Thread: Japan Economy Shrinks on Export Slump

Originally Posted by bacardi

yup....da60 and I know that japan is in nowhere near as much trouble as the US is in.....but still with almost 200% debt to GDP they stil can do better. Yes Japan has a high savings rate and huge foreign exchange reserves but that dont mean they can spend as wrecklessly as they want.

You are right.....the US is in MUCH more trouble than any other country when looking at size and scope. When the dollar fails....war I would imagine. Actually...war might precede the collapse of the dollar to try and prevent just that.

China, russia, brazil I would imagine.

The main reason that Japan's exports have been declining is the competition with China. Growth in China means decline in Japan. Many Japanese manufacturing jobs are also be outsourced to China, which does not help.

Many Japanese people are suffering, and this suffering is unnecessarily so because housing prices have continued to remain at stubbornly high levels. Most of the wealth in Japan is held by the older generation that worked during former times of greater economi growth and opportunity.

I do not think the outside world actually realises how bad some of the Japanese are suffering. The cost of living is very expensive, many Japanese are now homeless (and this was before the tsunami). The tsunami will be especially hard to bare because many people have lost houses that they will never be able to afford to buy again. And it is not easy for one to switch to a new job in Japan, at least not a decent paying one with benefits. Those people in the tsunami lost not just their homes but their jobs.

Is the USA heading the way of Japan?
struggle of Japan's working poor (documentary)

japan needs to stop this keynessian nonsence and let house prices fall and let the zombie banks fail!

Originally Posted by bacardi

japan needs to stop this keynessian nonsence and let house prices fall and let the zombie banks fail!

I agree...

I am very much against the government trying to artificially prop up housing prices or stock prices. It is effectively making working taxpayers subsidise the owners of wealth.
http://articles.businessinsider.com/...t-house-buyers

But I am not sure that this is what is happening now in Japan.
But you can read about the what the government did in the 1980's:
http://wiki.mises.org/wiki/Japanese_asset_price_bubble

I am a supporter of centrally planned economic activity, where the government directly controls certain corporations. But I am very much against government "intervention" in the private market. Policy makers just have no idea what they are doing, and it often hurts some people to benefit another small group of people.

'Japan posted a record trade deficit in January as the yen’s strength and weaker global demand eroded manufacturers’ profits and slowed the nation’s recovery from last year’s earthquake and tsunami.
The gap widened to 1.48 trillion yen ($19 billion) and shipments dropped 9.3 percent from a year earlier as energy imports surged, a Ministry of Finance reported in Tokyo today. The median estimate of 28 economists surveyed by Bloomberg News was for a shortfall of 1.46 trillion yen.'

http://www.bloomberg.com/news/2012-0...rth-month.html

Originally Posted by DA60

'Japan posted a record trade deficit in January as the yen’s strength and weaker global demand eroded manufacturers’ profits and slowed the nation’s recovery from last year’s earthquake and tsunami.
The gap widened to 1.48 trillion yen ($19 billion) and shipments dropped 9.3 percent from a year earlier as energy imports surged, a Ministry of Finance reported in Tokyo today. The median estimate of 28 economists surveyed by Bloomberg News was for a shortfall of 1.46 trillion yen.'

http://www.bloomberg.com/news/2012-0...rth-month.html

japan is suffeing just so that they can keep buying treasuries......its so stupid. Stop buying treasuries and let the zombie banks fail.....sure there will be 2 years of pain, but then the economy should rebound and be much stronger

Originally Posted by bacardi

japan is suffeing just so that they can keep buying treasuries......its so stupid. Stop buying treasuries and let the zombie banks fail.....sure there will be 2 years of pain, but then the economy should rebound and be much stronger

That - IMO - is the entire problem with Keynesianism.

It's all about spending gigantic amounts of money just to try and avoid a few months of discomfort.

It's like a drug addict who tries everything to quit but the one tried and true (and uncomfortable) method...quit cold turkey.

It hurts more in the short term, but is FAR better in the long term.


I'll just say it...Keynesianism is for wimps.

Sorry to sound rude...but it is.

Mooches and wimps.

the problem also with most people is that they want the easy way out. They want the gain but without the pain. It dont work that way. Like you said...the best way to quit is cold turkey. Well....thats what a recession is.....cold turkey way to get over the drug ( cheap money and credit) the recession is the hangover which is necessary to cure the drug dependance ( cheap money) otherwise you overdose and die.....( hyper-inflation)

Keynesianism is when the government SAVES money in the good times and spends it in the bad. I do not think continually getting into more and more debt was what Keynes had in mind.

Borrowing more money is not going to help. It will have to be paid off with interest in the future. Some economists imagine a magical cycle where the economy will eventually get "better".