Bernard's Top 10: Japan's umpteenth stimulus package; Calls for higher minimum wages; China tightening monetary policy; A US$10 bln freedom ship; Dilbert

Here's my Top 10 links from around the Internet at 10 am. As always, we welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz. 

See all previous Top 10s here.

My must read today is #9 on how China is tightening its monetary policy, in a wonky sort of way.

1. Yet another Japanese stimulus plan - Japan is doubling its money supply in less than two years to try to create inflation.

It has been building 'bridges to nowhere' for decades in an attempt to try to stimulate an economy beset by the bursting of an epic stock market and property bubble, along with a rapidly ageing population.

It may have worked to avoid complete catrastrophe and some say it actually helped build per capita real GDP, after the impact of population decline and falling prices.

Whatever the case, Japan is now committed boots and all to money printing and deficit spending to try to get things going.

It is having all sorts of effects. One is a devaluation of the yen and the subsequent ability of Japanese car exporters to cut prices in export markets to get demand going.

Anyone looking at the motoring sections of the papers lately can't fail to notice the slump in new car prices in recent months, in particular from Japan, Korea and Europe. It's great for consumers.

Here's Reuters with the latest package:

2. How a T-Shirt is made - NPR's excellent Planet Money programme has done an amazing thing. It has gone right through the chain of production and distribution for a T-Shirt to better understand how the new globalised system of making and selling stuff actually works. 

3. Hong Kong's strange shortage of men - The Atlantic reports on the shortage of men in Hong Kong, which is the direct opposite of what happens on the Mainland.

The reasons are interesting. 

“There are several reasons,” says Dr. Suzanne Choi, a researcher in gender studies at the Chinese University of Hong Kong. “Hong Kong women are highly qualified and independent, but the marriage norm of men marrying down and women marrying up has remained largely intact. So some men may be unable to find a local wife due to their comparative socioeconomic disadvantages. But some may also want to find a wife with lower qualifications and earning power anyway, so they can conform to social expectations. The increase in regional economic integration has resulted in a large number of Hong Kong men working in South China so they actually have far more opportunities to meet mainland women than ever before.”

Despite the shortage of eligible partners, women in Hong Kong are renowned for being selective, but their reasons for seeking men with higher earning power are also linked to the growing financial pressure on couples.

4. A Freedom ship - Where will the hyper-rich to avoid the grumpy, teeming masses and their peskily high tax rates?

How about a floating hotel that is a 25 storey ship with a one mile long runway on the roof, which is long enough for private planes.

Sigh.

Here's the International Business Times with the article.

"The Freedom Ship community has not been conceived as a tax haven. While the community itself will levy no taxes, citizens of countries such as the US would not realise any income tax savings by residing in or running businesses in the community, at least at the federal level, since American citizens are taxed on their worldwide income."

However the company does concede that residents of other countries "may realise tax savings by residing in or running businesses in the Freedom Ship Community".

5. Our different paths - Australia was quick to criticise China over its extension of an air defence zone over the Diaoyu/Senkaku Islands in the seas between China and Japan last week.

That triggered an immediate rebuke to Australia from China, who said it would damage relations.

John Key, meanwhile, was much more careful this week, saying simply that China and Japan needed to sort it out diplomatically. It seems (see cartoon below) the Brits are also trying to play nice with China. The poor old Dalai Lama will be a private tourist for the rest of his life.

Here's the Guardian on China's response to Australia:

China's foreign ministry spokesman Qin Gang was quoted by AFP as replying: "Australia's irresponsible statements on the East Sea air defence identification zone are completely mistaken. China cannot accept them.” He called on Australia to "immediately correct its mistake, so as to avoid damaging China-Australia relations”.

6. Raise the minimum wage - Paul Krugman has written a good piece calling for a big increase in America's minimum wage. The chart for real retail wages is shocking.

Although the national minimum wage was raised a few years ago, it’s still very low by historical standards, having consistently lagged behind both inflation and average wage levels. Who gets paid this low minimum? By and large, it’s the man or woman behind the cash register: almost 60 percent of U.S. minimum-wage workers are in either food service or sales. This means, by the way, that one argument often invoked against any attempt to raise wages — the threat of foreign competition — won’t wash here: Americans won’t drive to China to pick up their burgers and fries.

Still, even if international competition isn’t an issue, can we really help workers simply by legislating a higher wage? Doesn’t that violate the law of supply and demand? Won’t the market gods smite us with their invisible hand? The answer is that we have a lot of evidence on what happens when you raise the minimum wage. And the evidence is overwhelmingly positive: hiking the minimum wage has little or no adverse effect on employment, while significantly increasing workers’ earnings.

7. And it's not just the lefties - Here's Edward Luce at the Financial Times calling for a higher minimum wage in America.

For the first time in a generation, companies such as general retailer Walmart and McDonald’s are under real pressure to pay better wages. The arguments in favour of a significantly higher US minimum wage are strong. First, it would inject a much-needed stimulus into the anaemic recovery without involving a dollar of taxpayer money. Politics makes the latter impossible.

Indeed, public spending on food stamps and long-term unemployment payouts is set to fall sharply at the start of 2014, which will undercut the recovery in US consumer demand (the lower your income, the more of it you spend).

8. China quietly tightening monetary policy - Gavyn Davies writes at an FT blog about China's quiet tightening of monetary policy in recent months and a slowdown in shadow bank lending. 

Although the PBOC’s description of monetary policy in China uses words like “prudent” and “stable”, these descriptions should be taken as relevant only to the official banking sector. Elsewhere in the system, there is no doubt that the central bank is progressively squeezing monetary conditions in order to control the growth of credit in the shadow banking sector. This squeeze shows no signs so far of slowing the rate of inflation in housing and land prices in the major cities, especially Beijing. Until this happens, the risk of a hard landing cannot be lightly dismissed.

In the recent housing bubble in the US, the Fed tightened policy progressively for several years before the housing market collapsed , and the disastrous consequences for the banking sector became fully apparent. China does have more levers at its disposal than the US authorities chose to use from 2005-08. Nevertheless, it will be a long time before we can be confident that China has avoided the hard landing that normally follows credit explosions on such a scale.

9. The password was 00000000 - It turns out the password to push the button on America's Minuteman nuclear missiles was eight zeros for a couple of decades....

And you thought 0000 as your PIN was a bad idea...

10. Australian income falling - No wonder net migration to New Zealand is improving as the net emigration to Australia dries up. 

Leith van Onselen writes at Macrobusiness about a surprise slide of 1% in real disposable income per capita in Australia over the last year.