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Bank of Japan, in a Surprise, Adopts Negative Interest Rate

nytimes.com

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Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#161

Post by oldmanjay »

mistermann wrote: post #98
aikah wrote: post #72

Earlier quoted context omitted.

> Japan needs to bite the bullet and accept immigration. Immigration isn't going to solve anything, immigration from where ? Japan isn't the US, they aren't talking English nor their society is build in a way it can accept huge immigration waves. Japan needs to work on techs that will solve its problems, not resort to a massive immigration wave that will only kick the can down the road.

Not to mention the change immigration could potentially cause in day to day life. In my opinion one of the best things about Japan is the homogeneous and pleasant (in most but not all ways) culture - if I lived there voting for increased immigration would be one of the absolute last resort measures I would vote for.

That homogeneous and mostly pleasant culture is killing itself, apparently. We may get to witness a nation commit suicide, which ought to be interesting from the outside.

I hope the insularity ends up being worth it for them, but history is not on their side.

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#162

Post by uremog »

mc32 wrote: post #149
woodpanel wrote: post #67

Maybe OT: Isn't this just proof that Japan needs to let go of it's biggest barrier to growth? By which I mean it's non-existing immigration? I've been recently to Japan and despite my fears Tokio was a really affordable place (leaving out the hotel prices of course). I thought this was due to the lack of growth and the recent quantitative easing and other government measures. Measurements that seem to be failing at t…

It seems their calculus is: Growth but at the risk of it not being Japan on its own terms (importing culture) No growth but at least it's their own no growth (no imported population). Japan being the nation and a people seeking harmony, I don't think they'd make the deal and risk losing their wa. And you know what, good on them and good for the test of the world. I'd like to see how a country tackles no growth while…

And if it goes badly, just as well for me! I'd love to take a cheap vacation to Japan.

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#163

Post by jessriedel »

jahnu wrote: post #159
jessriedel wrote: post #118

Earlier quoted context omitted.

What time period are you talking about? In 1991, per capita GDP in US and Japan were both ~$32k in 2005 USD. But now it's ~$38k for Japan and $47k for US. http://www.tradingeconomics.com/united-states/gdp-per-capita http://www.tradingeconomics.com/japan/gdp-per-capita

Household disposable income looks normal enough https://data.oecd.org/hha/household-disposable-income.htm

Zoom out to include 1995 (the limits of Japanese data for your source). Japan is mid-tier for growth in household disposable income 2010-2014, but consistently among the very slowest growing countries from 1995-2009. This is a difference of 1% average growth vs. 3% average growth across 15 years. That is a huge difference (16% vs. 56% cumulative growth), and very consistent with my claims about the stark disparity between the US and Japan in per capita GDP today.

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#165

Post by _nedR »

yuiyui wrote: post #123
oblio wrote: post #116

Earlier quoted context omitted.

Mmmm... the Japanese have problems even reintegrating Japanese Brazilians, i.e. Japanese who have moved to Brazil. That reeks more of Japanese xenophobia than of some "Western imperialist racist conspiracy" to destabilize Japan.

> Mmmm... the Japanese have problems even reintegrating Japanese Brazilians, That's no problem of the Japanese, but of the immigrants. They're the newcomers, they're the ones who should be putting all the effort to assimilate into the host culture. And it isn't happening, not even with descendants of Japanese. Imagine what would happen with a radically different culture (no need to imagine, just look at Europe).

>"That's no problem of the Japanese, but of the immigrants. They're the newcomers, they're the ones who should be putting all the effort to assimilate into the host culture."

This rigidity and inflexibility is going to be the biggest problem facing Japan when they inevitability reach the population cliff. What you are asking for is unreasonable. There is no way immigrants can ever completely assimilate to that degree. The cultural gap and linguistic distance is simply to big. It doesn't help that Japan has historically been isolationist and based on anecdotal evidence, still seems to be pretty xenophobic. At best, you could hope for a compromise, where the immigrants do their best to integrate, and hosts make compromises and try to be more accomodating. You could try taking immigrants from nearby regions where the gap is conceivably smaller, but politics and history will get in the way.

Ultimately there seems to be no good solutions on the horizon. You will just have to pick the least worst from a selction of poor ones:-

1. Ignore the problem and see what happens. 2. Begin a reasonable program of immigration that suits Japan (there are number of ways to go about this), and deal with the problems that will come with it. 3. Try and hope for some technological breakthrough.

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#166

Post by jevgeni »

ifdefdebug wrote: post #158
jevgeni wrote: post #129

Earlier quoted context omitted.

No. To be clear: I used sarcasm[1] to highlight the in my opinion ridiculous preferences of HN readership. ___ [1] - https://en.wikipedia.org/wiki/Sarcasm

I see. And of course I take that wikipedia link to sarcasm for sarcasm. Anyway, the heavy discussion around this post seems to disprove your point making your sarcasm harder to spot.

Yeah, it's very silly.

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#167

Post by brobinson »

oldmanjay wrote: post #161
mistermann wrote: post #98

Earlier quoted context omitted.

Not to mention the change immigration could potentially cause in day to day life. In my opinion one of the best things about Japan is the homogeneous and pleasant (in most but not all ways) culture - if I lived there voting for increased immigration would be one of the absolute last resort measures I would vote for.

That homogeneous and mostly pleasant culture is killing itself, apparently. We may get to witness a nation commit suicide, which ought to be interesting from the outside. I hope the insularity ends up being worth it for them, but history is not on their side.

>That homogeneous and mostly pleasant culture is killing itself, apparently.

No, this is literally the post-WW2 boom dying off. Occupied Japan underwent a period of extreme population growth in the few decades after WW2 ended. They currently have 125mm people living in a land area the size of California which is 75% uninhabitable (mountains).

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#168

Post by _nedR »

SolaceQuantum wrote: post #131
yuiyui wrote: post #125

Earlier quoted context omitted.

> By which I mean it's non-existing immigration? That's not a bug, it's a feature. Japan enjoys the advantages of having a civilized, educated, homogeneous, high trust society, and they're not willing to abandon that in exchange of what, low skilled workers they don't need and ethnic conflict?

I think that the parent specifically mentioned highly skilled young workers who would be attracted by the modern lifestyle in Tokyo.

I dont think high skilled young workers, will be looking forward to taking care of the large number of old people, when Japan hits its population cliff. That probably will be a big sector demanding immigration.

Re: Bank of Japan, in a Surprise, Adopts Negative Interest Rate

#169

Post by toomuchtodo »

ddeck wrote: post #160
jahnu wrote: post #156

Earlier quoted context omitted.

They borrowed it mostly from themselves though which makes it more complicated and much less of a problem than it might at first appear.

I doubt the average Japanese saver would see it that way. I agree, we're not talking about an external default, but monetization is still likely to severely impact the wealth of the middle class.

Compound interest isn't a physical system law though, its a human law. Just because it has worked previously because you could continue to extract productivity from labor does not mean that rule will continue.

What if capital loses its value and no longer earns interest? You can't say its not happening, when central banks are charging interest on capital.

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