Japan's Ruling Party Is Sacked As Expected. Prime Minister Resigns His Leadership Post. World Dynamics Continue To Change.

Well, this past weekend's elections in Japan turned out pretty much as expected. There is seldom much discussion of Japan in the mainstream media as it pertains to the global economy. To many Japan appears as an inwardly-focused society. A common reason for this perspective is likely many unique social dynamics which includes learning by observation. Comparatively, American politicians seemingly can't remark often enough on how every other country should run its affairs. We often see this dynamic at work in business where Japanese firms tend to observe and study a market and its participants before entering it. Then often come to dominate both. This perceived inward-focus has the potential to change very dramatically as volatility in Asia increases. A substantial example as it pertains to the rest of the world is the call from some Japanese politicians to amend its constitution to allow greater self-determination and sovereignty of its own defense.

As the U.S.'s ability to maintain what has become a military empire is brought back to reality, the world is going to be a much less harmonious place than the happy pontifications of clueless globalists. This dynamic could become an impetus for rhetoric to become action regarding changes to Japan's constitution. In other words, whether anyone agrees with the policy or not, the U.S. military hegemony has kept the lid on kooks, thugs, goons and other unsavory types around the world. Without hegemony these people or groups on nearly every continent would be the source of greater volatility. It is only fear of the United States acting as a counterweight which often keeps them in check. That means a potential major uptick in future volatility as said forces become emboldened with a lesser United States presence. And that means other nations may have to take greater responsibility for their own defense. Add in a relatively lengthy period of global stability and globalization of wealth, which did wonders for arms sales from Russia, the U.S. and Europe, and all of those kooks, thugs, goons and other unsavory types are now armed to the hilt to cause plenty of future volatility. (Might you imagine how much more dominant the Japanese economy would become should they resume responsibility for their own defense and possibly enter the global arms trade? I can assure you the power structure in Japan understands this dynamic all too well. And economics likely is a key driver behind talk of resuming responsibility for their own defense.)

Within a day of Japan's election results we already have many financial wizards telling us what this means for Japan's economy and financial markets. Sell American equities and buy Japanese equities. Sell Japanese bonds and buy Japanese stocks. Yadi, yadi, yada. More comedy from the Wall Street illuminati. I discount almost all commentary on Japan given the lack of depth or understanding of its society or its economy. Economic gibberish from the financial and economics community has defied relevance in Japan. Frankly, because it defies relevance period - something American are now learning first hand. Voodoo doesn't work. And neither does voodoo economics.

On that note, of voodoo that is, nothing could be more of a comedy as it pertains to this post than the bamboozling of American media, Wall Street and large businesses with their near universal pontificating that it was only a matter of time until China came to dominate Asia and eventually inherits the mantle of the world's largest economy. I hear this almost daily from some source. Be it someone speculating on a future world where China threatens America's dominance or some remarks about future economic competition or what have you. In fact Goldman Sachs was pushing this gut-busting joke again yesterday. Comparatively, when the bullish frenzy over China was at its peak, we wrote Japan would remain the dominant economy in Asia for the foreseeable future. That statement may still not be apparent to the enlightened ones, but it will be. All in due time.

Story here.