What will cost-push inflation bring to Japan?

 Once again, the principle of GDP three-sided equivalence is "production = expenditure (demand) = income". No one can deny this principle.



In other words, if the price goes up due to demand pull, the income will definitely go up.



And deflation is a situation where aggregate demand is insufficient for supply capacity. If supply capacity> aggregate demand continues, prices will fall.



Furthermore, the sales (production) quantity will decrease during the deflationary period. as a result,

"Prices go down, but income goes down even more."

As a result, real wages will fall.



And, as the poverty of the people continued, cost-push inflation started due to the shortage of supply capacity of foreign goods and services and the war between Russia and Ukraine triggered by the corona disaster.

 


Unlike demand-pull inflation, cost-push inflation does not increase national income. Or on the contrary, reduce it.



Income increase due to "increased payments" in cost-push inflation is simply going overseas. An increase in imports will reduce Japan's GDP (= production = demand = income). (That's the statistics)



"Seven-Eleven has about 60 lunch boxes and noodles, and the price has been increased by up to 15% from the beginning of April. His FamilyMart also

Seven-Eleven Japan announced on the 1st that it will raise the price of lunch boxes and noodles by up to 15% in total from the beginning of April. FamilyMart will also raise the price of 10 products such as croquettes by up to 12% from the 5th. The reason is the rise in raw material and container prices and distribution costs. (Omitted) ”


"Spring price increases Oil, eggs, wheat, tires ... The international situation is uncertain, and the wave of price increases will continue for the time being [Fukui]

From April, the prices of our personal items such as groceries and daily necessities will increase. The direct cause is the rise in raw material costs and transportation costs, but the background is a combination of global factors such as the infection of the new corona, Russia's invasion of Ukraine, soaring crude oil prices, and unseasonable weather. We covered the impact of food price increases in Fukui Prefecture. (Omitted) ”


"May electricity rate, company-wide increase, fuel soaring and renewable energy levy increase

10 major electric power companies announced the price for May based on the fuel cost adjustment system (fuel adjustment) that reflects the fuel price in the electricity price. In addition to the prices of liquefied natural gas (LNG) and coal, which are fuels for power generation, the levy to be added to the price for the spread of renewable energy will increase, and the price will increase company-wide. (Omitted) ”



In particular, low-income earners with high Engel's coefficient are directly hit.

 


Ironically, I'm not despairing in the medium to long term,

1. 1. The poverty of the poor is getting closer than ever, and politics begins to move.

2. 2. An environment will be created in which Japanese people become accustomed to "price increases" and accept demand-pull inflation.

3. 3. Due to the decline in real wages and the expansion of poverty, foreign workers will not come in, and business owners will be forced to "improve productivity through investment".

That is because it is expected.



Of course, it will be terrible in the short term. For the time being, the government should implement "gasoline tax abolition (at least unfreezing of trigger clause)", "restart of nuclear power plants", and "compensation for farmers' producer prices".



The beginning is from now on

"I can't pay for electricity because I don't have money."

"I can't feed my kids because I don't have the money."

It is poverty. Of course, I know it has already started, but it will expand at once.

 


If politicians look away from this reality, Japan will be transformed into a "nation infested with jokers" at once.

Comments

Post a Comment

Popular posts from this blog

"Tax increase" called cost-push inflation

 According to the principle of GDP three-sided equivalence (production = expenditure = income), when the production (* value-added production) price rises, the income also increases.   The problem is that if the goods and services we spend are imported from abroad, the "domestic income" will not increase. In fact, imports are a deduction for GDP (Gross Domestic Product). Imports increase the income of foreign producers. This means that even if the domestic inflation rate rises due to the influence of import prices, the "income of domestic producers" will not be affected. Of course, in ordinary countries, the income of domestic producers is also rising, so there is no problem even if import prices rise a little.   On the other hand, in Japan, instead of increasing income, it is "decreasing", and cost-push inflation, in which only "income of foreign producers" rises, has begun. According to the principle of GDP three-sided equivalence (production =
Read more

To have the strongest head and eyes that will not be overwhelmed by difficult problems

 The Treasury's tight budget has led to continued deflation in Japan and disrupted the military balance in East Asia on the other side of China's growing GDP and military spending. At the same time, by "stucking" spending in Japan, the fields of education and science and technology will continue to decline. The treasury bureaucrats are ridiculously sinful people. "Crushing elementary schools because we don't have the financial resources ... The unknown reality of" school consolidation "progressing in rural areas" A strange situation "is happening. (Omitted) The logic of "cost" brought to the educational field The author takes up the following two points as what Mr. Edahiro did in the field of local education administration, especially in the consolidation of schools. First, the logic of finance and cost was brought head-on to the field of educational administration. Second, the logic of "community and school are different&qu
Read more

Yen depreciation temporarily dropped to the 123 yen level for the first time in 6 years and 3 months at the BOJ's limit operation

 In the foreign exchange market on the 28th, the yen depreciated against the dollar, and at one point, it hit the 123 yen level for the first time in 6 years and 3 months since December 2015. In the morning of this day, the Bank of Japan held a "limit price operation" to buy unlimited government bonds by designating a specific yield in order to curb the rise in long-term interest rates. It seems that the movement to sell yen and buy dollars has spread. The limit price operation has been held for the first time in about a month and a half since February 14. The yield on Japanese 10-year government bonds also rose to 0.24% in response to the rise in long-term interest rates in the United States, which was triggered by a rate hike on the 16th. As the BOJ approached the upper limit of about 0.25%, the BOJ set the yield on 10-year government bonds at 0.25% and notified the market that it would buy unlimitedly. Government bonds are in a relationship where the price goes down as the
Read more