Weekly address to Ambassador Nye

"Anti-Japanese Washington Post"

Tuesday March 10th 2009

Good morning Ambassador Nye

Today's theme. "Anti-Japanese Washington Post"

Paul, my neighbor, came to dinner last night. He said “Hey, Nobu, I read in the Washington Post that Japan is in serious trouble.

Washington Post’s Foreign Correspondent, Blaine Harden, wrote that Japan is in a serious economic crisis. I advise Mr Harden not to mislead American readers regarding our economy. Based on the many false reports coming from Mr Harden, it is obvious he has not done his homework on this very serious issue.

Japan must buy oil, gas, grains, beef and raw materials from overseas. These imports cost Japan about 260 billion USD annually. Roughly, Japan consumes 200 billion dollars of oil and 60 billion dollars of imported foods a year. Japan’s export is 15% of her GDP which is relatively smaller than European nations or China which is 36% to 40 % of their GDP. However, Japan does not have natural resources such as oil and gas. Thus , Japan has to export 260 billion dollars worth of their products overseas.

If the trade balance is even, then it’s OK. Question is how long the Japanese can stay alive without exporting their products. Answer is they can survive for a very long time. In exchange for beef and grains the Japanese have invested their cash surplus in Brazil and Argentina to build giant fertilizer plants and steel mills. These projects have already been launched. As for oil and gas, Russia wants cash and technology from Japan in order to develop Sakhalin 2 Gas liquidation plants. The same day Hillary Clinton left Tokyo for Beijing in February, our Prime Minister Taro Aso flew to Sakhalin to meet with the Russian President Dmitri Medvedev to normalize relationship between our two countries.

This January Japan’s trade deficit was recorded at 9 biilon 526 million USD. If the current economic recession lasts for two more years, the trade deficit would rise to 228 billion 624 million USD.

How can Japan survive these two years of recession? Japan has 14 trillion dollars in personal savings. It is three times larger than her GDP and it is growing. This does not include 1.1 trillion dollars US treasury bonds. In 2002, Japan Central Bank estimated 26 billion 400 Million USD worth Japanese Yen in “Tansu” savings, hoarded cash saving in Japanese wooden chests and this is also growing.

Hey, Paul, can you finally understand how the Japanese are cash rich? We are not in such deep trouble as Mr.Harden wishes to think. I think Americans are facing a serious cash shortage very soon, and you gotta go where the money is. That place could be our country Japan.

I will see you all next week. Thank you.