When the war was over, The whole bank sector was virtually bankrupt.银行业几乎破产

1.Post-occupation politics美军占领后的政治体制

民主党与当初把日本引向战争的法西斯主义者（社会主义者）是同一批人。

2.The war economy system

Which was decided by the Japanese Central Bank. run monetary policy through interest rates.通过利率实施货币政策。

But the rule wasn’t done through interests, which is the price of the money,

It was done through the quantity of the money. 规则是通过货币量来完成。

3. window guidance：

The process by which a central bank imposes credit growth and allocation on commercial banks. 中央银行强制商业银行，执行信贷增长和配额的程序。

Central bank just told the banks, how much they’re gonna lend, they will have to lend in the coming quarter, and which sector of the economy to lend to.

This is credit allocation on credit control.

all loans were broken down in sectors and sub-sectors.

A large-scale borrowers should be listed by names.

this was the war economic system, adapted to the production of consumer goods. 战后经济，适应到消费品生产。

it’s not a good system for capitalists,

But for the population, it created a lot of wealth, very equal income and wealthcontribution, very high growth, and very rapidly raised quality of life.

Silly monetary policy

信贷宽松，土地价格上涨，贫富差距加大

Asset prices rising, The gap between rich and poor becomes bigger

4.History teaches us a system changes only fundamentally if there is a crisis.

Every system has groups that benefit from it, and hence has no desire to change it.

there is probably no country in the world that changes its economic social and political system in a significant way without a crisis.

It is the crisis that convinced the citizens and interest groups of the need for change.

How to achieve this?

We need a crisis, the best way to create it is to have a bubble.泡沫

Because that’s how nobody stops you.无人可挡.

5.How to create a bubble?

大幅增加贷款

The credit boom cause not only a boom in real estate, but also in the stock market.

In reality, Japan’s standout performance in the 1980s has little to do with management techniques.

instead of being used to limit and direct credit, window guidance was used to created a giant bubble.

6.Money creation and the bubble

Like all the bubbles, The Japanese bubble was simply filles by the rapid creation of new money by the bank system.

7.International capital flows国际资本流动

印钱，然后全世界投资-买买买。

When a country creates too much money, some of that money, spilts out abroad in the form of investment.

But it’s not easy for a country to just print money and then go on a shopping spree狂欢around the world.

Japan was able to do this cause the market has not devalued currency.货币没有贬值。

The value of individual currency is set by currency dealers.货币交易商

Corporate America use this hot money to buy European corporations. While the United States has the cover of the US dollar gold standard美元黄金标准. Japan’s cover was a significant trade surplus.巨大的贸易顺差

8.非国内生产总值贷款

Non-GDP loans: A loan which is not used for the production of goods or services.

an early warning indicator of building up a systematic risk of the bank system系统性风险 is a ratio of loans for non-GDP based transactions to total loans.

9.The crash 崩盘

All of a sudden, land and asset prices stopped rising.

Bankers were left almost hopeless.

As banks began to realize that the majority of the 99 trillion yen in bubble loans likely to turn soar, they became so fearful that they not only stopped lending to speculators投机者, but also restricted loans to anyone else.

迎来经济危机 recession

10.the failed bailout/rescue失败的救助

Japanese exporters日本出口商希望日元贬值，才能收支平衡break even或盈利。

The Ministry of finance the bank of Japan to sell large amounts of yen and by US dollars, The exchange rate of the yen would fall and exports would pick up.

出售日元换美元（买美国国债US treasury bonds），日元汇率下降，出口会回暖。

但bank of japan：

Sterilizing its own interventions

外汇冲销干预

There is no loan growths, there is no economic girls

There is one thing that can break through this circular argument, that’s the central bank. The job of the central bank in this situation is to print money.

The power of Central Banks

What we need now is more radical measures, there are some painful ones but they’re also painless ones.

For example the central bank should buy all the bad debts, Japan would have the strongest bank in the world.

Giving them face value for assets, which were often significantly less.

Other proposals include, measures to introduce zero risk borrowers to banks, or introduce accounting changes to help that balance sheet资产负债表.

European debt crisis

Countries within euro currency block, has lost their right to the national currency.

And handed this power to the European Central Bank.

They have to focus on To quality of credit creation, more than interest rates.

When bank credit fell, property prices collapse, developers went bankrupt, the banking systems of Ireland, Portugal Spain and Greece became insolvent周转不灵.

it refused to do so until major political concessions have been made.

to create a public consensus for the need for structural reform.

I purposely creating a recession,

And then needlessly prolonging it.

Must constitute abuse of power.

Citizens citizens really want to be manipulated?