Reference News Network, December 30 report: Japan's "Tokyo Shimbun" published an editorial titled "Protecting the Nation from 'Attack'?" on December 28, the content is compiled as follows:

The head of the government bond department at Japan's Ministry of Finance once admitted, "In fact, we have been attacked many times. Because we conducted defense behind the scenes, there has been no serious loss."

The term "attack" here refers to the behavior of speculative forces selling specific currencies or government bonds in large quantities in foreign exchange and financial markets. When there is a significant gap between the currency value that a country tries to maintain and market valuations, the likelihood of such attacks increases.

It can be seen that the finance officials want to express that although Japan has repeatedly suffered from short-selling attacks on the Japanese yen, the Ministry of Finance has always protected the yen through direct intervention or through financial institutions for foreign exchange intervention.

If a country is attacked by speculative forces and cannot defend its own currency, it will fall into a tragic situation.

A sharp decline in a country's currency may lead to massive unemployment and corporate bankruptcies, seriously affecting the lives of the domestic population.

"Japan will not face this situation." Many politicians and economic experts in Japan confidently assert this.

The Modern Monetary Theory is the theoretical basis supporting this assertion. It was proposed by Professor Stephanie Kelton of the State University of New York.

In simple terms, its content roughly is: For a country that issues its own currency and maintains a floating exchange rate system, even if the country has debt, it can simply print more money to repay it, and also use fiscal spending to boost the economy. The theory emphasizes that as long as the scale of foreign debt is not too large, the fiscal system will not collapse.

Japanese politicians believe that their country meets the above conditions. They say that despite facing a huge fiscal deficit, most of the buyers of government bonds are domestic institutions such as the Bank of Japan, and compared to other countries, their foreign debt is not particularly high.

Japan has long implemented large-scale monetary easing policies, injecting a large amount of liquidity into the market, while also repaying government bonds, which is consistent with the theory. Although the scale of the fiscal deficit exceeds twice the GDP, if public assets such as land held by the government are deducted, Japan's fiscal condition may not be particularly bad compared to other developed countries.

Based on these conditions, proponents of active fiscal policy argue, "Debt can be repaid by printing money."

The economic policy of the second Abe Shinzo government, "Abenomics," in fact embodies the Modern Monetary Theory.

Abenomics initially boosted stock prices and stabilized employment. At that time, the government's scenario was that the large amount of funds injected into the market would trigger new investments, corporate profits would increase, and wages would also rise.

However, in reality, most of the funds eventually turned into corporate internal reserves, failing to effectively be used for investment and raise wages. Although stock prices rose, only the wealthy and large corporations both domestically and internationally benefited from it.

Surprisingly, the Takahashi Haruna government seems to intend to implement an economic policy identical to Abenomics. Why does the Tokyo government want to continue a policy that has not been very effective? Its intention is not clear. People have even begun to doubt, "The Prime Minister has not seriously studied the economy."

Financial markets have already begun to show unsettling trends. In addition to the depreciation of the yen, the rising trend of long-term interest rates, which means the decline in the value of government bonds, has not stopped.

Now investors are selling Japanese currency and government bonds, a situation reminiscent of the "attack" mentioned by that finance official.

Speculators drift around like rain clouds in search of potentially profitable markets. Once they think "there is profit here," they launch attacks like sudden downpours, selling the currency in large quantities.

In this crisis situation, statements such as "Japan's fiscal condition is not so bad after deducting government assets" become untenable. As long as more and more people believe that the Tokyo government is passive about reducing the fiscal deficit, it is enough to become a driver for speculation.

A "spending-style fiscal policy" without financial support is nothing more than a fictional profit story. As a news media, our responsibility is to clarify the facts and continuously sound the alarm. (Translated by Ma Xiaoyun)

On December 22, electronic quotation boards on the streets of Tokyo showed the 10-year government bond and the exchange rate between the US dollar and the Japanese yen. (AFP)

Original article: toutiao.com/article/7589462555169407494/

Statement: This article represents the views of the author.