Posted on 10/16/2009 2:03:09 PM PDT by posterchild
HEDGE-FUND MANAGER OF OUR acquaintance waxes apocalyptic when painting Japan's economic future. Within 50 years or so, he contends, high-tech aircraft will be taking Chinese and American tourists on fly-overs there to view the dilapidated remains of what was once the world's second-largest economy. By then, all that survives will be blighted megalopolises like Tokyo, populated mostly by the elderly, and decaying, weedchoked highways, bridges and bullet-train right-of-ways, spectral reminders of a once-vibrant society that lost its way.
There is, of course, more than a measure of hyperbole in his Spenglerian ruminations. Nonetheless, the manager's fund is positioning itself to profit from a sovereign debt crisis he sees coming in three to four years that will devastate prices of Japanese government bonds (JGBs), while sending longterm interest rates soaring. In the process, he says, the yen will plummet as domestic and foreign investors flee Japanese assets.
To many, this doom-and-gloom scenario is preposterous. But Japan's economy has been in despond since 1990, when the island nation was laid low by a crash in its stock and real-estate markets and resulting bad-debt problems slammed its banking system. Since then, massive government stimulus programs have generated huge structural budget deficits rather than the solid, self-sustaining economic growth they were designed to foster. Japan's gross national debt now equals 217% of its gross domestic product, compared with 81.2% for the often-maligned U.S. and an average of 72.5% for the G-20 nations (the 19 largest economies, plus the European Union), according to the International Monetary Fund. And the burden could become crushing as over the next 40 years, Japan's population falls by more than 20% and the number of working age Japanese shrinks by 41%.
(Excerpt) Read more at online.barrons.com ...
Aren’t there a lot of Chinese who would love to live in Japan and keep the dream alive?
When a financial analyst writes a sentence like that I have to wonder. I am permitted dumb mistakes, professionals are not.
Leftist-statist people in the developed world have completely stopped making babies.
This is the single most important phenomenon of our lifetime, and probably will be the most important phenomenon of the next 1000 years or so - we haven't seen anything like this since Rome collapsed circa 450AD to 475AD.
The Chinese aren’t making babies either.
Literary reference ? John Bunyan "Pilgrims Progress" "Slough of Despond" ?
Aren’t there a lot of Mexicans that would keep the Japanese machine going?
No mistake. despond = despondency.
Passing through as a tourist recently it appeared to be a very nice place to live (though merely as a tourist I don’t have the whole picture such as what it would be like to start a business there, pay taxes, etc.). People seemed very polite, honest, and sincerely interesting in providing good service and being helpful.
Not sure I understood their sense of humor though - 2 people in japan tried to convince me that Obama was awarded the Nobel Peace Prize. It was hysterical...
interesting=>interested
5:00AM Tuesday Aug 22, 2006
By Angus Whitley
SINGAPORE - Singapore Prime Minister Lee Hsien Loong has urged the nation to produce larger families and accept more immigrants to maintain economic growth, warning that the city-state's shrinking population presents a "major problem".
"To sustain our growth and prosperity, we need to have enough people living and working in Singapore," Lee, 54, said in a national-day speech on Sunday. He said he wants overseas Singaporeans to come home and called on older workers to retrain to take on manufacturing jobs.
Singapore, which has suffered three recessions since 1998, needs foreign manpower to fill posts created by the longest period of expansion in more than five years. The city should grow while it can, because an oil crisis would send energy prices soaring and put the economy into reverse, Lee said.
[snip]
I have heard this and variations on this for over a decade, but the yen is now very strong (near record-breaking levels, for that matter) and interest rates are still very low.
Wonder how much of the yen appreciation is due to reverses in the ‘currency carry trade.’
Some, of course. But I strongly doubt that's the sole cause for the massive movement of the yen.
I agree, I’m being unnecessarily picky and emphatically wrong. However, does an economy really lose courage or hope; become disheartened?
Not literally. People can.
What I'd object to is the assumption that a declining population must equal a declining economy or standard of living. That's one matter on which I part company with most free-market types. That may be true but is, IMO, untested.
Jimmy Carter thought so ! Which I agree is not much of an argument. What a doofus.
Before Japan goes into oblivion, they will make lots of robots in an affordable way. No more foreigners to do the dirty work for Japanese.
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