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Japan Falls into Recession

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Re: Japan Falls into Recession

#161

Post by lmm »

cturner wrote: post #79
hindsightbias wrote: post #64

Earlier quoted context omitted.

> 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.

Why is this? Computers get rapidly cheaper for example.

When people know there's deflation they hoard money rather than spending - which can then push into further deflation. Currency ceases to be liquid because no one wants to sell - you're making a free profit by just holding onto your cash. In a world with only one currency you end up with the rentier class that has money capturing all economic productivity. Given that the Japanese have other options... I don't know. Interesting times to be sure.

Re: Japan Falls into Recession

#162

Post by AmirS2 »

jpatokal wrote: post #90
hudibras wrote: post #83

Earlier quoted context omitted.

There's so much about your post which is incorrect that I don't have time to debunk it all. So let me just hit the biggest error, so that others don't have to waste their time: It's literally impossible for Japan to default on their debts, which are almost completely in Japanese currency.

It's "literally impossible" only in a very literal sense of the word. In other words, yes, Japan can indeed get out of a debt of 17 gazillion yen simply by printing 17 gazillion yen, but I'm not sure flooding the money supply like this would cause much less damage than an actual default (=the Japanese government telling its bondholders that it's not going to repay them).

>It's "literally impossible" only in a very literal sense of the word.

The literal sense of the word "literally"?

Yes, I think that's exactly what was meant!

Has the word "literal" been so badly abused across the internet (true) that you thought a correct use of the word needed clarification?

Or is contemplating the fact that Japan's govt. debts are entirely in its own currency, which can be issued at will with no constraint from the financial markets, so shocking and nonsensical to orthodox thinking that you thought that the original statement couldn't possibly have meant what it said?

Re: Japan Falls into Recession

#163

Post by wintersFright »

cturner wrote: post #79
hindsightbias wrote: post #64

Earlier quoted context omitted.

> 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.

Why is this? Computers get rapidly cheaper for example.

It is more about currency deflation rather than price deflation. Without currency inflation the current system collapses.

Price inflation is from currency inflation - ie: more $ around today chasing approximately the same number of goods than yesterday. Agreed?

When currency deflates, there are less dollars chasing those goods so dollars are harder to come by and prices necessarily decrease to allow the remaining dollars to cover the goods being exchanged. Yes goods 'get cheaper' in dollars. That's just a side show and not the problem.

So what happens to debtors in a currency deflation? Dollars are harder to come by, debts cannot be repaid and debts default. Debt default is the destruction of currency. More deflation. Positive feedback.

Savers today save in dollar accounts which rely on debtors to pay back their debts. With debt collapse, so goes bank assets (debt) and now their liabilities (savings accounts) outweigh their assets which makes them insolvement.

Debtors crushed. Banks collapse. Savers crushed. Credit disappears. Systemic financial collapse.

If today's savers didn't save in bank accounts for the promise of more dollars tomorrow then we wouldn't have this problem. Save in fine art and collectibles, save the world.

Re: Japan Falls into Recession

#164

Post by TorKlingberg »

tomp wrote: post #158
ekianjo wrote: post #100

Earlier quoted context omitted.

> What they need to do is figure out a way to grow the population locally or through large-scale immigration Or drastically increase productivity, or have more people join the workforce. Women are massively under-used in Japan. There's no need for immigration as long as there is a large untapped segment of the population not actively employed.

> Women are massively under-used in Japan. There's no need for immigration as long as there is a large untapped segment of the population not actively employed. How would that help? People who are not employed (not "unemployed", but they simply don't need to work) still spend money (that their working relatives make), so by having them enter the workforce, you would not increase consumption at all, while reducing the…

If women also worked total family income would increase, and total family spending would probably also increase.

Re: Japan Falls into Recession

#165

Post by ekianjo »

tomp wrote: post #158
ekianjo wrote: post #100

Earlier quoted context omitted.

> What they need to do is figure out a way to grow the population locally or through large-scale immigration Or drastically increase productivity, or have more people join the workforce. Women are massively under-used in Japan. There's no need for immigration as long as there is a large untapped segment of the population not actively employed.

> Women are massively under-used in Japan. There's no need for immigration as long as there is a large untapped segment of the population not actively employed. How would that help? People who are not employed (not "unemployed", but they simply don't need to work) still spend money (that their working relatives make), so by having them enter the workforce, you would not increase consumption at all, while reducing the…

> The simplicity and modernity that is often seen in Western Web Design gave these users the impression of not providing enough information, which made them uneasy and engendered a lack of trust.

huh, by adding another income to the family ? So, that should lead to a least a little more consumption.

Even if the average wage is reduced, I doubt it would be cut by half and result in 2 people working to reach the same salary as a single person before. You are not being very realistic here, since in Western countries putting Women to work has been a very effective way to increase households' levels of life.

Re: Japan Falls into Recession

#166

Post by AmirS2 »

adventured wrote: post #130
hudibras wrote: post #127

Earlier quoted context omitted.

A country defaults when it can no longer service the interest on its debt. Japan's interest on the public debt is around $250B/year, or around 5% of GDP. 5% is a higher percentage than most countries (U.S. is around 2.5%) but less than, say, Greece at the height of their crisis. And Greece ended up not defaulting and not devaluing their currency (obviously, being in the Eurozone). $250B is around 25% of the annual go…

A country defaults when it either can no longer make the payments, or when it can't pay back the real value rather than just the nominal value. eg If I devalue my currency by 99%, and then attempt to pay off debts in that currency, that is a default, regardless of if a country were to try to pretend otherwise. The alternative to that context, would be that any nation can just freely debase their currency, pay back de…

Please find me a single CDS contract that allows that definition of "default"? Or a law or a solvency judge who would agree? If your contract stated that you are to pay back 100 USD or JPY or whatever, on a certain date, and you pay exactly as stated, then that cannot be a default, regardless of the prevailing FX or inflation rate at the time. You should have FX or inflation hedged if you were worried about those risks...

You may consider it a "moral" default if the debt is paid back in inflated currency, but it is in no way a technical default and you can't just redefine long standing meanings of the word "default" to suit the point you're trying to make.

I'm not saying that nobody cares if debt is paid back in debased currency, but if it's paid back according to the letter of the contract, then it's not a default.

Re: Japan Falls into Recession

#167

Post by tomp »

TorKlingberg wrote: post #164
tomp wrote: post #158

Earlier quoted context omitted.

> Women are massively under-used in Japan. There's no need for immigration as long as there is a large untapped segment of the population not actively employed. How would that help? People who are not employed (not "unemployed", but they simply don't need to work) still spend money (that their working relatives make), so by having them enter the workforce, you would not increase consumption at all, while reducing the…

If women also worked total family income would increase, and total family spending would probably also increase.

In the short term, yes, but in the long term, that's questionable... AFAIK, 50 years ago, it was very simple to raise a middle-class family with just one working parent (in the US), whereas nowadays it's almost impossible for the majority of professions.

Re: Japan Falls into Recession

#168

Post by tomp »

ekianjo wrote: post #165
tomp wrote: post #158

Earlier quoted context omitted.

> Women are massively under-used in Japan. There's no need for immigration as long as there is a large untapped segment of the population not actively employed. How would that help? People who are not employed (not "unemployed", but they simply don't need to work) still spend money (that their working relatives make), so by having them enter the workforce, you would not increase consumption at all, while reducing the…

> The simplicity and modernity that is often seen in Western Web Design gave these users the impression of not providing enough information, which made them uneasy and engendered a lack of trust. huh, by adding another income to the family ? So, that should lead to a least a little more consumption. Even if the average wage is reduced, I doubt it would be cut by half and result in 2 people working to reach the same s…

Well, yes, it depends on the assumptions. Honestly, I have no idea how it worked out in the West, as I come from a country where 2 working parents has been the norm already for my grandparents. Maybe there is lack of production, and more employees could produce more, and hence get paid more (in average). On the other hand, (as I think you implied in another reply) there might be too many employees already, wasting time at work, and a lack of consumption. In that case, the only thing that 2 working spouses would cause is a redistribution in income (2-working-parent families would be getting comparatively more money, 1-working-parent families comparatively less).

Re: Japan Falls into Recession

#169

Post by spindritf »

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?

I have set refcontrol[1] to forge referral and send google.com for online.wsj.com. Saves you the googling.

[1] https://addons.mozilla.org/en-US/firefox/addon/refcontrol/

Re: Japan Falls into Recession

#170

Post by TorKlingberg »

tomp wrote: post #167
TorKlingberg wrote: post #164

Earlier quoted context omitted.

If women also worked total family income would increase, and total family spending would probably also increase.

In the short term, yes, but in the long term, that's questionable... AFAIK, 50 years ago, it was very simple to raise a middle-class family with just one working parent (in the US), whereas nowadays it's almost impossible for the majority of professions.

And you believe this is because women are working now?
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