Japan Heading For Crash

Discussion in 'Current Affairs, News and Analysis' started by AndyPipkin, Sep 10, 2007.

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  1. The Japanese government has just revised Q2 figures from 0.5% annualised growth to a 1.2% annualised contraction.

    THis is bad news. Deflation is starting again in Japan and interest rates are already near zero, with government spending at 6% deficit. This has given Japan a national debt exceeding 150% of GDP, high even by third world standards. Coupled with Japan's demographic decline, this is really bad news.

    Stratfor say:

    Japan has the worst of it all: contraction, deflation, unmanageable debt, shrinking population, shrinking work force, shrinking tax base and increasing pension commitments. This problem cannot be solved by anything less than the complete implosion of the current political-economic system and its utter replacement by something fundamentally new.

    One can only guess what the global fallout of a Japanese collapse could be, but it will make the current Sub-Prime shenanigans look pretty tame.

    Oh, and China's not looking too clever long term either...
  2. Its been a long time coming, the Japanese also sowed the seeds of their own doom, by being racist and discriminatory toward foreign residents and workers, they could have worked in Japan and propped up the place, the war vets probably won't be shedding too many tears over that , the Chinese also have the Japs over a barrel as they hold a LOT of Japanese Govt Bonds, all they have to do is cash them in, there will be plenty of Hari kari on NIKKEI market floors :twisted:
  3. semper wrote:

    A very long time coming, given that they've been doing a lot better than us for 50 years through choosing the hi-tech route over the imported cheap labour route. At least when the next depression comes they won't have zillions of unemployed, unskilled foreigners wandering round their cities looking for ways to make cash.

    Back to reality, China's huge and incredibly rapid growth was always bound to cause massive problems for the already industrialized countries. Even robots can't compete with the amount of cheap labour in China. Looks like it is starting to come to a head.
  4. when I worked out there in 97 i simply couldn't believe how their ecomomy could function with the massive waste in all aspects of thier business. I went back in 98 and there were numerous business executives being done for fraud every week. basically, corporate crime is what kept the country afloat. once that started to crumble and the courts started to prosecute CEOs and companies for illegal behavior, the writing was on the wall. It will certainly be difficult for the world economy, but i suspect that many would see it as some small justice for their overt racism and refusal to properly attone for past acts. (myself included) I have a dim view of some of japans cultural practises. Thier 'dodgy' business practises are really going to bite them on the arrse hard now, it seems.

    a note on japanese culture. A mans job is his identity. it is his defining characteristic and to be out of a job is absolutely shameful. so, there will be many who kill themselves i suspect. Another of the ways in which japanese society has failed to keep up with the changing world.

  5. alot of chinas success is also based on crime. copyright infringement specifically. If you have a product made in china, you can be sure it will be very poor quality unless lots of money is spent supervising the workers, and anything you produce will be copied and sold around the world. It also occurs, that your genuine product 'goes missing' and is sold around the world.

    china certainly isn't the great deal it seems to be.

  6. skicarver wrote:

    All true. But the knock on effects of China's rapid industrialistion was always going to stress the economies of the already-industrialised club. In the same way as Japan's did in the 50s and 60s. The causes of the cracks that appear in different members of the club will vary. As you mentioned in your other post, Japan's semi-feudal way of running their big corporations will be one cause of their cracks appearing. In the UK and US the over-extension of credit and debt may be the biggest crack.

    I also think that past and present over-reliance on importing cheap labour will have other consequences when things go wrong.
  7. "Old World" Countries like us , can cope with unemployment and bounce back, we are used to it, we had Boom times and Bad times, we learned to deal with it.

    I for one won't be dropping a penny in the Charity box for poor unemployed Japanese people, they didn't exactly fall over themselves to help their War victims.

    stuff 'em
  8. semper wrote:

    I'm not worried about Japan, I'm worried about the UK. We'd bounce back eventually from a recession but a depression would leave places like London and Birmingham looking like Beirut (imo). Precisely because of us going down the cheap labour rather than the hi-tech route that Japan took.
  9. To be fair to Japan, they do have a reasonably long history.
  10. they went from Feudal society to modern society in about mid 1800s dropping the Samurais, Shoguns, Clans, to Modern Army, Factories, Trains so they were farily recent new Japanese.
  11. If japan goes T its up then the fallout is going to be massive.
    International markets and investments are all interwined a a sever recession in japan will have knock on effects for all.
    The jap holds large quanties of US debt and if they start to sell off then the crises caused by Bush with his irrisponsible polices will explode into a resecion that will be on par with the Great Crash of Wall street.
  12. I bet you are fun at parties.

  13. Serpently am.
    And The Telegraph was suggesting last week that the Chinese had all ready started selling off US securities.
    Eh ya not one of the wasaks who believed El Gordo was a good Chancellor, just because he riegned in a Worldwide era of low inflation, the jap had zero inflation and the Swiss actualy charge folk to keep their money in a bank. Zo the 2% we had was nothing special.
  14. China's CPI jumped to an annual rate of 6.5% in August, about half a point higher than expected and about 1 point higher than last month. Higher food prices were to blame but non food prices climbed by just 0.9%. The implication is that core inflation in China is still under control.

    Japan's core machinery orders rose by a hefty 17% in August, at least three times stronger than expected. This will come as a great relief to Japanese economy watchers given the disappointments on the capital spending front in recent weeks.
  15. It's not Japan or the US that we should be worrying about. Both have large, resilient economies, a well-educated work force, a large technologically-advanced manufacturing base, a targetted immigration strategy (accepting that the 'Mexican' effect disrupts this), a strong savings ethos, and above all else, political and economic independence.

    Compare that to the UK. Largish economy although unbalanced (heavily weighted towards services), poorly educated workforce, a very small technologically advanced manufacturing base, an uncontrolled immigration strategy, and political/economic dependence upon the EU. In addition if things get tough here the skilled immigrants will up sticks and move to a more productive area, leaving droves of unskilled and criminally inclined detritus to support in addition to the huge unproductive swathes of our 'native' population.

    In addition we have one of the highest levels of indebtedness of all the world's major economies. Some of this debt has financed productive effort; much of the personal debt, however, has been used to finance consumer goods, all rapidly depreciating assets. Much of this finance, however, has been raised against rising property prices and amusingly categorised as equity withdrawal. This is merely an illusion - the debt has still to be paid back and millions have merely brought forward their future consumption in blissful ignorance of the fact that compound interest will ensure they pay through the nose for this short-termism.

    That's the cheery news, bad stuff to follow.


    PS Keep your eye on Spain and Eire - both are on the verge of collapse.