Tuesday, March 13, 2012

452 Japan Disaster causes Manufacturing Meltdown, prompts rethink of Globalization

Japan Disaster causes Manufacturing Meltdown, prompts rethink of Globalization

(1) Japan Disaster causes Manufacturing Meltdown, prompts rethink of Globalization
(2) Japanese manufacturing activity posts its steepest monthly decline on record
(3) Toyota's output of vehicles to fall
(4) Japanese gov't can afford its debt because it owns the bank that is its principal creditor
(5) Central banks' Yen intervention: How G7 used the "Tokyo Call" to Bailout more Banks
(6) Japan - a lot more people hungrier than I am
(7) Fukushima earthquake was similar to the Great Edo earthquake of 1855
(8) Gorbachev compares Fukushima to Chernobyl
(9) Politburo skepticism of Chernobyl reactor design
(10) Fukushima engineer admits flawed steel in Reactor 4 is a 'time bomb'
(11) French nuclear industry tried to stop switch from Uranium to Thorium reactors
(12) Chernobyl sarcophagus at end of its life; lessons for Fukushima
(13) Japan Times editor alleges secret Nuke program at Fukushima

(1) Japan Disaster causes Manufacturing Meltdown, prompts rethink of Globalization
From: Paul de Burgh-Day <pdeburgh@harboursat.com.au> Date: 21.04.2011 01:41 AM

Japan's Disaster and the Manufacturing Meltdown

What the Earthquake and Tsunami Revealed About Globalization

Marc Levinson

Foreign Affairs | 17 April 2011

http://www.foreignaffairs.com/articles/67743/marc-levinson/japans-disaster-and-the-manufacturing-meltdown

The effects of Japan’s March earthquake and tsunami are being felt far beyond the shattered region around Sendai and Fukushima. As U.S. auto assembly lines grind to a halt for want of components that usually come from now-disabled factories in northeastern Japan, business strategists may be forced to rethink the way globalized companies do business. The result could well be a retreat from current manufacturing methods -- sourcing key components from a single supplier and running "lean" factories without stocks of supplies on hand -- whose main goal is to minimize costs. Now, management may also pay close attention to risks.

Such a change would represent a reversal of course for major international companies, potentially transforming the way that many of the world’s industrial giants have functioned for the past two decades. Whereas companies used to run separate operations in many countries, each serving a given national market, in the 1980s multinational corporations started to run their affairs with diminishing attention to national borders. Today, a single plant or research center will often take worldwide responsibility for a particular product or business area. And whereas factories once manufactured their own components or purchased them nearby, now even some small plants have supply lines that stretch across the globe. Almost every manufacturer, from your local maker of wedding dresses to Boeing and Caterpillar, is a global company, because its production relies critically on parts or other inputs made or designed outside its home country.

The globalization of manufacturing is responsible for much of the boom in international trade over the past two decades. Around half of the maritime shipping containers that arrive in the Los Angeles and New Jersey ports, for example, contain not products for retail sale but "intermediate goods," products partially manufactured in one location and destined for further processing somewhere else. Similarly, a large proportion of airfreight consists of high-value components, such as semiconductors and optical lasers, rather than finished consumer goods.

The shift to dispersed, highly specialized operations has significant economic advantages. One is that each producer focuses on the particular things it does best, instead of devoting capital and management attention to a wide variety of activities or to activities that offer poor returns, such as manufacturing components that are already widely available at low prices. A second advantage of this type of production is that it permits economies of scale. A specialized factory may produce only a few types of goods, but it is able to make and sell a lot of each one, since its market is global. This usually means lower costs to produce each unit.

Financially, specialized production and global supply chains make sense. But firms -- and the investors who own them -- have paid too little attention to the risks that such a strategy entails.

As I wrote in "Freight Pain" (Foreign Affairs, November/December 2008), the development of long supply chains was made possible by the decline in the cost of moving goods. But even in 2008, those costs were already rising: "Congested shipping lanes and highways make transit times uncertain," I wrote, "and this uncertainty hurts profits." Moreover, the push for ever-greater port security will further slow transit; physical inspection of shipping containers could delay delivery by two to three days or more. As I wrote then, "Even if the proportion of containers pulled out of the flow of traffic is small, importers will be forced to reckon with the possibility that their goods might be delayed in transit. In some instances, importers will adjust by keeping more stocks in their U.S. warehouses at any one time."

Even more costly, an unforeseen event at one end of the chain may disrupt the flow of components to the next firm thousands of miles away. The problem is compounded if a sole-source supplier stops production. A manufacturer may be left high and dry if its producer of fuel pumps, friction bearings, or graphics processors goes offline. The recent disaster in Japan is an extreme example, but supply- chain problems are far from unusual. A shortage of freight cars, a dock strike, a factory closure due to lack of water, a riot that keeps a supplier’s employees from getting to work -- these and many other events can wreak havoc with production schedules.

It is hard to quantify how much supply-chain interruptions have cost business in recent years, because they generally go undisclosed. After all, no company wants to alert its competitors to weaknesses in its business model. And even in the case of the Japanese disaster, many companies with lower profiles than the automakers have yet to announce how they will be affected by shortages of or higher prices for essential components. Public attention has focused on outages at Japanese plants that turn out silicon wafers and memory chips, but there are surely many more obscure products that are in short supply.

The total cost of lost U.S. production due to shortfalls of Japanese components will easily run into the billions of dollars; slowing or closing down auto assembly lines, as several manufacturers have already done, does not come cheap. Other products that are "made in America," particularly factory equipment, also rely heavily on Japanese electronics, and even if those producers are not forced to close plants temporarily, the risk of delays in filling orders may cause impatient customers to defect to competitors who do not depend on inputs from Japan.

The supply-chain problems that followed the Japanese disaster were not inevitable. Companies can avoid them by building supply chains with redundancy and resilience. Redundancy means manufacturing key components in separate locations and transporting them along different paths so that a single problem at a supplier, port, or warehouse does not cripple production. Resilience means backing away from just-in-time production strategies and maintaining larger inventories so that delayed shipments do not shut down an entire factory.

Redundancy and resilience are not cheap. Sourcing from multiple locations will result in higher input costs. Keeping larger stocks on hand is costly, too, since it forces manufacturers to finance goods sitting uselessly on their warehouse shelves. All of this represents a drag on the larger economy insofar as it reduces economic efficiency.

But while reducing supply-chain risks has its costs, idle auto plants and electronics factories around the world demonstrate that there is also a cost to doing nothing. When the global supply chain fails to deliver a key component on time, the expense may be much higher than corporate strategists imagine.

(2) Japanese manufacturing activity posts its steepest monthly decline on record
From: Paul de Burgh-Day <pdeburgh@harboursat.com.au> Date: 02.04.2011 09:57 AM

Japanese Economic Collapse Confirmed by PMI plunge From 52.9 To 46.4, Largest Drop Ever

By Tyler Durden

http://www.zerohedge.com/article/japanese-economic-collapse-confirmed-pmi-plunge-529-464-largest-drop-ever

Created 03/31/2011 - 08:08

In the first economic metric since the Japanese earthquake struck, Japanese manufacturing activity slumped to a two-year low in March and posted its steepest monthly decline on record, confirming all the worst fears about supply chain disruptions and production operations, according to the Japanese PMI released on Thursday. From Need to Know News: "The 6.5-point drop in March was the largest on record, surpassing the falls seen after the collapse of Lehman Brothers in September 2008 and the U.S. terror attacks in September 2001, MarkIt Economics said, adding that the March PMI index was the lowest since 41.4 marked in April 2009. Kohei Okazaki, economist at Nomura Securities, said March industrial output due out on Apr. 28 is expected to show a m/m fall of at least 10%. The PMI index is closely correlated to industrial output released by the Ministry of Economy, Trade and Industry. Markit, a UK-based research firm, conducted the latest survey between March 11 and March 25, and only 67% of those polled responded. It releases manufactures PMIs for 25 areas in the world every month." And in addition to all the collapse in all output metrics, adding insult to injury is the confirmation that inflation is now ravaging the land: the input price index increased to 65.2, the highest since September 2008, due to higher costs of raw materials such as crude oil and naphtha. It now appears that Japan is about to have the worst stagflationary episode in its history ever.

From Reuters [1]:

The Markit/JMMA Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonally adjusted 46.4 in March, the lowest since April 2009 and down from February's 52.9. ...

(3) Toyota's output of vehicles to fall

http://www.reuters.com/article/2011/04/12/business-us-autos-production-idUKTRE73B07E20110412?type=companyNews

Japan supply uncertainty looms for Toyota

04/11/2011

By Bernie Woodall

DETROIT | Mon Apr 11, 2011 9:07pm EDT

(Reuters) - Toyota Motor Corp (7203.T) on Monday warned that the uncertain supply of parts from Japan could threaten its output of vehicles through July, the latest sign of trouble for the global auto industry stemming from the massive Japanese earthquake a month ago.

Ford Motor Co (F.N), meanwhile, said it would slow or shut down production in Asia in the last week of April and into May at its factories and joint ventures in the region, a step it said it did not expect would cut into second-quarter earnings.

The evidence of deeper and long-running output disruptions because of a shortage of key parts -- including semiconductors -- from Japan comes as major automakers grapple with complications caused by parts factories that have been shuttered or are running with limited power in Japan.

"Today we have good levels of inventory, but inventory will be getting tighter," Toyota's U.S. sales chief, Bob Carter, told Toyota dealers in an email sent on Sunday.

"Toyota will be producing new vehicles at significantly reduced levels," Carter's note said. "What we don't know are vehicle production levels for May through July. The potential exists that supply of new vehicles could be significantly impacted this summer.

The slowdown of production could limit Toyota's ability to capture market share on its fuel-efficient lineup this summer when U.S. average gasoline prices are expected to top $4 per gallon, analysts have said.

In 2008, Toyota's sales for its Prius hybrid and small-car lineup, including Corolla, spiked when gas prices surpassed $4 per gallon.

As a way of explaining the complexities faced by Toyota and other automakers with the ongoing Japan-related parts shortages, Carter said delivery of about 800,000 auto parts have been affected by the earthquake and its aftermath.

For its part, Ford said in a filing with U.S. securities regulators that the uncertainty surrounding the supply of components from Japan could affect its results, repeating a warning it had made 10 days earlier.

"Because the situation in Japan continues to develop, supply interruptions related to other materials and components from Japan could manifest themselves in the weeks ahead," Ford said in its filing.

"Should the supply of a key material or component from Japan be disrupted and an alternate supply not be available, we could have to reduce or temporarily cease production of vehicles," it said.

Ford's production in Asia includes its joint venture in China with Changan, and a plant operated in Thailand in a joint venture with Mazda.

LOWER SUPPLY, FEWER CHOICES

The expected slowdown in vehicle production in both Japan and North America comes at a time when vehicle inventories at U.S. dealerships are dwindling and auto sale prices are being pushed higher for consumers.

CNW Research said on Monday that early April U.S. auto sales are showing the highest average transaction prices in relation to the manufacturers' suggested retail price since 1996.

DETROIT | Mon Apr 11, 2011 9:07pm EDT
The average transaction price is the actual price to consumers of a new vehicle after manufacturer and dealer discounts and incentives.

General Motors Co (GM.N) Chief Financial Officer Tim Ammann told analysts last week the impact of the Japan crisis might push vehicle prices higher and allow GM to cut back incentives.

GM had about 60 days supply of vehicles with its U.S. dealers before the March 11 earthquake, slightly leaner than the corresponding levels for Toyota and Honda Motor Co (7267.T).

Kelley Blue Book analyst Alec Gutierrez said in a report on Monday that the Japan parts shortage would tighten vehicle supply across the board, pushing prices higher.

"Within 30 to 60 days, we expect to begin experiencing shortages of high in-demand models either produced in Japan or that rely on parts from Japan," he said.

In his email to Toyota dealers, Carter told the automaker's U.S. dealers that customers would face more limited color choices because of a shortage of Xirallic, a specialty pigment.

Major automakers, including Chrysler Group LLC (FIA.MI), Toyota, GM and Ford use Xirallic, produced at only one factory in the world -- the Onahama plant near the Fukushima-Daiichi nuclear power station in Japan.

The plant is operated by German chemical company Merck KGaA (MRCG.DE).

Carter also told U.S. dealers that they would face a reduced supply of vehicles with availability of key models varying between regions of the United States.

"I know it is frustrating that we are not able to provide all of the answers to your questions at this time," Carter said.

(Reporting by Bernie Woodall; Editing by Phil Berlowitz)

(4) Japanese gov't can afford its debt because it owns the bank that is its principal creditor

From: Sandhya Jain <sandhya206@bol.net.in> Date: 13.04.2011 10:00 AM

http://www.vijayvaani.com/FrmPublicDisplayArticle.aspx?id=1724

Japan financing reconstruction: The monetary implications of the nuclear catastrophe

Ellen Brown

13 April 2011

The Japanese government can afford its enormous debt because it owns the bank that is its principal creditor. But competitors are attempting to force the bank’s privatization. If they succeed, they could propel the country into debt servitude along with other credit-strapped nations. When an IMF spokeswoman said at a news conference on March 17 that Japan has the financial means to recover from its devastating tsunami, skeptical bloggers wondered what she meant. Was it a polite way of saying, "You’re on your own?"

Spokeswoman Caroline Atkinson said, "The most important policy priority is to address the humanitarian needs, the infrastructure needs and reconstruction and addressing the nuclear situation. We believe that the Japanese economy is a strong and wealthy society and the government has the full financial resources to address those needs." Asked whether Japan had asked for IMF assistance, she said, "Japan has not requested any financial assistance from the IMF."

Skeptics asked how a country with a national debt that was over 200% of GDP could be "strong and wealthy." In a CIA Factbook list of debt to GDP ratios of 132 countries in 2010, Japan was at the top of the list at 226%, passing up even Zimbabwe, ringing in at 149%. Greece and Iceland were fifth and sixth, at 144% and 124%. Yet Japan’s credit rating was still AA, while Greece and Iceland were in the BBB category. How has Japan managed to retain not only its credit rating but its status as the second or third largest economy in the world, while carrying that whopping debt load?

The answer may be that the Japanese government has a captive funding source: it owns the world’s largest depository bank. As US Vice President Dick Cheney said, "Deficits don’t matter." They don’t matter, at least, when you own the bank that is your principal creditor. Japan has remained impervious to the speculative attacks that have crippled countries such as Greece and Iceland because it has not fallen into the trap of dependency on foreign financing.

Japan Post Bank is now the largest holder of personal savings in the world, making it the world’s largest credit engine. Most money today originates as bank loans, and deposits are the magic pool from which this credit-money is generated. Japan Post is not only the world’s largest depository bank but its largest publicly-owned bank. By 2007, it was also the largest employer in Japan, and the holder of one-fifth of the national debt in the form of government bonds. As noted by Joe Weisenthal, writing in Business Insider in February 2010:

- Because Japan's enormous public debt is largely held by its own citizens, the country doesn't have to worry about foreign investors losing confidence.

- If there's going to be a run on government debt, it will have to be the result of its own citizens not wanting to fund it anymore. And since many Japanese fund the government via accounts held at the Japan Post Bank - which in turn buys government debt - that institution would be the conduit for a shift to occur.

That could explain why Japan Post has been the battleground of warring political factions for over a decade. The Japanese Postal Savings System dates back to 1875; but in 2001, Japan Post was formed as an independent public corporation, the first step in privatizing it and selling it off to investors. When newly-elected Prime Minister Junichiro Koizumi tried to push through the restructuring, however, he met with fierce resistance. In 2004, Koizumi shuffled his Cabinet, appointed reform-minded people as new ministers, and created a new position for Postal Privatization Minister, appointing Heizo Takenaka to the post. In March 2006, Anthony Rowley wrote in Bloomberg:

- By privatizing Japan Post, [Koizumi] aims to break the stranglehold that politicians and bureaucrats have long exercised over the allocation of financial resources in Japan and to inject fresh competition into the country's financial services industry. His plan also will create a potentially mouthwatering target for domestic and international investors: Japan Post's savings bank and insurance arms boast combined assets of more than ¥380 trillion ($3.2 trillion) . . .

A $3 trillion asset pool is mouthwatering indeed. In a 2007 reorganization, the postal savings division was separated from the post office’s other arms, turning Japan Post into a proper bank. According to an October 2007 article in The Economist:

- The newly created Japan Post Bank will be free to concentrate on banking, and its new status will enable it to diversify into fresh areas of business such as mortgage lending and credit cards. To some degree, this diversification will also be forced upon the new bank. Some of the special treatment afforded to its predecessor will be revoked, obliging Japan Post Bank to invest more adventurously in order to retain depositors--and, ultimately, to attract investors once it lists on the stock market.

That was the plan, and Japan Post has been investing more adventurously; but it hasn’t yet given up its government privileges. New Financial Services Minister Shizuka Kamei has put a brake on the privatization process, and the bank’s shares have not been sold. Meanwhile, the consolidated Post Bank has grown to enormous size, passing up Citigroup as the world’s largest financial institution; and it has been branching into new areas, alarming competitors. A March 2007 article in USA Today warned, "The government-nurtured colossus could leverage its size to crush rivals, foreign and domestic."

Before the March 2011 tsunami, that is what it appeared to be doing. But now there is talk of reverting to the neoliberal model, selling off public assets to find the funds to rebuild. Christian Caryl commented in a March 19 article in Foreign Affairs, published by the Council on Foreign Relations:

- As horrible as it is, the devastation of the earthquake presents Japan and its political class with the chance to push through the many reforms that the DPJ [Democratic Party of Japan] has long promised and the country so desperately needs.

In other words, a chance for investors to finally get their hands on Japan’s prized publicly-owned bank, and the massive deposit base that has so far protected the economy from the attacks of foreign financial predators.

The Japanese government can afford its enormous debt because the interest it pays is extremely low. For the private economy, public debt IS money. A large public debt owed to the Japanese people means Japanese industries have the money to rebuild. But if Japan Post is sold off to private investors, interest rates are liable to rise, plunging the government into the debt trap it has so far largely escaped.

The Japanese people are intensely patriotic, however, and they are not likely to submit quietly to domination by foreigners. They generally like their government, because they feel it is serving their interests. Hopefully the Japanese government will have the foresight and the fortitude to hang onto its colossal publicly-owned bank and use it to leverage its people’s savings into the credit needed to rebuild its ravaged infrastructure, avoiding a crippling debt to foreign interests.

Ellen Brown is an attorney and president of the Public Banking Institute, http://PublicBankingInstitute.org.  In Web of Debt, her latest of eleven books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back.  Her websites are http://webofdebt.com and http://ellenbrown.com.

(5) Central banks' Yen intervention: How G7 used the "Tokyo Call" to Bailout more Banks

Wednesday, 13th April 2011
Melbourne, Australia
By Kris Sayce

http://www.moneymorning.com.au/20110413/how-g7-used-the-tokyo-call-to-bailout-more-banks.html

Wednesday is the day we usually start writing our weekly update to Australian Small-Cap Investigator subscribers.  If you're not already a subscriber, you can click here to join now…

In last week's update we wrote:

"Since the S&P/ASX 200 was first established on 17 October 2001, the index has never – repeat, never – had a run of thirteen up-days over fourteen trading days.  Yet that's exactly what has happened since 18 March."

We published that comment last Thursday.  Slipstream Trader, Murray Dawes had had a feeling in his guts that something was amiss or unusual with the market action.

So we crunched a few numbers and discovered that Murray's guts hadn't been influenced by a dodgy curry.  He was right, the recent market action was unusual.

That day the index closed down, breaking the streak.

But that run shows you the power of central bank intervention.  And it shows you how credit-fuelled speculation finishes the job the central banks start.

If you recall, soon after the earthquake and tsunami in Japan, the G7 nations vowed to "help" the Japanese economy by selling billions of dollars of Yen on the financial markets.

Helping the Yen

This action would push the value of the Yen lower, supposedly to give a boost to Japanese exports.  Of course, it wasn't really designed to help exporters.  There was a hidden agenda.  But more on that in a moment.

Anyway, the plan worked a treat:

{see graph at http://moneymorning.com.au/images/mm20110413ajpg.jpg}

Source: Yahoo! Finance

The above chart is the Aussie dollar/Japanese Yen exchange rate.

After the earthquake, you could buy around 76 Yen for each Aussie dollar.  But following the central bank intervention, the Yen weakened.  Meaning today, you can buy nearly 90 Yen for every dollar.

That's an increase of nearly 18% for the Aussie dollar against the Yen.

The important point is the amount sold by the central banks has been peanuts compared to the total size of the foreign exchange market.

According to the Financial Times:

"Traders estimate more than $25bn was spent by the world's richest nations, a great deal of it by Japan, in an effort to drive the Japanese currency sharply lower…"

USD$25 billion sounds like a heck of a lot.  And it is.

But if you put it in context, you'll see what I mean about it being peanuts.

FX Peanuts

Each day, around USD$4 trillion is traded on foreign exchange markets.  So even if the G7 central bankers sold the USD$25 billion worth of Yen on one day, it would be no more than 0.625% of the daily foreign exchange turnover.

That's tiny.

So, why should such a small amount have such a huge influence?

I mean, how can a trade that makes up 0.625% of daily turnover cause the value of the Aussie dollar to rise nearly 18% in just four weeks?

And think about it this way.  Over that time, at an average USD$4 trillion of foreign exchange traded each day, that works out at nearly USD$100 trillion.

So, as a percentage of that, the G7 intervention was just 0.025% of the turnover during that period.

It seems ridiculous that such a small number could have such a huge impact.

Yet, the intervention gives you a perfect example of the manipulative nature of central banks.

Central banks act like the Pied Piper.  They play a few notes on a whistle and everyone falls in line.  Big investors figure if they're following the Pied Piper, everyone else will too.

So what do they do?  That's right, they all pile in on the same trade.

Punters took the view that central bankers were putting a cap on the Yen.  That it wouldn't be allowed to appreciate any further against other currencies.

You've probably heard of the "Greenspan Put".  That was the idea that former US Federal Reserve chairman, Alan Greenspan wouldn't allow stock markets to fall.

That in the event of any adverse economic event, the Fed would intervene to lower interest rates.  And lower interest rates should mean more money flowing out of fixed interest investments and into riskier stock investments.

The term "put" is a reference to the options market where buying a put option allows you to limit your losses, or profit from falling prices.

The "Tokyo Call"

In the case of the G7 currency intervention, we could call it the "Tokyo Call".

G7 central bankers have in effect bought a call option to protect all those punters who are short the Japanese Yen as part of the Carry Trade.

In other words, the "Tokyo Call" was another in a lengthening line of banking and fund manager bailouts.

If you're not familiar with the Carry Trade, let me explain…

It's where big investors borrow money in a low interest rate economy and then take that money to invest in a higher interest rate economy.

The Carry Trade has been going on for years.

One of the major beneficiaries has been – and continues to be – the Australian market.

As interest rates have historically been higher in Australia than Japan, it gives big punters the easy trade of borrowing Yen, selling it, buying Aussie dollars and then investing in Aussie assets – bonds, shares, etc.

If you're borrowing money at 0.1% and investing it at 5%, then all else being equal you'll make a 4.9% return.  The caveat is that the exchange rate needs to be stable, or for the currency you're borrowing (Yen) not to rise in value.

But it's not just Australia that has benefited.  Any economy with an interest rate higher than Japan's has benefited from the Carry Trade – Brazil, Argentina, Europe, United States, UK…

There aren't many economies with lower rates than Japan.

And because the carry trade has gone on for so long, there is a huge exposure to it.

In fact, the carry trade is one of the biggest risks hanging over the global economy.  As I say, in order for the trade to work, the Yen must not increase in value.  The Yen must remain low.

If the value of the Yen goes up it will cause massive losses to banks and investment firms that have borrowed in Yen to buy investments in other currencies.

The Carry Trade Bubble

For instance, if a firm borrows one trillion Yen at 100 Yen to the dollar (we're just using made-up numbers here), that equates to a $10 billion exposure.

$10 billion that can be invested in Australian investments.

Now, assuming the value of the investments don't change, but the value of the Yen strengthens to 90 Yen to the dollar, the same $10 billion will only buy 900 billion Yen when the loan is repaid.

In other words, the investment firm would take a 100 billion Yen loss on the trade, or about $1 billion.

Now multiply that number many, many times and you'll come to a figure that gives you the total financial exposure to the Carry Trade.  But just how big is the carry trade?  And what does it mean for your investments?

There's probably no accurate way of determining the actual size of the carry trade.  But  according to a 2007 article in The Economist:

"Tim Lee, of Pi Economics, reckons as much as $1 trillion may be staked on the yen carry trade."

Personally – with no way of verifying this – we'd wager the real exposure is much bigger.

For a start, Japan alone holds USD$885 billion of US Treasuries.  That's almost $1 trillion of carry trade without taking into account the billions and trillions of dollars held in other foreign bonds and the trillions traded on markets each day.

But back to The Economist article.  It continues:

"Were the yen ever to rise sharply (making the trade unprofitable), there could be hell to pay in the markets."

You see, "hell to pay in the markets."

Another banking bailout

As you can see, on the chart I showed you earlier, the Yen appreciated by 10% immediately following the earthquake and tsunami.  There's no doubt banks and fund managers were taking big hits on the carry trade.

What did those banks and fund managers need in order to avoid realising those losses?  That's right, another central bank bailout.

But as with all interventions and bailouts, it didn't just return the market to its previous state.  It amplified the risk taking.  The G7 intervention did to the market what all central bank intervention does – it distorts the market, causing a bubble which ultimately leads to a bust.

Look at the chart again.  Before the earthquake, the Aussie was trading at about 84 Yen.  But after the G7 bailout, the Aussie is now trading close to 90 Yen.

That tells you more punters have been drawn into the carry trade thanks to the "Tokyo Call".  Thanks to the G7 intervention, punters are betting central banks won't allow the Yen to rise above a certain level.

If punters were worried about the risk of the carry trade before, they sure as heck aren't worried about it now.  They now believe central banks will suppress the Yen from rising.  So with that knowledge why wouldn't big punters – banks and fund managers – leverage up with big bets?

That's why it's a Tokyo Call.  Punters are short the Yen.  That means they want the Yen to hold steady or fall further in value.  If you're short an investment, one way to protect yourself against a rising price (which would result in losses) is to buy a call option.

The call option limits your losses on a short trade.

But why bother if you know central bankers are buying call options for you?  And why not take an even bigger bet than before if you know central bankers will bail you out?

Moral hazard anyone?

If the G7 currency bailout proves nothing else, it shows exactly how the intervention of central bankers results in increased risks rather than lower risks.  And it shows you how the financial markets are rigged to provide perpetual bailouts to Wall Street, City of London, Collins Street and Martin Place insiders.

As we look at the stock market, the rapid rise since early 2009 and the take-off of commodity prices since late 2010, it's hard to see how it's anything but the result of manipulation by central bankers.

The blowing up of one bubble after another.

It's exactly why we're happy to play along with their games and make money from it.  But unlike those in the mainstream, we're under no illusions that this is a genuine economic recovery.

It's just another bubble being caused by corrupt central bankers, who are more concerned with bailing out their buddies in the banking sector.  They may think they can keep this game going forever.

But just as the market eventually collapsed under the weight of its own filth in 2008, it will collapse again.  Only this time, the filth is bigger and smellier, and will cause much more mess.

(6) Japan - a lot more people hungrier than I am

From: David <dgwest7@gmail.com> Date: 05.04.2011 05:40 AM

Date: April 3, 2011 12:13:56 PM CST

http://www.shanghaidaily.com/article/blog.asp?id=467066

EDITOR'S note: THIS letter, written by Vietnamese immigrant Ha Minh Thanh working in Fukushima as a policeman, to a friend in Vietnam, was posted on New America Media on March 19. It is a testimonial to the strength of the Japanese spirit, and an interesting slice of life near the epicenter of Japan's crisis at the Fukushima nuclear power plant. It was translated by NAM editor Andrew Lam, author of "East Eats West: Writing in Two Hemispheres." Shanghai Daily condensed it.

* * * * *

Brother, How are you and your family? These last few days, everything was in chaos. When I close my eyes, I see dead bodies. When I open my eyes, I also see dead bodies. Each one of us must work 20 hours a day, yet I wish there were 48 hours in the day, so that we could continue helping and rescuing folks. We are without water and electricity, and food rations are near zero. We barely manage to move refugees before there are new orders to move them elsewhere.

I am currently in Fukushima, about 25 kilometers away from the nuclear power plant. I have so much to tell you that if I could write it all down, it would surely turn into a novel about human relationships and behaviors during times of crisis. People here remain calm - their sense of dignity and proper behavior are very good - so things aren't as bad as they could be. But given another week, I can't guarantee that things won't get to a point where we can no longer provide proper protection and order. They are humans after all, and when hunger and thirst override dignity, well, they will do whatever they have to do. The government is trying to provide supplies by air, bringing in food and medicine, but it's like dropping a little salt into the ocean.

Brother, there was a really moving incident. It involves a little Japanese boy who taught an adult like me a lesson on how to behave like a human being. Last night, I was sent to a little grammar school to help a charity organization distribute food to the refugees. It was a long line that snaked this way and that and I saw a little boy around 9 years old. He was wearing a T-shirt and a pair of shorts. It was getting very cold and the boy was at the very end of the line. I was worried that by the time his turn came there wouldn't be any food left. So I spoke to him. He said he was at school when the earthquake happened. His father worked nearby and was driving to the school. The boy was on the third floor balcony when he saw the tsunami sweep his father's car away.

I asked him about his mother. He said his house is right by the beach and that his mother and little sister probably didn't make it. He turned his head and wiped his tears when I asked about his relatives. The boy was shivering so I took off my police jacket and put it on him. That's when my bag of food ration fell out. I picked it up and gave it to him. "When it comes to your turn, they might run out of food. So here's my portion. I already ate. Why don't you eat it?"

The boy took my food and bowed. I thought he would eat it right away, but he didn't. He took the bag of food, went up to where the line ended and put it where all the food was waiting to be distributed. I was shocked. I asked him why he didn't eat it and instead added it to the food pile. He answered: "Because I see a lot more people hungrier than I am. If I put it there, then they will distribute the food equally."

When I heard that I turned away so that people wouldn't see me cry. A society that can produce a 9-year-old who understands the concept of sacrifice for the greater good must be a great society, a great people. Well, a few lines to send you and your family my warm wishes. The hours of my shift have begun again.

Ha Minh Thanh

(7) Fukushima earthquake was similar to the Great Edo earthquake of 1855

From: Mary Ardley <ard@aapt.net.au> Date: 29.03.2011 08:04 AM Subject: Japan Earthquake

The recent earthquakes were entirely predictable. They are triggered by planetary stress on the earth. Saturn, Jupiter, Uranus are the key players. Pluto mixed up with them brings terrible destruction. When they mix up with the lunar nodes it is the same. The Japan earthquake was very similar to the Great Edo earthquake in the way the planets lined up. The NZ earthquake was very similar to the Napier quake in 1931...it doesn't happen like that too often

On the other hand...if HAARP up in Alaska was sending out high strength earthquake frequency for two days prior to the Japan quake then that works too. What might have been a magnitude 6 or 7 turned into nearly 9....easy...thay can't create them out of nothing. I tried to tell someone who was once a neighbour of mine in NZ...who is a geophysicist...who I thought might be receptive....(not about HAARP !)...but planetary stress causing earthquakes....and that they are easily predictable. Strangely...he wasn't !..in fact I thought I had stumbled into a police cordon, sniffer dogs and the official secrets act ...so that was a sad surprise. They don't seem to want anyone to know they can be predicted. That really is suspect.

Comment (Peter M.):

Others blamed the Edo Earthquake on a giant catfish: http://en.wikipedia.org/wiki/Ansei_Great_Earthquakes

Where does Astrology end and Astronomy begin?

The Sun, the Moon and the bigger, closer planets have a tidal pull on the earth, but the planets' effects are relatively insignificant. Venus' tidal effect is about 1/4000 that of the Moon (see below). Small, very distant planets such as Pluto would have negligible effect.

When the Sun and Moon are aligned with Earth, their tidal effects are added, and tides are a maximum.

The tidal force "falls off approximately as the inverse cube of the distance to the originating gravitational body ... lunar tidal acceleration ... is about 1.1 x 10-7 g, while the solar tidal acceleration ... is about 0.52 x 10-7 g, where g is the gravitational acceleration at the Earth's surface. Venus has the largest effect of the other planets, at 0.000113 times the solar effect."
http://en.wikipedia.org/wiki/Tide

Also see http://en.wikipedia.org/wiki/Tidal_force

The Edo Earthquakeof 1855 led to a change of regime 12 years later: http://www.east-asian-history.net/textbooks/175/ch2.htm. Might the recent traumatic events in Japan lead to another such transformation?

(8) Gorbachev compares Fukushima to Chernobyl

http://www.hindustantimes.com/Before-Fukushima/Article1-680937.aspx

Before Fukushima...

Mikhail Gorbachev
April 03, 2011

I first heard of the Chernobyl nuclear reactor breakdown on the morning of April 26, 1986, when the Soviet ministry of medium machine building, responsible for nuclear reactors, reported it to the Kremlin. Though the seriousness of the incident remained unclear during our emergency politburo me eting, a government commission, comprising scientists from the Soviet Academy of Sciences, nuclear reactor specialists, physicians and radiologists, was established and dispatched to Chernobyl.

Initial reports were cautious, and only on the following day, did we learn that an explosion had taken place at the nuclear power station, at least two people had been killed, and radioactive material had been released downwind. The international media, however, had already started talking about a radioactive cloud. We received more concrete information on April 28 and started informing the public of the seriousness of the disaster, focusing on efforts to manage the dangerous and worsening situation.

As efforts to contain the fire and radioactive releases continued, authorities began evacuating the locals. "The heart of the reactor, the hot radioactive core, is in suspension," academician Yevgeni Velikhov announced, adding, "Can it hold up or will it sink into the ground? No one has ever been in such a difficult position."

Within about ten days the reactor fire and radioactive releases were contained. But, by then, nuclear fallout had spread to Ukraine, Belarus, Russia and beyond. Thanks to the thousands of emergency workers, the consequences were limited. Much long-term damage, however, had been done. Some 50 workers died fighting the fire and reactor meltdown, and another 4,000 or more deaths may eventually be shown to have resulted from radioactive releases. The radiation dosage at the power plant during the accident has been estimated at over 20,000 roentgens per hour, about 40 times the estimated lethal dosage, and the World Health Organisation identified 237 workers with acute radiation sickness.

Over 135,000 people were evacuated from the area immediately following the accident, and another 200,000 over the following months. The extent of the nuclear fallout was illustrated by the fact that within only a few hours after the accident, radiation alarms were sounded off at Forsmark Nuclear Power Plant in Sweden, over 700 miles from Chernobyl. Today we know that about 77,000 square miles of territory in Europe and the former Soviet Union have been contaminated with radioactive fallout, leaving long-term challenges for flora, fauna, water and human health. Tens of billions of dollars have been spent in trying to contain and remediate the disaster, with a new containment shell now being constructed over the 1986 sarcophagus and what’s left of the reactor.

We must continue to examine the long-term public health and environmental consequences of the accident to better understand the relationship between radiation and human life. The 25th anniversary of the Chernobyl accident is an important historic milestone to remind ourselves of this solemn duty. Furthermore, it’s also the perfect time to address four issues:

Prevention: It’s important to prevent any possibility of a repetition of the Chernobyl accident. The true scope of the tragedy still remains beyond comprehension and is a shocking reminder of the reality of the nuclear threat. It’s also a striking symbol of modern technological risk.

Renewable energy: While the old Soviet nuclear reactor model is no longer in production, we must still be careful while constructing and operating nuclear power plants today. We can’t reject nuclear energy as many countries depend on it. But it’s necessary to realise that nuclear power is not a panacea, as some observers allege, for energy sufficiency or climate change. Its cost-effectiveness is also exaggerated, as its real cost doesn’t account for many hidden expenses. In the US, for example, direct subsidies to nuclear energy amounted to $115 billion between 1947 and 1999, with an additional $145 billion in indirect subsidies. In contrast, subsidies to wind and solar energy combined over the same period totalled only $5.5 billion. To end the vicious cycle of ‘poverty versus safe environment’, we must shift to efficient, safe and renewable energy. We must invest in alternative and sustainable sources of energy and conservation and energy efficiency initiatives to meet both energy demands and conserving our fragile planet.

Transparency: The closed nature and secrecy of the nuclear power industry, which had experienced some 150 significant radiation leaks at nuclear stations throughout the world before the Chernobyl fire, contributed to the accident and response difficulties. We need transparency and public oversight and regulation of the nuclear power industry today, along with complete emergency preparedness and response mechanisms.

Vulnerability to terrorism and violence: We must carefully consider the vulnerability of reactor fuel, spent fuel pools, dry storage casks, and related fissile materials and facilities to sabotage, attack and theft. While the Chernobyl disaster was accidental, today’s disaster can be intentional. We must pay attention to keeping weapons and materials of mass destruction — in this case, nuclear weapons-grade materials such as high-enriched uranium and plutonium — out of the hands of terrorists and rogue nations. US President Barack Obama’s initiative to secure and eliminate all bomb-grade nuclear material in four years is an important step forward in improving global security. But we must not forget that these fissile materials are often used in nuclear power and research reactors.

Let’s all remember Chernobyl not only for its negative impact on Ukraine, Belarus, Russia and Europe, but also as a beacon of hope for a safer and more sustainable future.

(Mikhail Gorbachev is former President of the Soviet Union. He was awarded the 1990 Nobel Peace Prize and is now the Founding President of Green Cross International.)

*The views expressed by the author are personal.


(9) Politburo skepticism of Chernobyl reactor design

http://www.spiegel.de/international/zeitgeist/0,1518,752696,00.html

03/24/2011

'This Reactor Model Is No Good'

Documents Show Politburo Skepticism of Chernobyl

By Christian Neef

AP/DDP

Politburo members voting during a session of the Supreme Soviet in Moscow in June 1986. President Andrei Gromyko (middle) can be seen next to Soviet leader Mikhail Gorbachev in the bottom row. Mikhail Solomentsev is on the right in the middle row.

Lies and deception were commonplace in the Soviet nuclear industry. Now Kremlin records which have been obtained by SPIEGEL reveal that Russian experts already had their doubts about the Chernobyl reactor before the 1986 disaster.

The gravestone in Moscow's famous Novodevichy Cemetery consists of a polished granite slab with a copper engraving on it of a kneeling young woman. She is wearing a headscarf and gazing thoughtfully at the ground. At her feet are the words: "Academy member Legasov, Valery Alexeyevich, 1936-1988."

The man who is buried here was a professor at Moscow University and a world-renowned specialist in the chemistry of inert gases. In the last years of his life, he served as deputy director of the Kurchatov Institute in Moscow, the center of Soviet nuclear research.

Legasov was a victim of the Chernobyl disaster. But he did not die of radiation sickness, even though he spent four months in Chernobyl after the explosion there. Legasov hanged himself in his office on April 27, 1988, almost two years to the day after the reactor accident in present-day Ukraine.

He left a legacy behind on his desk: tapes containing a detailed description of the catastrophe that -- at least until Fukushima -- was considered the ultimate symbol of nuclear apocalypse. Today, Legasov's recordings are available on the Internet, but not in their entirety: An important section was deliberately deleted shortly after his death.

'Criminal Negligence'

This isn't surprising. Trickery, deception and secrecy were part of the modus operandi of many of the individuals who were involved in the events at the Chernobyl nuclear power plant a quarter century ago. Some of this information would probably never have come to light if Mikhail Gorbachev hadn't already been in charge at the Kremlin in April 1986.

The Chernobyl accident was caused by "criminal negligence" and "a shocking lack of responsibility," Gorbachev angrily told the members of the politburo after they had tried to assign the blame to an unfortunate chain of adverse events. "One or two more of these cases," Gorbachev added, "and it'll be worse than after a nuclear war."

Excerpts from the minutes of the politburo, the inner circle of the Soviet party leadership, were later published, but only in fragments. The young Russian historian Pavel Stroilov, who lives in London today, secretly copied large parts of the Gorbachev archive. He has now made them available to SPIEGEL.

The discussions within the old boys' club of the politburo following Chernobyl were downright turbulent by Kremlin standards. They reveal leaders who were overwhelmed by events because their underlings had lied to them for years. Suddenly they were forced to realize that "an idiotic experiment" by subordinate plant engineers had thrown the country out of balance, and that neither its civil defense forces nor its medical service nor its fire department was functioning.

The discussion was especially heated during a meeting on July 3 attended by the Communist Party leaders, as well as experts and members of the government commission deployed after the Chernobyl accident, including Legasov. The minutes of that meeting reveal that the experts had never had any confidence in the safety of the Chernobyl reactors, in which graphite, instead of water, was used to slow down neutrons moving at high speeds following nuclear fission. But it was precisely this design that, on that fateful day, led to a rapid increase in the temperature and pressure in the reactor core, and then to an explosion that set the graphite on fire.

The following is an extract from the transcript of the meeting:

G.A. Shasharin (deputy energy minister): The personnel had no idea that this type of reactor can release so much energy. We didn't know it either. We were enthusiastic about this reactor but never truly convinced of its safety. There was only one protective system, and everyone assumed that it was no good. The Smolensk and Kursk nuclear power plants, as well as the two near Leningrad , should also be shut down. They can't even be refurbished anymore.

Mikhail Solomentsev (politburo member): You knew that the reactor wasn't safe?

Shasharin: Yes. But it was never documented in writing. There was a great deal of resistance to letting this become known. The Academy of Sciences and the Ministry of Medium Machine Building (responsible for nuclear energy) demanded a constant increase in the production of nuclear energy until the year 2000.

Efim Slavsky (minister of medium machine building): There is a problem with a turbine at the Leningrad nuclear power plant. There is a crack in the turbine shaft. 6,000 revolutions per minute. One explosion and everything will blow up there too. Twenty-six graphite rods were needed, but there were only five.

Gorbachev: Why were we so poorly informed? Does this mean that they don't even know what the potential consequences of such a fire can be? What idiots!

Anatoli Mayorets (energy minister): This reactor model is no good. There was a similar accident at the Leningrad nuclear power plant back in 1975. No one ever dealt with it. And the same thing already happened in Chernobyl in 1982, except that there was no release of radioactive material that time. No one learned anything from that accident, either. Foreign sources show that the West has already simulated the Chernobyl accident. Should we continue to lie to the IAEA? Moreover, we have to stop building cities next to nuclear power plants just because it's cheaper.

Gorbachev wanted openness, even toward the socialist "brother countries," which were building similar plants based on Soviet designs. "We have to speak very openly with the general secretaries," he said. "And we cannot say what our newspapers are writing. Fifty percent of the plants we send to the GDR (East Germany) are defective when they arrive."

In the same meeting, the comrades began to discuss other sources of energy, and that they wanted to "completely change" the Soviet Union's approach to nuclear energy and shift the focus to natural gas.

It isn't hard to guess why these passages in the debate were never released in their entirety: The party leadership knew that it couldn't rule out the possibility of a second Chernobyl occurring somewhere within their scope of influence in the future.

Gorbachev: What isolated areas we have created in this country! The Central Committee declared everything to be a secret. The government doesn't even determine the locations for nuclear power plants or the types of reactors used. The entire system consisted of cajolery, boasting, deception, nepotism and the persecution of dissidents.

Andrei Gromyko (president): We have never discussed such things here in the politburo. But the consequences of Chernobyl for the people are like those following a medium-sized war. We must prohibit the construction of nuclear power plants in densely populated areas immediately. Don't we have enough space? We are not Belgium or Japan . There will never be absolute certainty with these power plants. But we are even building them in the Crimea ! In fact, we should shut down all the plants in the European part of the country.

On Oct. 2, during a final discussion about Chernobyl, Gorbachev did in fact announce a partial phase-out for the nuclear industry. The 15 remaining Chernobyl-type reactors were to be "shut down immediately," the Kremlin leader said, "including the ones in Smolensk, Leningrad and Kursk."

But the reactors in all three of these nuclear power plants are still in operation today. And this despite the fact that the Leningrad nuclear plant, which lies only 70 kilometers (44 miles) from St. Petersburg, a city of 5 million, narrowly escaped disaster in 1992, when a leak occurred in the cooling system for unit 3.

Driven to Suicide

According to the minutes, nuclear scientist Valery Legasov spoke up only once during the July politburo meeting. He said what he had been preaching for years, namely that the Chernobyl reactor model did not satisfy safety requirements in all key parameters. But no one had believed him until then.

It was probably the hypocrisy of the party leadership, which assigned sole blame for the accident to plant personnel, that drove Legasov to suicide. He killed himself on the day before he was due to present the results of the investigation of the Chernobyl disaster to the politburo.

 Translated from the German by Christopher Sultan

(10) Fukushima engineer admits flawed steel in Reactor 4 is a 'time bomb'

From: Paul de Burgh-Day <pdeburgh@harboursat.com.au> Date: 30.03.2011 04:19 AM

Fukushima Engineer Says He Helped Cover Up Flaw at Dai-Ichi Reactor No. 4

http://www.bloomberg.com/news/2011-03-23/fukushima-engineer-says-he-covered-up-flaw-at-shut-reactor.html

By Jason Clenfield - Wed Mar 23 00:54:50 GMT 2011

One of the reactors in the crippled Fukushima nuclear plant may have been relying on flawed steel to hold the radiation in its core, according to an engineer who helped build its containment vessel four decades ago.

Mitsuhiko Tanaka says he helped conceal a manufacturing defect in the $250 million steel vessel installed at the Fukushima Dai-Ichi No. 4 reactor while working for a unit of Hitachi Ltd. (6501) in 1974. The reactor, which Tanaka has called a "time bomb,"was shut for maintenance when the March 11 earthquake triggered a 7-meter (23-foot) tsunami that disabled cooling systems at the plant, leading to explosions and radiation leaks.

"Who knows what would have happened if that reactor had been running?"Tanaka, who turned his back on the nuclear industry after the Chernobyl disaster, said in an interview last week. "I have no idea if it could withstand an earthquake like this. It's got a faulty reactor inside."

Tanaka's allegations, which he says he brought to the attention of Japan's Trade Ministry in 1988 and chronicled in a book two years later called "Why Nuclear Power is Dangerous,"have resurfaced after Japan's worst nuclear accident on record. The No. 4 reactor was hit by explosions and a fire that spread from adjacent units as the crisis deepened.

No Safety Problem

Hitachi spokesman Yuichi Izumisawa said the company met with Tanaka in 1988 to discuss the work he did to fix a dent in the vessel and concluded there was no safety problem. "We have not revised our view since then,"Izumisawa said.

Kenta Takahashi, an official at the Trade Ministry's Nuclear and Industrial Safety Agency, said he couldn't confirm whether the agency's predecessor, the Agency for Natural Resources and Energy, had conducted an investigation into Tanaka's claims. Naoki Tsunoda, a spokesman at Tokyo Electric Power Co., which owns the plant, said he couldn't immediately comment.

Tanaka, who said he led the team that built the steel vessel, was at his apartment on Tokyo's outskirts when Japan's biggest earthquake on record struck off the coast on March 11, shaking buildings in the nation's capital.

"I grabbed my wife and we just hugged,"he said. "I thought this is it: we're dead."

For Tanaka, the nightmare intensified the next day when a series of explosions were triggered next to the reactor that he helped build. Since then, the risks of radioactive leaks increased as workers have struggled to bring the plant under control.

Fukushima No. 4

Tanaka says the reactor pressure vessel inside Fukushima's unit No. 4 was damaged at a Babcock-Hitachi foundry in Kure City, in Hiroshima prefecture, during the last step of a manufacturing process that took 2 1/2 years and cost tens of millions of dollars. If the mistake had been discovered, the company might have been bankrupted, he said.

Inside a blast furnace the size of a small airplane hanger the reactor pressure vessel was being treated one last time to remove welding stress. The cylinder, 20 meters tall and 6 meters in diameter, was heated to more than 600 degrees Celsius (1,112 degrees Fahrenheit), a temperature that softens metal.

Braces that were supposed to have been placed inside during the blasting were either forgotten or fell over when the cylinder was wheeled into the furnace. After the vessel cooled, workers found that its walls had warped, Tanaka said.

Warped Walls

The vessel had sagged so that its height and width differed by more than 34 millimeters, meaning it should have been scrapped, according to nuclear regulations. Rather than sacrifice years of work and risk the company's survival, Tanaka's boss asked him to reshape the vessel so that no-one would know it had ever been damaged. Tanaka had been working as an engineer for the company's nuclear reactor division and was known for his programming skills.

"I saved the company billions of yen,"said Tanaka, who says he was paid a 3 million yen bonus and presented with a certificate acknowledging his "extraordinary"effort. "At the time, I felt like a hero,"he said.

Over the course of a month, Tanaka said he made a dozen nighttime trips to an International Business Machines Corp. office 20 kilometers away in Hiroshima where he used a super- computer to devise a repair.

Meanwhile, workers covered the damaged vessel with a sheet, Tanaka said. When Tokyo Electric sent a representative to check on their progress, Hitachi distracted him by wining and dining him, according to Tanaka. Rather than inspecting the part, they spent the day playing golf and soaking in a hot spring, he said.

Wining and Dining

"The guy wouldn't have known what he was looking at anyway,"Tanaka said. "The people at the utility have no idea how the parts are made."

After a month of computer modeling, Tanaka came up with a way to use pumpjacks to pop out the sunken wall. While it would look like nothing had ever happened, no-one knew what the effect of the repair would have on the integrity of the vessel. Thirty- six years later, that reactor pressure vessel is the key defense protecting the core of Fukushima's No. 4 reactor.

"These procedures, as they're described, are far from ideal, especially for a component as critical as this," Robert Ritchie, Professor of Materials Science & Engineering at the University of California of Berkeley, said in a phone interview. "Depending on the extent of vessel's deformation, it could possibly lead to local cracking in some of its welds."

Chernobyl Breakdown

Tanaka quit Babcock-Hitachi in 1977, when he was 34 years old and became a writer. A graduate of Tokyo Institute of Technology, his Japanese-language books include "Options in Complex Systems: Natural Science and Economics on the Edge of Chaos,"and a book for young adults called, "How do we Know the Earth is Moving?"

After the meltdown at Chernobyl in 1986, Tanaka was asked to narrate a Russian movie documenting the disaster. A team of Soviet filmmakers had taken 30 hours of footage inside the plant, getting very close to the ruptured core. The movie's director died of radiation poisoning about a year after the filming. While watching the footage, Tanaka had a breakdown.

"All of a sudden I was sobbing and I started to think about what I'd done,"Tanaka said. "I was thinking, 'I could be the father of a Japanese Chernobyl.'"

Two years later Tanaka says he went to the Trade Ministry to report the cover-up he'd been involved in more than a decade earlier. The government refused to investigate and Hitachi denied his accusations, he said.

"They said, if Hitachi says they didn't do it, then there's no problem,"Tanaka said. "Companies don't always tell the truth."

To contact the reporter on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net

To contact the editor responsible for this story: Peter Langan at plangan@bloomberg.net

(11) French nuclear industry tried to stop switch from Uranium to Thorium reactors

From: Tim OSullivan <timos2003z@hotmail.com> Date: 30.03.2011 12:00 AM

http://theweek.com/article/index/213611/could-thorium-make-nuclear-power-safe

Could thorium make nuclear power safe?

The world can have cheap nuclear power without Japan-level risks by swapping thorium for uranium, some scientists claim. Is that too good to be true?

POSTED ON MARCH 28, 2011, AT 11:03 AM

{photos} Some scientists say we can save time and increase safety by replacing uranium-based reactors (like the Vogtle nuclear power plant in Georgia, above) with ones focused on thorium. Photo: CC BY: Blatant World SEE ALL 11 PHOTOS {end}

Japan's escalating disaster at its Fukushima reactors is putting a damper on the nuclear power industry, just as nuclear energy was starting to bask in a post-Chernobyl glow. But instead of giving up on nuclear power, say an "almost cult-like" group of nuclear scientists, we should just switch from uranium-based reactors to ones fueled by cheaper, safer thorium. What is this miracle metal — and could it really bring us safe nuclear power?

What is thorium?

A silvery metal (symbol: Th; atomic number: 90) close to uranium on the periodic table of elements, with just two fewer protons. It was discovered in 1828, and is named after the Norse god of thunder. As an added bonus, it's "almost as common as dirt," says Antonia Zerbisias in The Toronto Star.

Why are fans so excited about it?

Thorium-fueled reactors are supposed to be much safer than uranium-powered ones, use far less material (1 metric ton of thorium gets as much bang as 200 metric tons of uranium, or 3.5 million metric tons of coal), produce waste that is toxic for a shorter period of time (300 years vs. uranium's tens of thousands of years), and is hard to weaponize. In fact, thorium can even feed off of toxic plutonium waste to produce energy. And because the biggest cost in nuclear power is safety, and thorium reactors can't melt down, argues Michael Anissimov in Accelerating Future, they will eventually be much cheaper, too.

How cheap would it be?

If a town of 1,000 bought a 1-megawatt thorium reactor for $250,000, using 20 kilograms of thorium a year with almost no oversight, every family could pay as little as $0.40 a year for all their electricity, Anissimov predicts. And small reactors like that aren't just potentially cost-effective, he says; they're much safer, too.

Where can we get thorium?

Lots of places. The U.S. has an estimated 440,000 metric tons, Australia and India have about 300,000 metric tons, and Canada has 100,000 metric tons. Until recently, U.S. and Australian mining companies threw it away as a useless byproduct. There is enough thorium to power the earth for about 1,000 years, boosters say, versus an estimated 80 years' worth of uranium.

If thorium's so great, why do we use uranium?

To make a "long story very short and simple," says The Star's Antonia Zerbisias, weapons and nuclear subs. U.S. researchers were developing both uranium-based and thorium-based reactors in the Cold War 1950s, but thorium doesn't create weapons-grade plutonium as a byproduct. Plus, nuclear submarines could be designed more easily and quickly around uranium-based light-water reactors.

OK, but there must be a downside to thorium, right?

Indeed. First, it will take a lot of money to develop a new generation of thorium-fueled reactors — America's has been dormant for half a century. China is taking the lead in picking up the thread, building on plans developed and abandoned in Europe. And part of the reason Europe dropped the research, according to critics, is pressure from France's uranium-based nuclear power industry. Others just think the whole idea is being oversold. If "an endless, too-cheap-to-meter source of clean, benign, what-could-possibly-go-wrong energy" sounds too good to be true, says nuclear analyst Norm Rubin, it's because it is.

Sources: Toronto Star, Telegraph, EconProph, Accelerating Future

(12) Chernobyl sarcophagus at end of its life; lessons for Fukushima
http://www.businessweek.com/magazine/content/11_15/b4223057775248.htm

March 31, 2011, 5:00PM EST

A Chernobyl Lesson for Fukushima

The Russian nuclear plant is undergoing a state-of-the-art containment that could provide lessons for the Japanese plant

Gleb Garanich/Reuters/Corbis

By Steve Featherstone

The challenges for Japanese authorities at the Fukushima Dai-Ichi nuclear power station remain grave. With potentially fatal radioactive material leaking from the stricken plants, it will take weeks or months for workers to stabilize the facility and know how much nuclear fuel is damaged in the reactors and spent fuel pools. Only then can the cleanup begin.

"It isn't a week endeavor or a month endeavor, it's a years endeavor to do this work," says Kurt Kehler, vice-president of CH2M Hill, a company that decommissions and demolishes nuclear power plants around the world. CH2M Hill is mothballing the Hanford facility in Washington State, which produced plutonium for the Manhattan Project. The company was also among the bidders to build a steel hangar to contain radiation from Chernobyl, a project now being built by Novarka, a consortium of French contractors.

"There's two different things you're concerned with in the nuclear cleanup business," Kehler adds. "One is contamination and one is radiation, and they're completely different." Nuclear fuel rods emanate radiation; particles of fallout create radioactive contamination of land or objects.

Fukushima is unlikely to reach Chernobyl levels in either category, but the problems faced there still hold lessons. When the Chernobyl reactor blew, deadly radiation emanating from its smoldering core and radioactive fallout blanketed the site, thwarting attempts to seal it off. In a desperate measure, the Soviets entombed the reactor within a concrete shell, or sarcophagus, while they figured out a better way to dispose of the molten nuclear fuel deep inside. The sarcophagus was designed to last 10 years. That was 25 years ago. Now it's dangerously unstable.

"It was never a really well-put-together structure," says Laurin Dodd, a manager at the Chernobyl plant for the last five years. "There's large openings in it the size of picture windows with small mammals going in and out, and birds going in and out." As the managing director for the Shelter Implementation Plan, Dodd works for the Ukrainian government overseeing Novarka's construction of the New Safe Confinement (NSC), a 345-foot-high steel hangar that, when completed in 2015, will cover the crumbling sarcophagus. Radiation levels directly over the sarcophagus are too high for the arch to be built in place. Instead, it will be erected piecemeal in a nearby "assembly zone" and slid over the sarcophagus on rails.

While radiation levels are lower in the assembly zone, the ground around the plant is a radioactive minefield that sometimes brings work to a halt. Crews digging holes for concrete and steel pilings to anchor the rails have struck highly contaminated equipment buried by the Soviets. "Caterpillars, cranes, trucks, just about anything you can imagine," Dodd says. "Occasionally there are pieces of fuel that were blown out of the reactor during the accident."

With excavation work nearly finished, crews will soon begin pouring concrete platforms to hold the cranes that will eventually lift the arch segments into place. Blueprints for the arch have yet to be approved by Ukrainian regulators, and designing it "has been a bit painful, because it's the first of its kind, and it's unique and huge," says Sean Evans, operation leader for the €1.5 billion Chernobyl Shelter Fund at the European Bank for Reconstruction and Development (EBRD), the NSC plan's administrator. It's not only the massive size of the arch that makes it unique, or the fact that it's being assembled in one of the most contaminated places on the planet, but rather its purpose. It's much more complicated than an oversized steel barn. "Confinement is but one of its jobs," Evans says. "It's really an integrated decommissioning facility."

When EBRD eventually hands over the NSC's keys to Ukrainian authorities, workers will begin the monumental task of decommissioning Chernobyl. Remote-operated cranes attached to the underside of the arch will dismantle the leaky sarcophagus, block by block, revealing the scorched wreckage of the reactor building. At the time of the accident, about 200 tons of nuclear fuel melted straight through the building and flowed into the basement, forming blob-like configurations that Chernobyl technicians have given colorful names, such as "the elephant's foot." Ultimately the entire reactor building will be demolished, the elephant's foot chiseled away, and the whole radioactive mess carted off and buried. For the duration of this delicate operation, which could take decades, humidity inside the hangar must be maintained at a low 40 percent to prevent corrosion of its steel frame. The Ukrainians will have plenty of time to get the job done, since the container is designed to last 100 years.

Once the Japanese get the reactors at Fukushima under control, they will face many of the same challenges: keeping workers safe in a highly radioactive environment and preventing radioactive material from leaking into the water or atmosphere. Some problems will be unique to Fukushima. For instance, how will damaged fuel rods be extracted from the reactor vessels and spent fuel pools?

Kehler of CH2M Hill speculates that the Japanese won't require anything quite so big or complicated as Chernobyl's to shelter the reactor buildings while they're pulling the fuel out of them. "They would build another secondary containment," says Kehler, "a light steel shelter around the buildings." In other words, the reactor buildings may end up looking much the way they did almost three weeks ago, before the name Fukushima became synonymous with the phrase "nuclear disaster."

The bottom line: The ongoing containment challenges faced at Chernobyl may hold lessons for Japan's damaged Fukushima nuclear plant.

Featherstone is a Bloomberg Businessweek contributor

(13) Japan Times editor alleges secret Nuke program at Fukushima

From: Paul de Burgh-Day <pdeburgh@harboursat.com.au> Date: 19.04.2011 01:56 AM

Secret Weapons Program Inside Fukushima Nuclear Plant?

U.S.-Japan security treaty fatally delayed nuclear workers' fight against meltdown

by Yoichi Shimatsu

http://www.globalresearch.ca/index.php?context=va&aid=24275

April 12, 2011

Fourth Media (China) - 2011-04-11

http://nation.foxnews.com/culture/2011/04/08/japans-elite-hiding-weapons-program-inside-nuclear-plants
http://newamericamedia.org/2011/04/is-japans-elite-hiding-a-weapons-program-inside-nuclear-plants.php

Confused and often conflicting reports out of Fukushima 1 nuclear plant cannot be solely the result of tsunami-caused breakdowns, bungling or miscommunication. Inexplicable delays and half-baked explanations from Tokyo Electric Power Company (TEPCO) and the Ministry of Economy, Trade and Industry (METI) seem to be driven by some unspoken factor.

The smoke and mirrors at Fukushima 1 seem to obscure a steady purpose, an iron will and a grim task unknown to outsiders. The most logical explanation: The nuclear industry and government agencies are scrambling to prevent the discovery of atomic-bomb research facilities hidden inside Japan's civilian nuclear power plants.

A secret nuclear weapons program is a ghost in the machine, detectable only when the system of information control momentarily lapses or breaks down. A close look must be taken at the gap between the official account and unexpected events.

Conflicting Reports

TEPCO, Japan’s nuclear power operator, initially reported three reactors were operating at the time of the March 11 Tohoku earthquake and tsunami. Then a hydrogen explosion ripped Unit 3, run on plutonium-uranium mixed oxide (or MOX). Unit 6 immediately disappeared from the list of operational reactors, as highly lethal particles of plutonium billowed out of Unit 3. Plutonium is the stuff of smaller, more easily delivered warheads.

A fire ignited inside the damaged housing of the Unit 4 reactor, reportedly due to overheating of spent uranium fuel rods in a dry cooling pool. But the size of the fire indicates that this reactor was running hot for some purpose other than electricity generation. Its omission from the list of electricity-generating operations raises the question of whether Unit 4 was being used to enrich uranium, the first step of the process leading to extraction of weapons-grade fissionable material.

The bloom of irradiated seawater across the Pacific comprises another piece of the puzzle, because its underground source is untraceable (or, perhaps, unmentionable). The flooded labyrinth of pipes, where the bodies of two missing nuclear workers—never before disclosed to the press— were found, could well contain the answer to the mystery: a lab that none dare name. ...

Cut Off From Communications

The substance of undisclosed talks between Tokyo and Washington can be surmised from disruptions to my recent phone calls to a Japanese journalist colleague. While inside the radioactive hot zone, his roaming number was disconnected, along with the mobiles of nuclear workers at Fukushima 1 who are denied phone access to the outside world. The service suspension is not due to design flaws. When helping to prepare the Tohoku crisis response plan in 1996, my effort was directed at ensuring that mobile base stations have back-up power with fast recharge.

A subsequent phone call when my colleague returned to Tokyo went dead when I mentioned "GE." That incident occurred on the day that GE’s CEO Jeff Immelt landed in Tokyo with a pledge to rebuild the Fukushima 1 nuclear plant. Such apparent eavesdropping is only possible if national phone carrier NTT is cooperating with the signals-intercepts program of the U.S. National Security Agency (NSA).

The Manchurian Deal

The chain of events behind this vast fabrication goes back many decades.

During the Japanese militarist occupation of northeast China in the 1930s, the puppet state of Manchukuo was carved out as a fully modern economic powerhouse to support overpopulated Japan and its military machine. A high-ranking economic planner named Nobusuke Kishi worked closely with then commander of the occupying Kanto division, known to the Chinese as the Kwantung Army, General Hideki Tojo.

Close ties between the military and colonial economists led to stunning technological achievements, including the prototype of a bullet train (or Shinkansen) and inception of Japan's atomic bomb project in northern Korea. When Tojo became Japan's wartime prime minister, Kishi served as his minister of commerce and economy, planning for total war on a global scale.

After Japan's defeat in 1945, both Tojo and Kishi were found guilty as Class-A war criminals, but Kishi evaded the gallows for reasons unknown—probably his usefulness to a war-ravaged nation. The scrawny economist’s conception of a centrally managed economy provided the blueprint for MITI (Ministry of International Trade and Industry), the predecessor of METI, which created the economic miracle that transformed postwar Japan into an economic superpower.

After clawing his way into the good graces of Cold Warrior John Foster Dulles, Eisenhower's secretary of state, Kishi was elected prime minister in 1957. His protégé Yasuhiro Nakasone, the former naval officer and future prime minister, spearheaded Japan's campaign to become a nuclear power under the cover of the Atomic Energy Basic Law.

American Complicity

Kishi secretly negotiated a deal with the White House to permit the U.S. military to store atomic bombs in Okinawa and Atsugi naval air station outside Tokyo. (Marine corporal Lee Harvey Oswald served as a guard inside Atsugi's underground warhead armory.) In exchange, the U.S. gave the nod for Japan to pursue a "civilian" nuclear program. ...

On his 1959 visit to Britain, Kishi was flown by military helicopter to the Bradwell nuclear plant in Essex. The following year, the first draft of the U.S.-Japan security was signed, despite massive peace protests in Tokyo. Within a couple of years, the British firm GEC built Japan's first nuclear reactor at Tokaimura, Ibaragi Prefecture. At the same time, just after the 1964 Tokyo Olympics, the newly unveiled Shinkansen train gliding past Mount Fuji provided the perfect rationale for nuclear-sourced electricity.

Kishi uttered the famous statement that "nuclear weapons are not expressly prohibited" under the postwar Constitution's Article 9 prohibiting war-making powers. His words were repeated two years ago by his grandson, then Prime Minister Shinzo Abe. The ongoing North Korea "crisis" served as a pretext for this third-generation progeny of the political elite to float the idea of a nuclear-armed Japan. Many Japanese journalists and intelligence experts assume the secret program has sufficiently advanced for rapid assembly of a warhead arsenal and that underground tests at sub-critical levels have been conducted with small plutonium pellets.

Sabotaging Alternative Energy

The cynical attitude of the nuclear lobby extends far into the future, strangling at birth the Japanese archipelago's only viable source of alternative energy—offshore wind power. Despite decades of research, Japan has only 5 percent of the wind energy production of China, an economy (for the moment, anyway) of comparable size. Mitsubishi Heavy Industries, a nuclear-power partner of Westinghouse, manufactures wind turbines but only for the export market.

The Siberian high-pressure zone ensures a strong and steady wind flow over northern Japan, but the region's utility companies have not taken advantage of this natural energy resource. The reason is that TEPCO, based in Tokyo and controlling the largest energy market, acts much as a shogun over the nine regional power companies and the national grid. Its deep pockets influence high bureaucrats, publishers and politicians like Tokyo Governor Shintaro Ishihara, while nuclear ambitions keep the defense contractors and generals on its side. Yet TEPCO is not quite the top dog. Its senior partner in this mega-enterprise is Kishi's brainchild, METI.

The national test site for offshore wind is unfortunately not located in windswept Hokkaido or Niigata, but farther to the southeast, in Chiba Prefecture. Findings from these tests to decide the fate of wind energy won't be released until 2015. The sponsor of that slow-moving trial project is TEPCO.

Death of Deterrence

Meanwhile in 2009, the International Atomic Energy Agency (IAEA) issued a muted warning on Japan's heightened drive for a nuclear bomb— and promptly did nothing. The White House has to turn a blind eye to the radiation streaming through American skies or risk exposure of a blatant double standard on nuclear proliferation by an ally. Besides, Washington's quiet approval for a Japanese bomb doesn't quite sit well with the memory of either Pearl Harbor or Hiroshima.

In and of itself, a nuclear deterrence capability would be neither objectionable nor illegal— in the unlikely event that the majority of Japanese voted in favor of a constitutional amendment to Article 9. Legalized possession would require safety inspections, strict controls and transparency of the sort that could have hastened the Fukushima emergency response. Covert weapons development, in contrast, is rife with problems. In the event of an emergency, like the one happening at this moment, secrecy must be enforced at all cost— even if it means countless more hibakusha, or nuclear victims.

Instead of enabling a regional deterrence system and a return to great-power status, the Manchurian deal planted the time bombs now spewing radiation around the world. The nihilism at the heart of this nuclear threat to humanity lies not inside Fukushima 1, but within the national security mindset. The specter of self-destruction can be ended only with the abrogation of the U.S.-Japan security treaty, the root cause of the secrecy that fatally delayed the nuclear workers' fight against meltdown

Yoichi Shimatsu, a Hong Kong–based environmental writer, is the former editor of the Japan Times Weekly.



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2 comments:

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  2. Reading this blog makes me feel good for Japanese manufacturing company, like PAPTI in the Philippines. We cannot blame them if they are to shut down. There is no one who likes what happened. It is mother nature that caused the disasters. It is just like a domino effect.

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