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The death of Japan?

bexchurnside

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I would love to see the light at the end of the tunnel, but everytime I look at the situation all I can see is Japan with a very gloomy future.
****://***.mof.go.jp/english/budget/pamphlet/cjfc2006.pdf
At the moment, nearly 50% of japans fiscal budget is for servicing the debt and paying for social security related expenses. Both of these are on the increase.
By 2017 we will all be paying 18.30% of our salary to a pension. A pension that we will probably never receive. That is an increase of 4% over what we pay now. So who cares right? We don't pay high taxes in Japan. Nope, we don't but likely we will see a 5% increase in the consumption tax over the same 10 year period. You can also expect to pay higher health care costs due to our aging population.
And at some point, people are going to quit buying bonds. How do they then fund the debt? If you get no interest on your bonds, why buy them? But Japan can't raise interest rates because they can't afford to pay the interest on their debt.
Now toss in a weakening yen.
And dont forget Japans aging population and its declining birth rate.
Another beautiful thing is the Arbaito job. Companies are eager to switch people over to these positions. They even want to switch my job to this type of positions. And then pay you 1000 yen an hour, no benefits to work 40 hours a week. Just wonderful, you make 160000yen a month, pay nearly half to your landlord, over 25% to taxes, pension and health care you are left with a measly 40000yen to survive on for the month. Yah, that is enough to cover your train fair and lunches and that is about it. Why would people ever want to work at these jobs? Guess it is fine if you live at home.
And yet many people look at the economy and think - well, economies booming, things are doing fine. But reality is that Japan's government has spent far more money that it can ever think to repay. A debt that is 160% of GDP. And they are tacking on 30 trillion yen every year. The problem is staring them right in the face and they don't have the slightest clue how to tackle it. Look at the proposed solutions. These solutions come across as the reason Japan has such a large debt in the first place.
Japan will continue to throw money at make work projects until finally the international community gives up on them and invests their money elsewhere. At the moment, Japan is only doing well because of China. China's growth is not sustainable and will be coming to a halt. Japan will suffer even more then.
There is a solution to every problem, but for whatever reason, the government can't or doesn't want to fix it.
Kilt.

Japan's population is overcrowded. I think if the old people are not contributing anything financially, just send them off to brazil where the yen will go far. Japanese are the only people in the world that cost on average to hire as a non "white country" than the average white person.

They should be funneled to Latin America or something.
 

JerseyBoy

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I think the current low birth rate among Japanese is a temporary condition and as someone has already said in this thread, the pendulum will swing the other way in the near future. The technological advancement could also help Japan do things more with less able bodies. There is no guarantee that high population of kids and young people will lead to a stable economy (young people have to be educated and/or trained with essential skills)
My bet is this: Whatever could happen to any major industrialized nations (USA, Japan, UK, Germany, and others) would not happen in our lifetime as long as we are talking about the significant change in the balance of powers.

Whoever can answer which country will be on top in 10 years or 20 years would be in a better position to make good money (through investment or immigration).
 

Kaspian K

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I don't see the low birth rate changing anytime soon unless steps are taken to make child rearing more affordable in Japan. It's bad enough that pregnancy is deemed a "self inflicted condition" whereby medical insurance doesn't cover it (although the government does hand out a certain amount of cash when someone has a baby). On top of this there are so many other costs involved with having kids that the whole proposition is very daunting for young people in Japan. Not only will they have to pay a king's ransom for a pension they may never see, a health care system being decimated by the parents and grandparents, but also have more little mouths to feed. And this is in a time when wages have barely moved in years, and in some cases have gone down.
 

JerseyBoy

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I was reading an article on the tax rates of various industrialized nations. Most of the countries have the progressive rates; so, the comparisons were done based on the average tax burden (per capita burden of taxes based on GDP). It listed rates for both a single person and a married couple with 2 kids. I saw some countries have quite a difference in the rate between a single person and a married couple with 2 kids. I think Japan was like 30% for a single and 28% for a married couple with 2 skids. US was 32% for a single and 15% for a married couple with 2 skids. (I am a single; so, I want to see single people get as much tax benefits as married people.)
 

pipokun

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Paulson Rebuts Clinton, Blesses Foreign Buying of Treasuries
...
Clinton, a New York senator seeking the Democratic nomination for president, wrote to Paulson and Federal Reserve Chairman Ben S. Bernanke last week to say the investments make the U.S. ``hostage to the economic decisions being made in Beijing, Shanghai and Tokyo.''
http://www.bloomberg.com/apps/news?pid=20601087&sid=aiJbiy6mTDpc&refer=home

I am scared if she would really announce, "Do not invest in the US", in the future.
 

pipokun

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Tokyo Bourse Decides To Keep Nikko Cordial Listed
TOKYO (Nikkei)--The Tokyo Stock Exchange announced Monday that it has decided to keep shares of Nikko Cordial Corp. (8603) listed and will remove the issue from its supervisory post on Tuesday.
http://www.nni.nikkei.co.jp/[/QUOTE
TSE diedツ\(^o^)ツ/
 

KirinMan

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Tokyo Bourse Decides To Keep Nikko Cordial Listed
TOKYO (Nikkei)--The Tokyo Stock Exchange announced Monday that it has decided to keep shares of Nikko Cordial Corp. (8603) listed and will remove the issue from its supervisory post on Tuesday.
http://www.nni.nikkei.co.jp/[/QUOTE
TSE diedツ\(^o^)ツ/


Could you explain what has this got to with with the topic or how it is related. I understand that they misreported their financial statments but how does that relate to the topic?
 
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..
The US can easily survive without a Japan. As proof, Japans economy has been stagnant for 10+ years and the US has been doing fine, and will continue to do fine. ..
This topic is interesting.. Based on GDP, the US economy seems to have grown much in the last 10 years while the european economies and japan have been stagnant. However... The GDP is not always a reliable way to estimate economic growth and is suffering these days from its own success (i.e. to attract investment, it's good to show the economy is growing, and there's ways to make the GDP grow artificially). In the US, the personal consumption expenditure has not gone up in the last 25 years while the GDP has been growing significantly. Most probably this is due to artificial inflation of the GDP by the local states to attract investment.
Anyhow - I do agree with some forumers that the japanese and american economies are intertwined. If one goes down, it will bring the other with it. I'd be surprised if this happens to either economy.
cheers
 

justinod

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ah, economics:
1. the population issue
the population is on the down. this creates a lack of labor, which means a shortage, thus a higher cost for companies to employ the fewer people. (mechanics of econ) this causes many problems such as inflation based on higher resource costs>higher operating costs>higher costs for consumers>consumers need more $, and so on. However, the population decline can also be seen as a regulating measure. I don't have data, but I hypothesize that at a certain pop. lvl the balance will be more operable (this of course means that a lot of people that arent in the labor force... well, will be leaving this world).
2. interdependancy (a or e... dang it, sp):
japan and china buy up us debt. this is to keep the dollar somewhat strong and keep the us economy capable of importing luxury items (not neccesary) that both of them make. if they dont buy the debt, we cant afford to buy the products that they make. this would happen do to a weakened dollar. also, it isnt as if the two dont make money off of interest. they dont buy our debt out of charity, they buy it for interest revenue.
3. capital goods vs consumer goods:
japan is very good at balancing the production of capital goods (tomorrows profits) with consumer goods (today's profits). this will be the key to japan's survival economically. compare this to the states in the 80's. we were producing a vast amount of consumer goods but lacked future planning.
 

pipokun

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TOKYO, April 18 (Reuters) - Britain's Tesco Plc (TSCO.L: Quote, Profile , Research) on Wednesday said it would open its first store under its own name in Japan later this month, as the world's fifth-largest retailer continues its push into overseas markets.
...
"These aren't convenience stores," spokeswoman Shizuko Ota said. "The stores are in the format of a small supermarket."
Unlike Japanese convenience stores, the Tesco outlets won't operate 24 hours a day and will mainly carry groceries, Ota said.
Reuters UK[/QUOTE

Will Tesco save Japan?
 

maushan3

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Japan might have more problems with its automobile industry because its cars are getting too expensive (compared to Korean and Chinese cars) and still did not reach the status of Western cars.
Japanese car brands, at least in what I am aware of, in Mexico and in the U.S. are booming on sales, so I wouldn't think they are in a problem, Yes, they are getting more and more expensive, but, as of right now, they are making it through and beating their American counterparts (GM, Ford, etc.). American cars are not what they used to be a a decade, if not more, ago; and, don't really know anything about Chinese and Korean brands, except that Kia Motors gets the worst government ratings in the U.S.
The German government is a social state which drains the money out of many wealthy people, and when they leave Germany, we have a problem then. And that is what has been happening for years. Smart and rich people leave Germany and foreign investors have no interest to do business in a country where you pay so much income tax.
As contrary in America, the middle class is quickly disappearing, and the rich and poor classes are getting now bigger and bigger since the government gives rich people big tax-breaks due to the economic impact their investments have in the economy.
The American economy is suffering, only you will never read about it in the papers. High paying jobs are fleeing the country at an enormous pace and, even though 'they' say jobs are increasing, the only jobs that are increasing are low paying hourly or part-time jobs. The US has only 16% of it's manufacturing capacity left! Even Ford will be filing for bankruptcy protection soon or Toyota will merge with them. You watch.
Pachipro, I wish I had that much knowledge about money; Yes, indeed, big time, the the government debt is huge and they might be forced to print more money ehich definitely ain't good since that will only lead to a humongous devaluation of the dollar. Besides, the first generation of baby boomers is starting to retire now and they now think the government will take care of them like in the good ol' times, but they are in for a big surprise, the country doesn't want to face the truth that it will soon run out of money and programs like Medicare will not do much about them. Japan is facing the same problem, and, yeah, Kilt, you are right, mutual funds and the like will not be enough for retirement. Pretty scary and sad.
Japan, on the other hand, is a nation of savers and they may survive more easily than the US as their debt as a nation is far, far lower than the US. With this they will always be able to purchase their resources.
It's great that they have that mentality, but what needs to be done here is change the savers nation to an investors nation, and this problem is far more pronounced in the U.S. than pretty much any country.
It's a shame that my generation has learned nothing from our parents' spending habits in the 1980s, and the recession that hit when we entered high school in the early '90s.
Very sad, and I think the U.S. will bounce back as has happened in previous occasions, most notably the 1929 recession.
Japan's population is overcrowded.
That is right now, however, the population is expected to decline, so much, that estimates say in 100 years, there will only be 60 million people residing in Japan.
* I just wish people like Donald Trump to run for office...
 

UNaruto1990

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Personally I dont think that Japan can easily go down, simply because a working country like Japan can never go down unless it's people stop working and start to be lazy (and that's totally impossible) !! no matter what happens Japan will always survive, Japan might have some bad times in the future, but it will survive :) ...
 

Pepe

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I know a Japanese friend. He 's graduated in PHD and immigrate to Australia .
I think Smart Japanese people always immigrate to other countries that's the death of Japan.
I doubt that it is a major dilemma in Japan. Almost all of the Japanese students I know here in NZ are glad to have been here and studied, but all look forward to getting back to Japan and working there. In NZ we have a problem, and I dare any nation to top this - over 30% (34% last time the survey was conducted last year) of NZers who graduate from university leave the country indefinitely, only to return for short visits. Now that is a brain drain.
 
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