figures.

'Many Japanese have been repulsed and furious over the DPJ as they voted for the party [in 2009] expecting that it could bring about major changes to the nation's politics,' Morita said.
The LDP pretty much ran Japan as a one-party country for most of the post-war era, until the DPJ knocked them out less than two years ago. However, the nascent two-party system, as the article describes it, is already breaking down into multi-party democracy—at least for now.

I don't know the particulars of the Japanese electoral system, but it appears they have proportional representation, which means the one-party system was cultural. In the U.S., a multi-party election (such as in 1860) results in a minority candidate winning the seat. Therefore, even if multi-party elections took place, the system would collapse back towards two parties. In Japan, cultural inertia could push the country back towards one or two parties, but there is no structural push.

Social mood is going to turn very negative in Japan. They are broke and there are no bailouts coming. Nikkei versus gold hit a new low in November. An interesting factoid I saw recently was that gold has not reached a new nominal high in yen. In 1980, when gold hit $875 an ounce, the exchange rate from $ to ¥ was about 230. Gold was about 200,000 yen per ounce then, today it is 115,000 yen. If gold enters a clear bull market, it will be at highs in every single currency around the world. Japan will get there via rapid devaluation of the yen.

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