(This issue is submitted to a Washington D.C., Seattle, and Zurich think-tank as the English edition of “Straight from Shoulder”.)
"Straight from the shoulder " by Toshio Masuda October 13, 2016
( Free of charge to the people I met)
A Descendant of One of 47 Ronin
Interview by Julia C. Guth, CEO & Executive Director, The Oxford Club
Japanese Economist; Best-Selling Author; Journalist; Radio and TV Commentator; Political Consultant; Global Investor and Traveler; Descendant of One of the 47 Ronin in Japan
Member since 2003
Julia Guth: Mr. Masuda, in Japan you must be famous. You have the country's longest-running financial radio show. How did you get started?
Toshio Masuda: Yes, I have a live morning talk show on the radio. I started it in 1997. It's a bit like the Larry King show but is focused on global and domestic politics that influence the global economy. I had Oxford Club Chief Investment Strategist Alexander Green on last year, live broadcasted in Japan, when we were attending your conference in Hawaii.
Julia Guth: Your listeners who are Japanese investors and savers... you've said they think about money very differently than U.S. investors do. Can you help us understand the difference?
Toshio Masuda: The Japanese save around 30%, which is unheard of in the United States. They are conservative. They don't spend the way Americans do. And they don't consider "saving" a type of investment. Savings are good, but too much is bad for our economy. The Japanese don't invest like entrepreneurs; they don't take risks.
Right now, Japanese cash savings is US$16 trillion - $16 trillion! This means that Japanese savings almost equal the entire U.S. GDP.
Julia Guth: Outsiders say Japan has a "zombie economy," with the world's greatest amount of debt relative to GDP. And like our government, your prime minister wants to continue spending, saying he wants to invest in crumbling infrastructure. Like our Federal Reserve, the Bank of Japan is issuing lots of debt in the form of government bonds.
Like much of the rest of the world, Japan is dealing with deflation and negative interest rates. How will Japan get out of this dangerous debt spiral?
Toshio Masuda: Japan has been suffering depreciation for these 15 or 20 years because of very stagnant, low economic growth, and also consumption is not going up. Prices are going down, income is going down, and commodity prices are the same or going down... so yes, we are in a deflationary spiral.
On April 4, 2013, our prime minister, Shinz? Abe, welcomed a big-stimulus, easy-money policy like the U.S. did. And it's not working. And now Mr. Abe is pushing for a 28 trillion yen investment infrastructure project to repair all kinds of infrastructure broken by storms and natural disasters.
Mr. Abe is going to borrow whatever he wants from the Bank of Japan, and then the bonds will be auctioned off.
But here's the big difference between the bonds in Japan and those in the U.S. These bonds will be bought in seconds by the Japanese. There's no chance for a foreign bank or a foreign people to buy Japanese bonds because they're restricted.
Only a Japanese bank can buy a Japanese bond. So - in our case - all the Japanese debt is owned by Japanese people. And they don't sell. Even after they die, they don't sell. This gives us a sense of security about our debt that you don't have in the United States.
Julia Guth: You and your wife, Mariko, have so many impressive projects. Tell me about your Masuda Research. What kind of research do you do?
Toshio Masuda: We provide political and economic intelligence for what's happening in Japan both to our high-level contacts in the Japanese government and to think tanks around the world. I'm often invited to speak in Washington, D.C., at events to provide the Japanese perspective on global events affecting our country.
In my consultancy, I try to help both sides understand each other. Most global economists and politicians have a very hard time understanding the Japanese mindset when it comes to politics and the economy. For example, sometimes the U.S. feels very connected to Japan and believes it can predict or count on Japan's next move. But then our prime minister reaches out to Russia in a way that makes the U.S. nervous.
I don't believe Japan's economics and politics will follow a predictable path going forward. We can be contrarian in our actions. I do believe the Japanese government is working hard to cooperate with the United States in trying to stabilize the Asia region.
Julia Guth: Another concept that is hard for Americans to understand is the "samurai spirit." You are a descendant of a famous samurai, and samurai is your lifestyle. What does that mean?
Toshio Masuda: I like to think of samurai like bamboo. You know, bamboo is beautiful. And when you cut it, it separates very cleanly. So beauty, clarity and clean living are important concepts for the samurai lifestyle. Another is self-sacrifice.
I'm a descendent of one of 47 masterless samurai, or ronin. They are famous for sacrificing themselves to get justice. They committed suicide to stop the corrupt way of government and to create a better way of management for the people. They wanted to end the corrupt shogun center of central government. Today, we are trying to promote good governance, with a clear and clean approach to living. This is a disciplined way of life that takes effort every second, every minute, every hour, every day. It takes work. Another aspect of samurai is our very strong work ethic. At the same time, we don't complain or like to show that we work hard. That is not considered polite.
Julia Guth: Well, that is very different from the American way. We work hard, but love to complain about it and how busy or tired or unfulfilled we are.
Looking ahead to something positive - I was thinking that if I were ever going to attend an Olympics, the upcoming summer events in Japan would be ideal.
Toshio Masuda: Yes, the new governor of Tokyo is Mrs. Yuriko Koike. I am sure she's going to prepare quite efficiently and nicely for the coming Olympics. There will be public opposition to the spending that will be proposed, and she will need the support of the people. But she is very popular in Tokyo and will get it done. I expect the Tokyo Olympics will be very successful.
Julia Guth: Mr. Toshio Masuda, thank you and your wife, Mariko, very much for this interview. You've attended many of our events since we first met at The Oxford Club's Investment U Conference in 2013. I look forward to having you join us again soon. We are honored to have you both as Chairman's Circle Members.
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