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It's a official now. Japan in a recession.

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eskimospy said:
It will help everyone if you can pull the country out of the liquidity trap.
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You are not explaining crap.

Japan is facing the same problems we are. An aging population on a fixed income, jobs gone to china, wage stagnation, and your answer is inflation?

How is inflation going to bring jobs back to japan, or the US?
 
Texashiker said:
How is that going to help an aging population on a fixed income?

How is higher than normal inflation going to help the average worker whos wages have stagnated?
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They're the collateral damage. Only thing he cares about is getting people to spend money on something, anything no matter how pointless, trivial, or ultimately counterproductive to the purchaser. Whatever transient plastic disposal crap it may be is beside the point, it's all about ensuring that overcapacity never gets closed down. He'd put in place the "Buy-N-Large" consumer model from Wall-E if he could.
 
glenn1 said:
They're the collateral damage. Only thing he cares about is getting people to spend money on something, anything no matter how pointless, trivial, or ultimately counterproductive to the purchaser. Whatever transient plastic disposal crap it may be is beside the point, it's all about ensuring that overcapacity never gets closed down. He'd put in place the "Buy-N-Large" consumer model from Wall-E if he could.
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Another straw man. Please stop.
 
eskimospy said:
Another straw man. Please stop.
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He is right, and you are wrong.

Japan is facing economic disaster, just like we are. Think it is going to get better? I seriously doubt it.

Japan has an aging baby boomer population, just like we do.

Japan has sent its jobs to China, just like we did.

For some reason you think the answer is to print money out of thin air to enrich a certain demographic?

Inflation at this point would be devastating.
 
eskimospy said:
Another straw man. Please stop.
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Don't have to. Japan will likely take your advice and have another few lost decades. I don't really give a shit about them and your advice is being rightfully ignored in the U.S. so who cares what you think? Quantitative Easing, huge deficit spending, and all the other idiotic things you support are in the rear view mirror now, thank goodness.
 
glenn1 said:
Don't have to. Japan will likely take your advice and have another few lost decades. I don't really give a shit about them and your advice is being rightfully ignored in the U.S. so who cares what you think? Quantitative Easing, huge deficit spending, and all the other idiotic things you support are in the rear view mirror now, thank goodness.
Click to expand...

My advice wasn't ignored at all. The US undertook massive monetary stimulus and a greater degree of fiscal stimulus than any other developed country. Turns out we weathered the economic downturn better than pretty much any other developed country.

It seems like the appropriate thing to do would be to thank those of us who pushed those policies despite your objections. Instead you both take the improved prosperity and rage against the very things that helped bring you that prosperity.

Very strange.
 
eskimospy said:
My advice wasn't ignored at all. The US undertook massive monetary stimulus and a greater degree of fiscal stimulus than any other developed country. Turns out we weathered the economic downturn better than pretty much any other developed country.
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Really? You think this storm is over? You can not see the forest for the trees.

This storm is just getting started.

We are going to have to wait another 10 - 15 years before the real waves hit, as that is when gen X will start getting ready to retire and go on disability.

Japan, they are in for a brutal storm.

10 - 15 years from now China will be an economic power house while japan sinks in debt and inflation.
 
eskimospy said:
My advice wasn't ignored at all. The US undertook massive monetary stimulus and a greater degree of fiscal stimulus than any other developed country. Turns out we weathered the economic downturn better than pretty much any other developed country.

It seems like the appropriate thing to do would be to thank those of us who pushed those policies despite your objections. Instead you both take the improved prosperity and rage against the very things that helped bring you that prosperity.

Very strange.
Click to expand...

Glad to know you support tax cuts and bailing out bankers, hedge fund managers, and government sponsored housing agencies like Freddie and Fannie. With friends like you progressives don't need the GOP or 1% as enemies, do they?
 
glenn1 said:
Glad to know you support tax cuts and bailing out bankers, hedge fund managers, and government sponsored housing agencies like Freddie and Fannie. With friends like you progressives don't need the GOP or 1% as enemies, do they?
Click to expand...

More straw men. Please stop.
 
eskimospy said:
More straw men. Please stop.
Click to expand...

Once again Glenn is right and you are wrong.

Your post focus on enriching a certain demographic.

Where are your post about bringing jobs back to Japan? You never mention putting the middle class back to work.
 
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Notice the apparent paradox of the country dying due to lack of population growth. This is expected. The world is forced to overpopulate and one day restructure drastically, taking us with it. Its like a law of nature.
 
Last time Japan was in their bubble it was fantastic! I had so many dates with japanese women back between 1992-1997 it was crazy! So any economic downturn has forced them always to retreat back to Japan. Now my japanese is getting rusty. GRRR!! BAKA DESU YO!
 
inachu said:
last time japan was in their bubble it was fantastic! I had so many dates with japanese women back between 1992-1997 it was crazy! So any economic downturn has forced them always to retreat back to japan. Now my japanese is getting rusty. Grrr!! Baka desu yo!
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私は同意｡バカですよ。
 
eskimospy said:
My advice wasn't ignored at all. The US undertook massive monetary stimulus and a greater degree of fiscal stimulus than any other developed country. Turns out we weathered the economic downturn better than pretty much any other developed country.
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Japan's stimulus was 3x larger per capita than the US stimulus.

It seems to be doing exactly what it was intended to do:

20140605_misery_0.png


Chart of Yen's value against the dollar. A plunge of about 33% since 2012.
chart


It gets even funnier when you look at what Japan's largest pension fund is holding:
112513-gpif-asset-allocation.jpg


Let's buy Japanese government bonds that pay 1% interest when the inflation rate is at least 10x that. #winning
 
eskimospy said:
It will help everyone if you can pull the country out of the liquidity trap.
Click to expand...

Japan is facing something far greater than a liquidity trap. They have some very serious structural issues with their economy that won't be fixed by a loose monetary policy. Furthermore I really enjoy the Krugman-esque moving of goal post theorem you got going on here with fiscal stimulus, when it works praise it and when it doesn't work still praise it because it just wasn't enough. LOL
 
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eskimospy said:
My advice wasn't ignored at all. The US undertook massive monetary stimulus and a greater degree of fiscal stimulus than any other developed country. Turns out we weathered the economic downturn better than pretty much any other developed country.

It seems like the appropriate thing to do would be to thank those of us who pushed those policies despite your objections. Instead you both take the improved prosperity and rage against the very things that helped bring you that prosperity.

Very strange.
Click to expand...

However you're forgetting that the US currently has the benefit of being the reserve currency of the world. People want and desire our currency and that gives us far more leverage to manipulate our currency and interest rates to push the economy along. Japan? Not so much. In fact if US were to lose its reserve currency status we'd probably end up in the same boat if we were facing the same deep ingrained structural issues with the economy that Japan is facing.
 
DucatiMonster696 said:
http://www.bloomberg.com/news/2014-...ctedly-contracts-as-abe-weighs-tax-delay.html

They have basically created a trap by refusing to deal with the structural issues their economy is facing. Japan's massive government spending (relative to their GDP) and a negative population growth can't be solved by inflating their away currency and raising taxes. All they are doing is hurting the little guy/gal in Japan for little gain. Furthermore the confrontational pro-militarist government policies were pretty clear signs these guys were desperate to cover up the fact that they were to embark on a economic policy that was going to hurt the little guy. I guess they need and wanted the Japanese people to be distracted with their confrontations with China to so that they would ignore the damage they were doing to their currency and standard of living.
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Religion. It solves population decline in a snap.
 
eskimospy said:
It will help everyone if you can pull the country out of the liquidity trap.
Click to expand...

Texashiker said:
You are not explaining crap.

Japan is facing the same problems we are. An aging population on a fixed income, jobs gone to china, wage stagnation, and your answer is inflation?

How is inflation going to bring jobs back to japan, or the US?
Click to expand...

What he is talking about that Japan is in a situation where their central bank no longer has effective mechanisms to influence the pace of the economy through monetary policy. In normal times the central bank can move % rates up and down to tamp down inflation, or accelerate the economy. That lever is broken in Japan. % are near 0, and there is no effect on econ accel, and there is no inflation penalty. This is known as a liquidity trap.

There is a calculation you can do to estimate "ideal" % rate. Doing this in an liq. trap yeilds a negative number, which is nonsensical.They need to do something else to move the needle.

Lack of inflation/deflation is bad as it is a disincentive to investment. THIS is what you are trying to improve and get the econ going. Its not the pensioners you need to focus on, its businesses and capital investment & hiring.

If just sitting on a pile of cash is more profitable than taking investment risks and hiring, that's what will happen. This doesn't create jobs.

Also, deflation is bad for nearly everyone. For consumers, why buy today when it will be cheaper tomorrow? So you don't. No buying, no jobs.

If I invest/buy in something and take on debt, the value of the remaining debt only increases over time. Think about your house, you take out a mortgage based on 25% of your income in monthly payments. Say value of income is fixed, in 10 years, that payment will rise to 33% of your income. Do you still want to buy/invest? No.

They need to raise longterm inflation expectations. Make businesses and people want to buy/invest today as it will only get more expensive in the future and your cash buys less.

Then it makes business sense to buy equipment, houses, factories, cars, eg create demand. Demand is what creates jobs.

And yes, worrying about the poor bond holders in not in the best interest of Japan. The debt/gdp is high ~250%, but the % rates are insanely low, less than 1%. Its fine, there will not be a loss of confidence/run on bonds anytime soon. What will kill them is deflation and a shrinking economy.

They need a mix of growth and inflation to get them out of the trap they are in.
 
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