I'm Down! Campbell's Soup Japan Inflation/Deflation/Depression Index Pt. 2

Is Japan in a deflationary depression? Is Japan headed for massive inflation due to the easy money policies of the Japanese government and Bank of Japan? Have the policies of these two entities set-up Japan for hyper-inflation or a yen crash?

THE BEATLES - I'M DOWN

These are the questions that so many ask, myself included, yet no one seems to know the answers.

So I set up my own Campbell's Soup Japan Inflation/Deflation/Depression Index. This is installment part two. You can read part one here.


What in tarnation is going on here? The price of Campbell's Soup and the price of eggs is crashing.

Here are cans of Campbell's Soup on Feb. 18, 2011 

at about ¥169 a can (about $2.03 USD)

What's this?! Campbell's Soup on March 2, 2011 at ¥134

a can (that's about $1.61 can)

Well if that doesn't ring your bell, how about this egg price? 

Eggs at ¥139 on Feb. 18, 2011 (about $1.68 USD)

The very same eggs for ¥129 on March 2, 2011. (about $1.57 USD)

This shows some real radical drops in price for food, but gasoline has gone from ¥128 yen per liter in this time to ¥138 yen per liter so you be the judge.

Is Japan hitting deflation or inflation?

Other readers in Japan, please comment on your experiences (also tell us where the best places to buy stuff is!)

These prices suggest deflation. Which makes me happy. Who isn't happy when prices go down? 

Campbell's Soup Japan Inflation/Deflation/Depression Index

Is Japan headed for a Yen crash? Is Japan in a deflationary depression? Due to massive easy money policies and Yen printing, has the Japanese government set-up Japan for hyper-inflation?

These are the questions that so many ask, myself included, yet no one seems to know the answers.

There are many gauges of prices that the government uses to measure inflation. But the government often changes these metrics to fit their political purposes.

It looks like Japan has been in deflation over these past 15 years, but if we only looked at gasoline prices, you wouldn't think so. A liter of regular gasoline was about ¥92 yen in 1999. Today it is ¥136 yen per liter.

Many things have gone up in price. Some things have gone down in price. So, here is my "Depression food" index. I'll shall call it, from now on, the Campbell's Soup Japan Inflation/Deflation/Depression Index. I will go to OK Store in Yoga and, photograph these cans everytime I see them and date the photo. From here, we can use this one item to judge:

Is Japan really as scr*wed as people think we are?

Campbell's Soup Japan Inflation/Deflation/Depression Index

Feb. 18, 2011 about ¥169 a can (about $2.03 USD)

Rules: All items will be priced in Japanese Yen. I will give you the dollar price also, but that doesn't really count for my Campbell's Soup Japan Inflation/Deflation/Depression Index as Japanese people will be paying in yen. I also do not want that to be prominent as this chart does not take into effect the dollar/yen rate as that situation is too fluid. 

This is merely a representation of what the average Japanese housewife sees when she buys this product. I may add milk and eggs in the next installment. I will not add rice as the price of rice is controlled by the government.

This page will be updated and posted every time there is a price change to Campbell's Soup or my other target items. 

Stay tuned  to this blog for more economic news and excitement about money in Japan and, er, where was I? Oh, yeah, I was.... ZZZzzzzzz.................. Snork! ........ZZZZZZzzzzzzzzzzzz.......................

Japan in Recession..... Still!

Well, the news is out, confirming what I have been saying and blogging about all along: Japan is in recession (but everyone knows that) and printing money and increasing our public debt is just digging our hole deeper and deeper. 


You know, when you are digging yourself deeper and deeper into a hole, it's probably a good idea to stop digging! (Psst! Incredible as it may sound, I did not make that quote up myself. I hear it is an old quote!... Pass it on....)  


Twenty years of increasing our national burden with more government money printing and so-called "stimulus" programs that didn't work should have been enough to show that these types of policies do not work - and they cannot work - but there are still some people who just don't get it. That history proves it doesn't work should be obvious but it seems like some people are either asleep at the wheel. Here's a good example of someone who needs a lesson in Economics 101.


He's not a particularly fast learner it seems, is he?


The Daily Bail has two good articles today on how we have slipped back into recession and - Surprise! Surprise! Surprise!....





....the Japanese government wonks want to print more money in order to fix the economy and get us back on track again! (Gee, haven't they fixed us enough over these last 20 years?) 


But hey! Don't worry! Recovery is coming up around the bend!





The Daily Bail article states:


The Japanese economy shrank an annualized 1.1% in Q4 of 2010.  Meanwhile, food and commodity prices continue to rise, giving Japan the worst of both worlds in having to contend with both price inflation in food and energy and deflation in asset prices.  You may be wondering what happened to "Welcome to The Recovery"?  Not to worry -- when the numbers don't add up, you can expect a flurry of metaphors from government officials and economists, both of whom have advocated spending and printing money in prodigious amounts.  Masaaki Shirakawa of the Japanese central bank said the 4th quarter dip was just a momentary "pause" on the path to recovery.  Taro Saito of Nippon Life said the economy was just undergoing a brief "lull" -- soon we'll "hit bottom," "gain traction," etc.  This is just a little "blip," anyway, recovery is just around the corner.  Of course, recovery is always just around the corner.  Or gosh, maybe it's just a "soft patch." 


The Japanese government has been telling us for two decades that "recovery is right around the corner." Too bad we never turn the corner. More good news after this 20 years of monetary easing is 15.7% of the Japanese public being under the poverty line...


The article continues and spells out how Japan is showing the USA what's in store if they keep mimicking Japan:


Japan has been doing this song and dance for over twenty years -- ever since their own stock market and real estate bubbles burst back in 1989-90.  
Unfortunately, our policy response here in the US, despite protestations to the contrary, is mimicking Japan's.  We've bailed out our banks and large corporations, we continue to allow them to lie about asset values.  There is virtually no new credit growth outside of the government, and zero interest rates have done nothing but punish savers in favor of the large banks.


I mean, seriously, when you have a great policy like that that has shown these great results over these last twenty years, why change it? If you are the USA, why not copy it, right?

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2011: The Year Japan Defaults or Gets High Inflation?

From Bloomberg:

Japan’s top government spokesman said the country’s fiscal situation is “approaching the edge of a cliff,” underscoring Prime Minister Naoto Kan’s call for a national debate on raising the 5 percent sales tax.

Kan is “expressing his deep sense of crisis and resolution about the sustainability of social security as the aging population increases under a low birth rate,” Chief Cabinet Secretary Yoshito Sengoku told reporters today in Tokyo. “The supporting fiscal conditions don’t allow for any delays, it’s finally approaching the edge of a cliff.”

The prime minister last night said in an interview with TV Asahi that he would “stake my political life” on addressing Japan’s rising social welfare costs and increasing public debt. The day before he said “now is the time” to face these problems.

No. I think now is the time to make a vote of "no confidence" and hold an election vote out these clowns. You never hear about government cutting expenditures, only more taxes. These people have to go. They are too beholden to vested interests.

My friend Mish Shedlock has an excellent commentary about this mess here.

Marketing Japan: Does Japan Suffer From Deflation? No.

By Mike in Tokyo Rogers

You know the old saying, "When your neighbor loses his job, it's a recession. When you lose your job, it's a depression."

I've been asked by a lot of people the question, "Is Japan suffering from Deflation?" Now, I'm not an economist and, in this particular blog commentary, I am not concerned here with money exchange rates, I am only concerned with the prices I pay for common goods out of my pocket.

I have been self-employed and working basically out of my home office since 1992. I do most of the grocery shopping so my data is not corrupted with tricks that government economists use to further their aims. Mine is decided using just a few things that people need for everyday living. From this, I can honestly say that my gut feeling, and from what I have seen as a common consumer, is that we are not suffering from deflation in Japan.

How do I come to these conclusions?

Let me use two specific examples that I often cite: Gasoline and the price of canned food. I am aware of what these prices were exactly in the dates I mention because, as a self-employed person, we keep strict records on all expenses at our home and office.

Gasoline and the price of fuel has something to do with everything we touch. It is important for growing food, industry and daily life. You name it, fuel has something to do with it and the price of all goods we need to live in today's world.  In the early 1990's, just as the Japanese economic bubble was bursting, the price of regular gasoline per liter was about ¥95 yen per liter. Today, August 15, 2010, it is ¥124 yen per liter. That's about a 31% price increase. That's from Shell Gasoline station where I always buy.

Canned Corn. My son loves canned corn. Why? I don't know but he loves it so much that he eats it straight out of the can (heck, what parent is not happy that their kid will eat vegetables? - he eats lots of raw veggies too!) OK is the big discount grocery store here in Japan.  I buy it by the case from OK store  in January of 2008, a can of corn cost ¥85 yen per can. Today, August, 15, 2010, it costs ¥119 per can. That's a 40% increase in price.

This increase in the price of canned foods is pretty much straight across the board.

Japanese CPI. Don't forget that, during this same period, the Nikkei 225

dropped 78% of its value.  

From what I read in the newspapers and online, deflation is dropping house and land prices in Japan... I doubt it. I think it is not deflation, I think we are still in a correction from the bad government monitary policies of the 1980's that caused the bubble, then the bad policies that still are in effect to try to prop up that bubble.

Here is an article from a guy who agrees with me about the no deflation part:

There's a lot of unfounded talk going around these days about how deflation has killed the Japanese economy...(snip)...This chart shows the year over year growth in Japan's Nationwide CPI. Since Mar. 1993, Japan's price level hasn't budged: inflation has netted out to zero. That's over 17 years of price stability. From the very peak in Japan's inflation, which was in late 1998, Japan has "suffered" an average annual decline (i.e., deflation) in its price level of 0.4%. It's hard to see how this might be the killer deflation scourge that it's made out to be.

This is not deflation in Japan, this is a painfully long correction. It will continue this way as long as the government doesn't change policies.

When I go to the store and see eggs, bread, milk, cheese, vegetables, fish and meat dropping in price and then, on my way home, I see gasoline at under ¥100 yen per liter, then I might agree with the deflationists...

This is not deflation, this is just a situation where prices are not zooming up like people had become accustomed too.

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Keywords: Deflation, CPI, bubble, Mike Rogers, Marketing Japan, Mike in Tokyo Rogers, recession, depression