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Japan Falls into Recession

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Re: Japan Falls into Recession

#61

Post by gear54rus »

kristofferR wrote: post #35
shard wrote: post #25

Non-paywall WSJ link through Google: https://www.google.co.kr/url?sa=t&rct=j&q=&esrc=s&source=web...

Yeah, this trick works for most paywalled articles out there. Googling the URL/title of the paywalled article will almost always give you access the full article (or at least a copy somewhere else).

What I don't really get is how people on this tech-savvy resource still submit links to sources which go against the very idea of free information.

Can't we just look this up somewhere else instead of encouraging this bullshit paywall behavior? Or is the quality of information that different?

Re: Japan Falls into Recession

#62

Post by vilhelm_s »

ekianjo wrote: post #51
jusben1369 wrote: post #41

Earlier quoted context omitted.

You only have to look at the US and Euro economies post 2008 to see the real world benefits of QE. Europeans went down the austerity route and are stuck with consistently underperforming economy and the threat of deflation. The US has turned the corner and is a job creating machine again including the first real signs of inflationary pressure through rising wages. The most unusual thing I can see about Japan is it's…

> Deflation tells consumers not to buy as you wait 6 months and it'll be cheaper. I live in Japan for many years and I have never seen such thing as deflation here. Prices have remained stable for most items or have increased a little bit. The idea that stuff becomes cheaper as you wait is ludicrous in Japan.

Japan did have deflation, some years in the 90s and most years in the 00s.

See e.g. the curve for 1995-2013: http://www.tradingeconomics.com/japan/consumer-price-index-c... or the "index of all items" here http://www.e-stat.go.jp/SG1/estat/ListE.do?bid=000001033700&...

Re: Japan Falls into Recession

#63

Post by brc »

efjhewjfnkew wrote: post #8
lkrubner wrote: post #5

Earlier quoted context omitted.

But quantitative easing lowers interests, so that people can more easily take out a housing loan, so they can fix the "rotten interior" -- they can replace the rotting wood, they can replace the moldy roof, and by doing so, they stimulate the economy. "Putting a fresh coat of paint on a house" also stimulates the economy. You have chosen some strange metaphors for criticizing an economic program. If your point is tha…

I didn't mean for it to be interpreted too literally. Since QE increases the value of the stock market at the expense of a currency's value, it is actually eating away at the wealth and savings of individuals and redistributing it to stockholders. These stockholders tend to already be quite wealthy themselves. Herein lies the problem. Very wealthy individuals tend to spend a much smaller fraction of their accumulated…

You're right that QE erodes the savings and income of not-rich people - the middle class and the poor.

You're wrong in your theory that accumulated wealth does nothing. In a QE world, the very rich don't sit on cash - that would mean losing money through currency decreases.

There is no such thing as 'wasted capital' - rich people store their wealth in a variety of vehicles - whether in banks (where it is re-lent out for many uses), public stock ( where it is used for company investment and operations), and private investment, such as investing in pre-IPOD start ups and private equity.

Even Apples massive cash hoard is put to good use, somewhere.

What there is a shortage of, is productive investments where lots of capital can be deployed to get a healthy return. This is a function of multiple problems, of which uncertainty is one.

It's a very cartoonish model to imagine a daddy warbucks with a big pile of cash saying 'I just don't have time to spend this'. In actual fact, there would be a team of investment managers saying 'we can't find any good places to invest, so we're letting the bank invest it for us, for the time being'.

The answer to Japan's problems is cutting government spending and debt. This has always been the answer, this will always be the answer, whether you're an individual with 20k in debt or a country with 200b in debt. The key is to realise that there is no magic Keynes multiplier.

Re: Japan Falls into Recession

#64

Post by hindsightbias »

dimitar wrote: post #43

Here is the common ground and controversy between most economists on the situation, I think it is interesting how much common ground there is: The common ground: * The government of Japan faces budget constraints; it cannot tax more than a certain amount and that includes seigniorage (taxing using inflation). * Right now Japan doesn't seem to be immediately close to those constraints since interest rates and inflatio…

> even thought (sic) some of them might agree that B were right

If you have a citation for that, I'd love to read it. But I think cats and dogs will start raining from the sky first.

You don't go anywhere if consumers expect prices to remain the same or deflate.

Re: Japan Falls into Recession

#65

Post by 8ig8 »

gear54rus wrote: post #61
kristofferR wrote: post #35

Earlier quoted context omitted.

Yeah, this trick works for most paywalled articles out there. Googling the URL/title of the paywalled article will almost always give you access the full article (or at least a copy somewhere else).

What I don't really get is how people on this tech-savvy resource still submit links to sources which go against the very idea of free information. Can't we just look this up somewhere else instead of encouraging this bullshit paywall behavior? Or is the quality of information that different?

> Can't we just look this up somewhere else instead of encouraging this bullshit paywall behavior? Or is the quality of information that different?

I honestly don't know, but I think in news, time is a factor.

Use this post as a test: what non-paywall link would you submit?

Re: Japan Falls into Recession

#66

Post by gw »

jusben1369 wrote: post #41
efjhewjfnkew wrote: post #3

Here's the thing: you actually need a strong middle class to buy your products. No amount of artificially inflating the value of the stock market through quantitative easing will give you a healthy economy. QE is like putting a fresh coat of paint on a house with a rotten interior: it makes things look pretty, but the structural integrity of the building is almost non-existent. Employees working themselves to death f…

You only have to look at the US and Euro economies post 2008 to see the real world benefits of QE. Europeans went down the austerity route and are stuck with consistently underperforming economy and the threat of deflation. The US has turned the corner and is a job creating machine again including the first real signs of inflationary pressure through rising wages. The most unusual thing I can see about Japan is it's…

> You only have to look at the US and Euro economies post 2008 to see the real world benefits of QE.

You cannot isolate variables in two separate economies; any conclusions assuming you can are bogus.

Re: Japan Falls into Recession

#67

Post by gear54rus »

8ig8 wrote: post #65
gear54rus wrote: post #61

Earlier quoted context omitted.

What I don't really get is how people on this tech-savvy resource still submit links to sources which go against the very idea of free information. Can't we just look this up somewhere else instead of encouraging this bullshit paywall behavior? Or is the quality of information that different?

> Can't we just look this up somewhere else instead of encouraging this bullshit paywall behavior? Or is the quality of information that different? I honestly don't know, but I think in news, time is a factor. Use this post as a test: what non-paywall link would you submit?

Just above this comment tree, there's a link to BBC: http://www.bbc.com/news/business-30077122

Not sure how they differ since non-paywall wsj link does not work for me (still has paywall in 2 different browsers).

Re: Japan Falls into Recession

#68

Post by jtbigwoo »

kyledrake wrote: post #49
jusben1369 wrote: post #41

Earlier quoted context omitted.

You only have to look at the US and Euro economies post 2008 to see the real world benefits of QE. Europeans went down the austerity route and are stuck with consistently underperforming economy and the threat of deflation. The US has turned the corner and is a job creating machine again including the first real signs of inflationary pressure through rising wages. The most unusual thing I can see about Japan is it's…

I agree. They eased and increased taxes at the same time, which was not a smart move. Now they're back to square one, and they don't have much room left to maneuver because of the already high debt. If they wanted to accomplish their goal (more inflation) they should have stuck with the hail mary, rather than changing the play right in the middle of it. This, plus Japan's anti-immigration policy and rapidly ageing po…

>> They eased and increased taxes at the same time, which was not a smart move.

Increased sales taxes which was an especially dumb thing to do. The folks that spend the largest percentage of their income are hardest hit by sales taxes.

Re: Japan Falls into Recession

#69

Post by toomuchtodo »

mc32 wrote: post #58
toomuchtodo wrote: post #56

Earlier quoted context omitted.

The end of consumerism, less income inequality, and automation. I must just not understand. It seems pretty simple.

Right, but point me to a society that's been able to make that work. The formula has yet to be cracked.

Show me a society/country who has actually made a go at making it work in the last 40 years. If you're not attempting to execute theory in the real world, you're not trying hard enough.

Re: Japan Falls into Recession

#70

Post by dimitar »

JamesBarney wrote: post #59
dimitar wrote: post #43

Here is the common ground and controversy between most economists on the situation, I think it is interesting how much common ground there is: The common ground: * The government of Japan faces budget constraints; it cannot tax more than a certain amount and that includes seigniorage (taxing using inflation). * Right now Japan doesn't seem to be immediately close to those constraints since interest rates and inflatio…

While I think your post for the most part did a good job of summing up the issues I am a little confused by the following. "Default and excessive inflation can be a result of too much expansionary policy." While I understand how too much expansionary policy can lead to excessive inflation, I'm curious how it can result in a default.

* If creditors see that you are trying to monetize debt too quickly, they will demand higher rates.

* At some level of inflation, seigniorage revenue will fail to increase.

* If the government borrows money in a foreign currency to spend too much, depreciation makes loans harder to repay and there is no seigniorage.

* If a government refuses to loose monetary policy while spending too much, it will not be aided by monetizing debt, which makes default even quicker, since interest rates will rise regardless. Expectations of default can lead to capital flight, which if money is tight will wreck even more damage to revenue.

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