Showing posts with label Global Economy. Show all posts
Showing posts with label Global Economy. Show all posts

Wednesday, August 28, 2019

“Shadow Statistics”: US Government’s Fudging the Numbers on Unemployment, GDP and Inflation



Global Research, August 28, 2019

John Williams has worked as a consulting economist since getting his BA and MA from Dartmouth college in New Hampshire in 1972. He now lives in California – these paragraphs are from his biography:
One of my early clients was a large manufacturer of commercial airplanes, who had developed an econometric model for predicting revenue passenger miles. The level of revenue passenger miles was their primary sales forecasting tool, and the model was heavily dependent on the GNP (now called the GDP) as reported by the Department of Commerce.  Suddenly, their model stopped working, and they asked me if I could fix it. I realized the GNP numbers were faulty, corrected them for my client…and the model worked again, at least for a while, until GNP methodological changes eventually made the underlying data worthless.
For a number of years I conducted surveys among business economists as to the quality of government statistics (the vast majority thought it was pretty bad), and my results led to front page stories in 1989 in the New York Times and Investors Daily (now Investors Business Daily). 
In 2004 he started Shadow Statistics and runs a blog with updates on what he calculates to be the real U.S. government statistics, you can subscribe for $175 a year. The government keeps statistics on many things; Williams focuses on only a few; unemployment, Gross Domestic Product, inflation, the value of the dollar and the money supply.
You may ask why the government would fudge the numbers. Williams found that between 1997 and 1999 the government understated inflation and as a result inflation indexed payments for social security didn’t escalate as they should have and the government saved millions. The effect is the same in many contracts where payments are inflation indexed; between retired people and pension funds, between corporations and labour unions. Lower inflation rates, real or fictitious, save many corporations money.
On his web site you can check what he says are the correct figures today; unemployment in the United States, which the government says is under 5%, he says is about 22%.  One reason for the big difference is that since the ‘60’s the government no longer counts as unemployed those who could not find work.
Inflation which the government says is about 2% is slightly over 5%. That seems right to me because the Shadow Statistics rate seems closer to what I’ve experienced.
It’s not just in the United States where numbers are being fudged. When I was writing my book, a friend in England sent a note saying that it was not just in the United States where government statistics were being fudged. “you can take if from me” he wrote “that inflation in the UK was at least twice what the Government was reporting.” He knew that because he had been keeping detailed records on their family spending.
Back in America economist Paul Craig Roberts has noted:
As I have reported on many occasions, John Williams of shadowstats.com has concluded that changes in the way that the government approaches the measurement of inflation has, in effect, defined inflation away.
Formerly, if a price of an item in an inflation measure rose, the inflation rate would rise by the price times the weight of the item in the index. Today, if a price of an item in an inflation measure rises, that item is removed from the index, and a lower cost item substituted in its place.
A second way that government has contrived in order to under-measure inflation is to declare price rises “quality improvements” and not count the higher price as inflation.
Using these methods, an 8% rate of inflation can, for example, be reduced to a 2% inflation rate.
And as Peter Kiekmeyer, a business writer with Sprott Money writes:
The sharply-dressed statisticians at the U.S. Bureau of Labour Statistics, the Bureau of Economic Analysis and Statistics Canada for their part talk a good game. However, Williams is asking questions that none have been able to convincingly refute.
Until that happens, we’ll regard this rumpled, amiable, Californian … as America’s most important statistician.
Williams’ current forecast for the US economy is not good. His data of United States Gross Domestic Product which officially has been reported at about 2% for the past many months he reports as being negative for several years now. A recession is defined as two quarters of reduction in the gross national product thus according to Shadow Stats, the US is in recession and has been for many months now. His economic forecast as of Aug 15th is:
The ShadowStats broad outlook in the weeks and months ahead remains for: (1) a rapidly intensifying U.S. economic downturn, reflected in (2) mounting selling pressure on the U.S. dollar, (3) flight to safety in precious metals, with upside pressures on gold and silver prices, and (4) increasingly high risk of extraordinarily heavy stock-market selling.
He’s not the only one in the market today raising warnings so be wary.
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https://www.globalresearch.ca/shadow-statistics-us-governments-fudging-the-numbers-on-unemployment-gdp-and-inflation/5687366

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Monday, August 26, 2019

A Critical Threshold Has Just Been Crossed, and Things Will Never be the Same Again…


Global Research, August 26, 2019



Just when things seemed to be settling down a little bit, our conflict with China has suddenly escalated to a dangerous new phase.  This is not simply just a “trade war” any longer, and our relationship with China will never be the same again.  As you will see below, President Trump just referred to Chinese President Xi Jinping as our “enemy”, and this is something that the Chinese are going to take extremely seriously. 
In China, the national leader is a representation of the government as a whole, and the government as a whole is a representation of the entire county.  So to the Chinese people, what Trump just said will be interpreted as “the United States and China are now enemies”.  Of course for Trump everything would be forgiven tomorrow if the Chinese totally caved in to his demands and started saying all sorts of nice things about him, but for the Chinese what has transpired in recent months will be remembered for generations. 
President Trump has insulted their national honor over and over again, and that sort of thing may not mean much to us here in the western world anymore, but over in China their sense of honor is central to who they are as a people.  After everything that has already been said and done, there will be no going back, and we are now facing a future in which the United States and China will be very bitter enemies.
In response to previously announced U.S. tariffs, China stunned global markets when it announced a new wave of tariffs on U.S. goods early on Friday…
The trade war between the U.S. and China escalated further Friday as Beijing announced a new set of tariffs on American products, sending the stock market plunging.
The China State Council announced it would impose tariffs ranging from 5% to 10% on an additional $75 billion in U.S. goods, according to state media outlet Global Times.
After Trump learned of this, he hit the ceiling, and he immediately went on a Twitter rant in which he pledged to hit Chinese goods with even higher tariffs…
For many years China (and many other countries) has been taking advantage of the United States on Trade, Intellectual Property Theft, and much more.
Our Country has been losing HUNDREDS OF BILLIONS OF DOLLARS a year to China, with no end in sight.
Sadly, past Administrations have allowed China to get so far ahead of Fair and Balanced Trade that it has become a great burden to the American Taxpayer.
As President, I can no longer allow this to happen! In the spirit of achieving Fair Trade, we must Balance this very unfair Trading Relationship.
China should not have put new Tariffs on 75 BILLION DOLLARS of United States product (politically motivated!).
Starting on October 1st, the 250 BILLION DOLLARS of goods and products from China, currently being taxed at 25%, will be taxed at 30%.
Additionally, the remaining 300 BILLION DOLLARS of goods and products from China, that was being taxed from September 1st at 10%, will now be taxed at 15%. Thank you for your attention to this matter!
In addition, Trump “hereby ordered” U.S. corporations “to immediately start looking for an alternative to China”…
Trump then tweeted that American companies “are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.” He did not immediately detail the authority he thought he could use to compel firms to leave China.
When I first saw that I could hardly believe what I was seeing, and you may have had the same reaction.
Can Trump actually do that?
Well, no, the truth is that he can’t.
He can certainly encourage U.S. businesses to leave China, but as CNN has pointed out, he doesn’t have the authority to unilaterally order all of our companies to leave an entire country…
Here’s the thing: Donald Trump can’t order American business to do anything. There’s a reason the business world is known as the “private sector” — because it’s not owned or controlled by the government (aka the “public sector.”) We don’t have state-run industry (or media). The President of the United States can’t “order” privately held business to do, well, much of anything.
And on top of everything else, President Trump posted another tweet in which he called Chinese President Xi Jinping our “enemy”.  The following comes directly from Trump’s Twitter account…
As usual, the Fed did NOTHING! It is incredible that they can “speak” without knowing or asking what I am doing, which will be announced shortly. We have a very strong dollar and a very weak Fed. I will work “brilliantly” with both, and the U.S. will do great…
….My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?
Any hopes for a trade deal with China during the Trump administration were already dead, but this has put even more nails in the coffin.
When the outlook for the U.S. economy was brighter, getting a trade deal with China done was not so critical for Trump, but now things have dramatically changed.
At this point, even the White House’s own internal forecasts are showing “that the economy could slow markedly over the next year”…
Top White House advisers notified President Trump earlier this month that some internal forecasts showed that the economy could slow markedly over the next year, stopping short of a recession but complicating his path to reelection in 2020.
The private forecast, one of several delivered to Trump and described by three people familiar with the briefing, contrasts sharply with the triumphant rhetoric the president and his surrogates have repeatedly used to describe the economy.
Things just continue to get even bleaker.  U.S. manufacturing just contracted for the very first time since 2009, and the financial markets are starting to figure out that there aren’t any promising solutions on the horizon.
On Friday, the trade war turmoil greatly spooked investors and the Dow ended the day down more than 600 points…
The Dow Jones Industrial Average closed 623.34 points lower, or 2.4% at 25,628.90. The S&P 500 slid 2.6% to close at 2,847.11. The Nasdaq Composite dropped 3% to end the day at 7,751.77. The losses brought the Dow’s decline for August to more than 4%.
The major indexes also posted weekly losses for the fourth straight time. The Dow dropped about 1% this week while the S&P 500 pulled back 1.4%. The Nasdaq lost 1.8%.
As I noted at the end of last month, the stock market started to decline in July, and now it has fallen every single week here in August.  Just like in “The Beginning Of The End”, we are potentially facing a scenario in which we experience great economic and financial turmoil during the second half of the year.
Over and over again, I have kept warning my readers that our relations with China were going to get progressively worse.  We have been expecting this for a long time, but most Americans still do not grasp the implications of this crisis.
This conflict between the United States and China is going to change everything.  An extraordinary amount of pain is heading our way, and our society is completely and utterly unprepared to handle it.
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Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News.
Featured image is from Stansberry Churchouse


https://www.globalresearch.ca/critical-threshold-been-crossed-things-will-never-be-same-again/5687216


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Sunday, August 25, 2019

US Sanctions: A Weapon of War by Other Means








The US under both extremist wings of its war party imposes illegal sanctions on nations targeted for regime change — part of its war on these countries by other means.
European and most other nations go along even when harming their own interests — instead of breaking from the US aim to achieve dominion over planet earth, its resources and populations, endless wars and other hostile actions its favored strategies.
Trump escalated hot wars he inherited and is waging them by other means on China, Russia, Venezuela and Iran.
The US is in decline, exacerbated by Trump’s wrongheaded policies. Beijing responded to his latest tariff hike, calling it “barbaric,” warning it’ll fight back “until the end” — with plenty of muscle and will to stay the course.
The more Trump pushes, the stronger Beijing will push back. On Saturday, China’s Global Times called trade war between both countries “a test of endurance,” adding:
US bullying shows “arrogance and narcissism…(It) must be prepared for counterfire.”
Nobody wins trade wars. When Trump boasts of benefits to the US he shows profound economic and financial ignorance. “(T)he entire world laughs at (his) overt lie.”
Other nations aren’t laughing. They’re greatly concerned about the negative effects to their economies.
An astonishing $17 trillion in European and Japanese interest rates, a sign of economic weakness, things likely to worsen ahead, are exacerbated by Trump’s wrongheaded policies — driving the US and global economy toward recession.
The greater his trade war, the worse things are likely to get. David Stockman call the US national debt a “ticking time bomb.”
It’s growing at over a trillion dollars annually, exceeding GDP. Trump reportedly is considering big cuts in Medicare and Social Security to offset it if elected to a second term — reason enough to want him defeated.
If he’s reelected and Republicans control both houses, it’s likely coming as a way to help pay for the December 20, 1987 GOP tax cut swindle — benefitting corporate interests and high net-worth individuals at the expense of ordinary Americans.
According to the National Committee to Preserve Social Security and Medicare, the 2017 tax cut heist “add over $1.5 trillion in debt.”
“Now we know how they’ll pay for those tax cuts, by cutting Social Security and Medicare” — what was planned all along.
According to the Washington Post, Trump “instructed aides to prepare for sweeping budget cuts if he wins a second term in the White House” — meaning social programs, while increasing military and related spending.
Reportedly he wants $845 billion in Medicare cuts and another $25 billion from Social Security. Hardliners in Washington deplore these programs and other social ones, wanting them eliminated altogether.
Iran is a key Trump regime geopolitical focus, its hostile agenda risking war on the country, an act of madness if launched given Tehran’s ability to hit back hard.
Last week, Pompeo falsely claimed US actions against Iran aim “to bring stability and prosperity to the Middle East.” What’s going on is greatly destabilizing the region more than already.
He warned other nations against letting Iran’s Adrian Dayra 1 dock in their port, saying they’ll jeopardize relations with the US, adding:
“(A)nyone who supports it, anyone who allows a ship to dock is at risk of receiving sanctions from the United States.”
He consistently and repeated turns truth on its head about the Islamic Republic, falsely accusing the country of “engag(ing) in malign and destabilizing activities” — a US, NATO, Israeli specialty, not how Iran operates anywhere.
His State Department said the following:
“The shipping sector is on notice that we will aggressively enforce US sanctions. All parties in the shipping sector should conduct appropriate due diligence to ensure that they are not doing business with nor facilitating business for, directly or indirectly, sanctioned parties or with sanctioned (Iranian) cargo.”
Whatever the Adrian Dayra 1’s possible original destination, the MaritimeTraffic/ship trafficking website indicated it’s heading for Mersin, Turkey, estimated to arrive on August 31.
Reportedly the port doesn’t have enough water depth to accommodate a super-tanker like the Adrian Dayra 1.
If its destination is correct and Turkey is willing to accept its cargo, perhaps offloading it onto one or more smaller vessels is planned.
Tehran and Ankara have good relations. Last year, Turkey vowed to keep buying Iranian oil, its Foreign Minister Cavusoglu saying:
“We buy oil from Iran and we purchase it in proper conditions.” More recently it was reported that Turkey is seeking alternative sources of supply.
In the coming days, it’ll be clear if it intends buying the Adrian Dayra 1’s cargo or not — and whether the Trump regime will impose sanctions on Turkey if it maintains normal trade relations with Tehran.
Despite heavy US pressure and threats, Turkey broke with the Trump regime by buying Russian S-400 air defense missiles, the gold standard for this purpose.
Will it act the same way in maintaining normal trade relations with Iran?
Note: Mersin, Turkey is about 125 miles northwest of Syria’s Baniyas refinery, a possible destination for the Iranian vessel’s cargo.
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Award-winning author Stephen Lendman lives in Chicago. He can be reached at lendmanstephen@sbcglobal.net. He is a Research Associate of the Centre for Research on Globalization (CRG)
His new book as editor and contributor is titled “Flashpoint in Ukraine: US Drive for Hegemony Risks WW III.”
Visit his blog site at sjlendman.blogspot.com.
Featured image is from Palácio do Planalto, Flickr


https://www.globalresearch.ca/us-sanctions-weapon-war-other-means/5687105


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Wednesday, August 21, 2019

History: US Encroachment Encouraged Japan To Support Hitler and Mussolini



Global Research, August 21, 2019

During late September 1940, Japanese representatives like Saburō Kurusu flew to Berlin where they were greeted by the ruler of Europe, Adolf Hitler. Kurusu, an experienced career diplomat from Yokohama, could not help but notice the Nazi self-assurance at a time when the Third Reich appeared impregnable.
Kurusu entered the new Reich Chancellery building, on 27 September 1940, where he signed a significant military alliance with the Nazis and Benito Mussolini’s Italy, called the Tripartite Pact. This largely forgotten agreement was designed to be directed against the Soviet Union, and also the United States, as Moscow and Washington were surely aware.
However, Japan had reason to feel aggrieved, particularly so with America, easily the world’s strongest country. US business and military power had clearly encroached into east Asian territories, vast spaces in which the Japanese had burning ambitions of their own.
At the heart of the issue was: Japan constituted a proud nation which existed for many centuries, that had never been conquered throughout its history, and she now desired to be left unhindered in deciding her destiny, whatever it may be. Japan was rapidly industrializing and, as a resource-poor nation, began enlarging in search of badly needed mineral riches.
American administrations, not satisfied with control over the Western hemisphere, wished to subordinate Japan to Washington’s far-reaching aspirations in the Pacific. This was a recurring theme behind the diplomatic offensive aimed at Tokyo during the 1930s. Yasaka Takagi, a professor of US history, asked with some reason “why there should be a Monroe Doctrine in America and an Open Door principle in Asia”?
A separate stratagem of US diplomats in the early 1940s related to Japan’s membership of the Nazi-formulated Tripartite Pact, utilized as a propaganda tool for expected hostilities with Tokyo. Paul W. Schroeder, the US historian, realized this when he wrote,
“The Tripartite Pact was revived as an issue by the American diplomats, because it was expected to be useful in selling the anticipated war with Japan to the American people”.
With the Japanese surrounded by major foes, cut adrift and isolated, their leaders looked about them for solace, and saw in Europe the tempting allure of the seemingly unbeatable Nazis. Somewhere in the background lay Mussolini’s fascists. Japanese accession to the Tripartite Pact was based on a mixture of desperation and geopolitical reasoning, rather than from devious design.
In the hours preceding Japan’s signing of the Tripartite Pact, Washington had placed a total embargo of scrap iron against Tokyo. This was a troublesome issue indeed for Japan, which relied on scrap metals for their material and monetary value.
The scenario of a junior partnership with Washington was, in addition, a most intolerable one not only for Japan’s hardline militarists, but also to much of her moderate and nationalistic elements. They did not wish to be relegated to the status of “a peaceful, contented nation of merchants subcontracting with the United States”, which is what unfolded later.
The American pacifist thinker, A. J. Muste, envisaged the coming global clash with rival states “as a conflict between two groups of powers for survival and domination”. At one side Muste saw Britain, America and “free” France which “controls some 70% of the earth’s resources” while “On the other hand stands a group of powers such as Germany, Italy, Hungary, Japan, controlling about 15% of the earth’s resources”. It was a long-standing myth that the Axis nations held dominion over much of the world during the early 1940s.
In January 1940, Washington terminated the Japanese-American commercial treaty of 1911 – which shifted Japan’s focus to plans for occupation of French Indochina, the Dutch East Indies (Indonesia) and the Philippines, all Western colonies within Tokyo’s realm of interest. The discontinuation of this treaty was a critical factor that led many Japanese moderates towards recognizing the need to support the Axis powers.
Hitler had been much reassured when welcoming Japan to the fold, but he was somewhat overestimating Japanese capacities. Tokyo’s decision in laying waste to Pearl Harbor, during late 1941, was akin to the response of a wild animal increasingly cornered. Particularly deadly to Japanese aims was that, four months prior to Pearl Harbor, the Roosevelt administration froze all Japanese assets across America, with Britain and the Dutch government-in-exile following suit – in one fell swoop, 90% of Japan’s oil imports were wiped out along with 75% of her foreign trade.
Donald J. Goodspeed, a Canadian historian who fought extensively in World War II, wrote that
“Roosevelt’s action was drastic indeed; it amounted to a declaration of economic war… By the end of the month [July 1941] Japan was forced to begin using her oil reserves, of which she had only an eighteen-month supply. Not surprisingly, therefore, when the Japanese cabinet considered the alternatives open to it, it discussed the possibility of war”.
Twelve months previously, in July 1940, Washington hit Tokyo with an embargo on aviation fuel which the latter could acquire from nowhere else – and just before the Tripartite Pact was endorsed, in an effort to ease her supply shortages, Japan invaded Northern French Indochina, a landmass situated about 1,000 miles south-west of Japanese territory.
Tokyo’s attack on the northern part of Indochina was in fact based on understandable fears. The American historian and activist Noam Chomsky wrote, concerning the Japanese position on north Indochina, that
“The goals were basically two: to block the flow of supplies to Chiang Kai-shek and to take steps towards acquisition of petroleum from the Dutch East Indies”.
China’s anti-communist figure, Chiang Kai-shek, was receiving continued backing from the West in his purportedly nationalistic desires. Chinese nationalism was a threat to Japanese imperialist claims, such as in north-east China, encompassing mineral-laden Manchuria.
Japan’s strategic outlook mostly came as a reaction to those policies enacted by the great powers, and thereafter Tokyo was hardly unique in its actions.
Chomsky outlined that,
“Japan had been opened to Western influence by a threat of force in the mid-nineteenth century, and had then undertaken a remarkably successful effort at modernization”; and subsequently that “Japan joined the other imperialist powers in the exploitation of East Asia and took over Formosa, Korea and parts of southern Manchuria. In short, by the late 1920s, Japan was what in modern political parlance is called a ‘democracy’ and was attempting to play the normal role of a great power”.
Tokyo’s attempt to play the normal role of a great power was consistently hampered by Western intrusion. In February 1922, Japan was deputized to US and British power with ratification of the Washington Naval Treaty; reinforced eight years later with the London Naval Treaty shortly after the Great Depression struck.
American and British elites were refusing to grant Japan hegemony in her own waters. The same governments insisted on complete control over their own spheres of course.
A very serious consequence of the Western stranglehold on Japan was that, from the early 1930s, it led in part to the growth of far-right factions within the Imperial Japanese Army. While the fascist forces in Tokyo strengthened their grip, Japan’s civilian hierarchy – seen as weak-willed – was beginning to wither through intimidation, assassination and public disenchantment.
Tokyo’s politicians were blamed for, among other things, acceptance of the above-mentioned naval treaties.
Japan’s political scientist Masao Maruyama noted that by 1932, “the energy of radical fascism stored up in the preparatory period now burst forth in full concentration” in Japan – aided by Japanese enlargement along with their decision to withdraw from the League of Nations in February 1933.
Throughout the 1930s, Western economic policies made an uncomfortable situation even worse for Japan. The 1932 Ottawa conference, held in the Canadian capital that summer, represented a considerable gathering of statesmen from the Commonwealth countries. A key outcome of their four-week long discussions “dealt a blow to Japanese liberalism”, as the Institute of Pacific Relations (IPR) remarked, a well known Western-based NGO.
The IPR results showed that Japan was faced “with a serious shortage of iron, steel, oil and a number of important industrial minerals” as “the greater part of the supplies of tin and rubber, not only of the Pacific area but for the whole world are, by historical accident, largely under the control of Great Britain and the Netherlands”, while with advancing years, increasingly so America.
The Ottawa agreements established a closed system of economy, in effect blocking Japan from trading with the Commonwealth. Washington’s policy of strict independence proceeded in a similar vein, preventing Tokyo from attaining a slice of the action.
Japan sought to mimic these self-serving ends with regard Manchuria, an area vital to Japanese demands. Tokyo invaded Manchuria in mid-September 1931, and the following year changed its name when creating the puppet state of Manchukuo.
Manchuria, now Manchukuo, had been under growing threat by Western-backed Chinese nationalists like Chiang Kai-shek, who desired the region’s unity to China; and Manchuria featured too on the radar of a militarized Soviet Union to the north.
As the 1930s progressed, America was recovering well from the Great Depression. The Japanese were not quite so fortunate, however.
Tokyo’s effort, to continually augment its trade in the great state of India for example, had been cut off in 1933 due to Western coercion of the Indian government; which implemented a virtually prohibitive tariff on imported cotton goods to India. Japanese traders felt most keenly the imposition of these tariffs, with Tokyo’s markets until the early 1930s steadily growing in India, the “Jewel in the Crown” of Britain’s eroding empire.
Japan’s business community tried to make inroads into the Philippines, a resource-rich island nation. Having been granted little alternative the Japanese were compelled, in October 1935, to accept an agreement curtailing shipments of cotton textiles from
Japan to the Philippines for two years; as American imports to the Philippines remained duty-free.
William W. Lockwood, an American academic specializing in Japanese economic development, noted that US supremacy relating to Philippine trade was
“attributable in large degree to the Closed Door policy of the United States, which has established American products in a preferential position. Were Japanese businessmen able to compete on equal terms, there is no doubt but that Japan’s share of the trade would advance rapidly”.
It was not allowed to. Time and again Japanese objectives were denied to them through the unfair Western-engineered financial strategies. Moreover, American tariffs on numerous Japanese items exceeded 100%.
Japanese textile manufacturing, hit especially hard by discriminatory policies, produced almost 50% of the total value of her manufactured goods, and about 66% of the value of Japan’s full exports. The Japanese textile industry also employed around 50% of her entire factory force of workers.
Japan was certainly an industrialized state – that is, in an Asian context, as she still lagged well behind her Western rivals. From 1927 until 1932, Japan held about one seventh of the energy output per capita in comparison to Germany. Japan’s pig-iron production consisted of less than half that of Luxembourg’s total. Luxembourg even produced slightly more steel than Japan.
Tokyo was not in a position to accept a situation, through which the Western powers benefited most favourably from tariff barriers in countries they dominated, such as Malaya, Indochina, India and the Philippines.
By the mid-1930s, Japan was suffering further due to a steep decline in trade with America, mainly because of Depression-era tariffs signed into law in Washington. Japan’s attempt to continue trading with neighbouring China likewise regressed sharply, as Western business strength embedded itself in major Chinese cities like Peking and Nanjing.
The pressure was mounting on Tokyo. As a consequence it was not altogether surprising when, in the summer of 1937, Japan started to enlarge at the expense of China, a huge country rich in coal, oil and gas, just what was required.
The Japanese were alarmed too by the closer relationship emerging between China and the Soviet Union, borne out on 21 August 1937 with the Sino-Soviet Non-Aggression Pact signed in Nanjing. This accord was formulated against Tokyo, with Joseph Stalin in following months providing the Chinese with $250 million in aid “to be used primarily for the purchase of Soviet weapons”. The deliveries consisted of more than 900 Soviet aircraft, 82 tanks, large quantities of machine guns, rifles, bombs, etc., along with over 1,500 Soviet military advisers and around 2,000 members of the air force.
It is little wonder that Japan was fretting about “the Bolshevization of East Asia”. Faced with growing external problems, Japanese hopes went undimmed. On 22 December 1938 Japan’s prime minister, Fumimaro Konoe, said that
China “should recognize the freedom of residence and trade on the part of Japanese subjects in the interior of China, with a view to promoting the economic interests of both peoples”.
Contrary to perceptions, Tokyo’s long-term expectations regarding China were not to swallow the country alive, or even to absorb large parts of it.
Chomsky explained of Japanese intentions towards China,
“There were to be no annexations, no indemnities. Thus a new order was to be established, which would defend China and Japan against Western imperialism, unequal treaties and extraterritoriality. Its goal was not enrichment of Japan, but rather cooperation (on Japanese terms, of course). Japan would provide capital and technical assistance; at the same time, it would succeed in freeing itself from dependence on the West for strategic raw materials”.
One of Tokyo’s aspirations, to unshackle itself from material reliance on the West, was a cornerstone of her expansionist dreams. In the end, those dreams would descend to the worst of nightmares.
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Shane Quinn obtained an honors journalism degree. He is interested in writing primarily on foreign affairs, having been inspired by authors like Noam Chomsky. He is a frequent contributor to Global Research.
Featured image: Nomura (left) and Kurusu (right) meet Hull on November 17, 1941, only three weeks before the attack on Pearl Harbor (December 7, 1941) (Source: Wikimedia Commons)



https://www.globalresearch.ca/ongoing-western-encroachment-japan-turned-her-hitler-mussolini/5686798


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