tag:blogger.com,1999:blog-6399730406480392183.post6995836393224930077..comments2024-03-27T11:18:34.222-03:00Comments on Viable Opposition: Japan - Are the three "D's" going to kill its economy?A Political Junkiehttp://www.blogger.com/profile/03342345936277964422noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-6399730406480392183.post-77720568389600408402011-07-08T11:18:33.139-03:002011-07-08T11:18:33.139-03:00Debt/GDP is a meaningless measure. See: http://rod...Debt/GDP is a meaningless measure. See: http://rodgermmitchell.wordpress.com/2009/11/08/federal-debtgdp-a-useless-ratio/<br /><br />Rodger Malcolm MitchellAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-5392025877319326752011-01-28T14:05:39.448-04:002011-01-28T14:05:39.448-04:00Japan continues to destroy wealth. Their Nikkei D...Japan continues to destroy wealth. Their Nikkei Dow peaked in 1989 at 39,000 now around 12,000 and real estate peaked in 1990 and is down 50 to 70%. The savings of the Japanese people is being wasted by the government and the government will not be able to fund Social Security and Medical care because of their demographics. The financial institutions own a lot of JGB's that will decline dramatically in value as Japan searches for foreign buyers at higher rates, as financial institutions turn to net JGB sellers. The savings rate is now zero (was 16%). Retirees, that hold most of the huge bank deposits are withdrawing deposits to fund retirement. CD's only pay .2%--retirees must withdraw principal. Interest consumes 22.4% of government revenues at a blended 1.4% interest cost. If the interest rate moved to 2%; the loss on JGB's would damage capital at most all the financial institutions. Japan's options are limited.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-85074026344228060892011-01-19T17:23:05.384-04:002011-01-19T17:23:05.384-04:00I am new to your blog, but I enjoy your topics. I ...I am new to your blog, but I enjoy your topics. I believe that when one looks at the Japanese debt, one must look at both the net and the gross government debt-to-GDP ratios.<br /><br />Yes Japan's Gross Debt-to-GDP is extremely high and stands far out from the rest of the G8 crowd. Yet Japan's Net Debt-to-GDP is rather comparable to Italy's. Yes it is high and undesirable, but it is not as bad of a problem portrayed.<br /><br />Please see this site for a comparison between net debt-to-gdp for the G7:<br /><br />http://www.economywatch.com/economic-statistics/economic-indicators/General_Government_Net_Debt_Percentage_GDP/Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-5402561407332180682010-12-29T17:11:03.842-04:002010-12-29T17:11:03.842-04:00If you run the numbers, with a birth rate of 1.2 c...If you run the numbers, with a birth rate of 1.2 children per woman, 8 grandparents will have about 5 children and 3 grandchildren. This kind of demographic collapse is inherently deflationary. To fight the deflation, Japan went into serious debt. <br /><br />It seems to me that of the 3 D's, demographics is at the center of it all.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-67479009424356909622010-09-15T17:03:57.083-03:002010-09-15T17:03:57.083-03:00Thanks for your comments. I agree that Japan coul...Thanks for your comments. I agree that Japan could be in a unique situation; the Japanese have always been very good savers and that will stand them in good stead if rough waters should be encountered. Their debt to GDP level still concerns me and as an investor who is concerned about fiat currencies, the idea of firing up the printing presses is frightening but that is what is most likely to happen. Whether there is a price to pay in the long run, no one knows....yet.A Political Junkiehttps://www.blogger.com/profile/03342345936277964422noreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-33839317590812390412010-09-15T14:29:38.971-03:002010-09-15T14:29:38.971-03:00Based on the above it makes sense for Japan to beg...Based on the above it makes sense for Japan to begin printing more money and selling yen in the open market. This will help counter the deflation and increase exports and drive improvement in the economony. In regards to the high levels of debt outstanding, Japan can again print money to pay of this debt so long as there is not issue with inflation. We've been in an interesting paradigm the last two years where stable countries have been able to print large amounts of money without triggering inflation, thus the concerns about debt in the U.S. and Japan are overstated.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-43495608254754423522010-09-15T12:44:43.029-03:002010-09-15T12:44:43.029-03:00Interesting and thorough article; thank you for pu...Interesting and thorough article; thank you for putting it up, complete with graphs!<br /><br />I have to say that I find the demographic issue somewhat questionable and potentially over-discussed in the Japanese media (and overseas). In terms of numbers, no one can really say how many people can a country the size of California can "comfortably" support. 2.1 children per parent might be a comfortable number to keep population levels steady, but I don't know if anyone has argued whether before, Japan was "over populated" and the "just right" value is lower than the current 120 million.<br /><br />There is no doubt that the pension system will break...but if Japan survives that period (by prolonging the retirement age, just as what France has just done?), maybe things will be fine. The Japanese media talks about the need to increase the birth rate and increase immigration, but sometimes I wonder if this is driving up the nations' fears. i.e., "the sky is falling"<br /><br />One thing is for sure...whatever Japan will face, the combination of the 3 D's should be of interest to economists in other countries. Any industrialized country can follow the same path; I think Germany also has a ratio of less than 2.1 per family.<br /><br />And it is Japan ... any shortfall in population will be made up for by robots! :-)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-60936764720494503942010-09-14T12:54:39.010-03:002010-09-14T12:54:39.010-03:00I wonder what exactly they are really up to - numb...I wonder what exactly they are really up to - numbers send a message, and tell others what you want them to see...Anonymousnoreply@blogger.com