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Japan Falls into Recession

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Re: Japan Falls into Recession

#31

Post by deancutlet »

deciplex wrote: post #24
techdragon wrote: post #18

Earlier quoted context omitted.

Immigration is painfully unlikely due to cultural issues. It's oft suggested by non Japanese people looking at the problem but at least from what I can see, the majority of the Japanese voting public don't want immigration. There's reasons if you want a fun read. Particularly interesting is the history of people of Korean decent who are native Japanese residents for a generation or two.

It's often suggested that Koreans in Japan are somehow deprived of Japanese citizenship. This is not true. Rather they are not allowed to naturalize in Japan while retaining their Korean citizenship (yes, I realize that is not the whole story and there is a lot of history there - nevertheless, there is nothing stopping a Korean who has lived in Japan long enough, or was born there, from acquiring Japanese citizenship…

It is the same for the US. People that naturalize are "required" to sever citizenship they hold with other nations. However, many people fail to follow through and notify previous host nations.

Re: Japan Falls into Recession

#32

Post by jvm »

techtivist wrote: post #28

Here's the biggest underlying problem. Contrary to what one would expect, Japanese firms are actually flush with money, but due to Abenomics, the weakness of Yen means they are investing more and more abroad, rather than putting the resources in improving its own infrastructure. We all know about Softbank's recent investments in India and South East Asia. And it's not just limited to Tech or even the private sector,…

> the weakness of Yen means they are investing more and more abroad

Shouldn't a weak yen make it cheaper to invest at home relative to abroad? What's the mechanism that causes the opposite effect?

Re: Japan Falls into Recession

#33

Post by oska »

rrggrr wrote: post #19

Demographics. Fukishima. China. Japan faces enormous challenges. Aging population means increased healthcare costs supported by a (temporarily) declining workforce and decreased tax revenues. Fukishima's costs are incalculable but impact broadly healthcare, manufacturing, farming and fishing. Much Japanese manufacturing has moved to China and adding to that expense is Japan's need to increase its defense spending to…

> adding to that expense is Japan's need to increase its defense spending to provide a small measure of balance in its territorial disputes with its neighbor

Japan's military spending is 7th or 8th largest in the world, depending on who's measuring it. [1]

Any conflict with China that actually goes beyond posturing is going to be a small scale skirmish. If that happened both countries would rapidly seek to de-escalate (behind the scenes). The two economies are too closely linked for either country to want full scale war. Their existing military is already more than adequate to deal with any small scale skirmishes.

[1] http://en.wikipedia.org/wiki/List_of_countries_by_military_e...

Re: Japan Falls into Recession

#34

Post by logfromblammo »

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…

This is correct. The concentration of capital grows so large that the owner literally cannot spend it faster than it grows. If it was simply vaulted and ignored, deflation would result, from that cash being removed from circulation.

Thanks to our central banks, any deflation pressure is seen as a license to print more money, which is a tax on non-circulating savings. To avoid this, holders of cash do their best to invest as much as possible.

Investment is emphatically not economically equivalent to spending. It's a lot like spinning your cash around in place so everyone knows you can still spend it. It does not create jobs or help the middle class; only actual spending does that.

Re: Japan Falls into Recession

#35

Post by kristofferR »

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).

Re: Japan Falls into Recession

#36

Post by minikomi »

mc32 wrote: post #4

Quantitative easing, Yen depreciation... What they need to do is figure out a way to grow the population locally or through large-scale immigration. I'm afraid this is the fate that awaits the developed world (or countries with low population growth). Japan is like a canary in the mine of post-industrialism. It'll be interesting to see what they figure out for their society and the lessons they might have for us.

As someone who has lived in Japan for the past 8 years.. I still feel like an outsider in many many ways. Unfortunate to have to say it, but there's much deeper issues than immigration law at play.

Re: Japan Falls into Recession

#37

Post by a8da6b0c91d »

techdragon wrote: post #18
mc32 wrote: post #4

Quantitative easing, Yen depreciation... What they need to do is figure out a way to grow the population locally or through large-scale immigration. I'm afraid this is the fate that awaits the developed world (or countries with low population growth). Japan is like a canary in the mine of post-industrialism. It'll be interesting to see what they figure out for their society and the lessons they might have for us.

Immigration is painfully unlikely due to cultural issues. It's oft suggested by non Japanese people looking at the problem but at least from what I can see, the majority of the Japanese voting public don't want immigration. There's reasons if you want a fun read. Particularly interesting is the history of people of Korean decent who are native Japanese residents for a generation or two.

> the majority of the Japanese voting public don't want immigration

The vast majority of the American public don't want it either, but businesses do, so it happens anyway.

Re: Japan Falls into Recession

#38

Post by waps »

mc32 wrote: post #16
sliverstorm wrote: post #14

Earlier quoted context omitted.

Well, their population looks about ready to take a nosedive, so it's not like they "just aren't growing fast enough".

Be that as it may, the other option, to export their way out of this is not going to happen. They are not a cheap-labor based economy --and they don't have known viable reserves of natural resources. So, what are they to do?

The general answer every country seems to have is "knowledge-based economy". Except it never works. Knowledge flees countries the moment it presents more than a small advantage, as the knowledge moves with workers and companies.

Re: Japan Falls into Recession

#39

Post by jpatokal »

csa wrote: post #20
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…

> But quantitative easing lowers interests Interest rates have been low -- very close to zero -- for a long time now (two decades?). Real interest rates have been negative over the same time period. Interest rates can't really be lowered in any way that is meaningful to the middle class. If you talk to "regular" people, overall economic confidence is extremely low. People with super-secure jobs (e.g., with the govern…

Manufacturing is only ~18% of the Japanese economy, and that share is shrinking fast as Japan outsources its factories to China and SE Asia. For the rest, 180 yen to the dollar would just drive higher inflation through eg. fuel prices despite stagnant wages, further weakening the economy.

That said, I'm not seeing 180 yen to the dollar any time soon, by most measures the yen is already undervalued. (With the glaring exception of yen vs national debt, but that particular ticking time bomb is not showing imminent signs of explosion.)

Re: Japan Falls into Recession

#40

Post by jim_greco »

techtivist wrote: post #28

Here's the biggest underlying problem. Contrary to what one would expect, Japanese firms are actually flush with money, but due to Abenomics, the weakness of Yen means they are investing more and more abroad, rather than putting the resources in improving its own infrastructure. We all know about Softbank's recent investments in India and South East Asia. And it's not just limited to Tech or even the private sector,…

Japanese companies are flush with money, but the problem is demand and not supply. Japan has an declining population and even faster declining working age population. Combine this with the sales tax increase and a slowdown in China and you have a lot of headwinds facing their economy. Companies in the rich world are investing abroad because there are just a lot better opportunities for growth abroad.

Abenomics is attempting to stimulate demand through a combination of fiscal stimulus (direct demand from the Government) and monetary stimulus (long term interest rates unattractive make local investments more attractive). A weak Yen is actually great for Japan as it's a net exporting country.

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