Japan Economy Shrinks on Export Slump
'Japanís economy shrank an annualized 2.3 percent in the fourth quarter as exports slid, the biggest decline since a record earthquake dragged down growth in the first three months of last year.
The contraction compared with the median forecast for a 1.3 percent decline in a Bloomberg News survey of 26 economists. Growth was a revised 7 percent in the previous quarter, the Cabinet Office said today in Tokyo.
Todayís report bolsters the case for Bank of Japan (8301) officials, meeting today and tomorrow, to consider more monetary easing as gains in the yen pare export earnings, worsening losses for companies such as Sony Corp. (675 Manufacturers have also been hurt by flooding in Thailand that disrupted production, while energy imports because of nuclear shutdowns led to the first annual trade deficit since 1980.'
well thats what you get when you follow keynessian crap LOL
Originally Posted by bacardi
I did not realize that earthquakes and tsunamis and nuclear meltdowns were Keynesian phenomena. Thanks for clearing that up for me.
The OP was about this past year and so was my comment.
Originally Posted by bacardi
You are changing the subject but even so you greatly misunderstand Japan's position. Japan has massive foreign reserves and is an essential source of funding for worldwide economic growth. Unlike the US and many other nations, Japan's sovereign debt, while large is not much of a concern outside Japan since it is held almost entirely by Japanese.
Japan has a trade surplus with China. Its medium term economic prospects are far better than either the US or the EU. The BOJ has had to intervene in the currency markets recently to reduce the value of the Yen as panicky investors fled to the Yen as a safe haven.
Japan's lack of high economic growth is not that big of a problem because the population is shrinking and Japan continues to innovate and its manufacturing exports are very high value. Japan also receives a lot of income from its overseas manufacturing investments and that will continue to grow and keep the balance of payments in Japan's favor even when manufacturing exports decline.
But my comment was about Japan in general. And so was bacardi's reply to it (since Keynesianism would take years to strongly affect an economy to that extent) - which you were commenting on.
Originally Posted by unrealist42
And as for most of Japan's debt being owned by it's citizens?
That is a bad thing, not a good thing.
Foreign debt you can default on.
Domestic debt you cannot.
If America defaulted eventually on it's debt (which I assume they will), all the foreign owned debt is not going to bother average American's one little bit if foreigner's have to eat it.
But if Japan's gov't. defaults on the money it owes it's citizens - they will freak out (sedately - they are Japanese after all). And those in power can kiss their cushy jobs bye bye.
So Japan's gigantic debt that keeps growing MUST be paid off or they will end up screwing the population.
Last edited by DA60; Feb 13 2012 at 05:30 PM.
Feb 13 2012, 08:05 PM
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.
Last edited by bacardi; Feb 13 2012 at 08:06 PM.
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