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Look Out - Japan is a Powder Keg
Townhall.com ^ | December 29, 2011 | Mike Shedlock

Posted on 12/29/2011 6:25:43 AM PST by Kaslin

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1 posted on 12/29/2011 6:25:47 AM PST by Kaslin
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To: Kaslin
Japan blames this mess on a strong Yen and Thailand’s worst flooding in almost 70 years. The flooding crippled the output in Southeast Asia of Japanese companies such as Sony Corp. and Honda Motor Co.

It seems most every industrialized nation that has exported many of its manufacturing plants and jobs to cheap labor nations ends up with a mushrooming debt problem.

2 posted on 12/29/2011 6:34:39 AM PST by Will88
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To: Kaslin

Japan really doesn’t produce anything other than strange people and cartoons.

They are sunk because they depend on everyone else.


3 posted on 12/29/2011 6:50:35 AM PST by VanDeKoik (1 million in stimulus dollars paid for this tagline!)
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To: Will88

This could be why Honda is building three new assembly plants in the US...


4 posted on 12/29/2011 6:51:15 AM PST by Eric in the Ozarks (Gimme that old time fossil fuel.)
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To: Will88
This is the third article this morning that rates a "deflation ping"

scary.

5 posted on 12/29/2011 6:59:11 AM PST by spokeshave (Ron Paul finally lit a match after dousing himself with gasoline)
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To: Will88
It seems most every industrialized nation that has exported many of its manufacturing plants and jobs to cheap labor nations ends up with a mushrooming debt problem.

Farming and industry create wealth. The value of the output is greater than the value of the input and labor. All other fields of endeavor just take a cut.

This is not always a bad thing. Transportation for example moves goods from where they are produced to where they are needed, taking a cut for the essential service provided. However many cut takers provide non essential services, simply keeping track of what the wealth producers are doing, but not actually helping the process along. At first these are necessary, the shipping clerk, the guy in the mail room, an accountant to make sure everyone gets paid.

However as time goes on the amount of this dead weight on the system increases to a point it can no longer be sustained. Either because of excess regulation, and the legions of bureaucrats it spawns, or the departure of industrial base. In our case we suffer from both. Because farming and especially industry create a lot a value you can support a lot of cut takers for every value producer. But at some point there isn't enough industry to support the cut takers. Then comes the debt to keep the system running and the bureaucrats employed.
6 posted on 12/29/2011 7:06:13 AM PST by GonzoGOP (There are millions of paranoid people in the world and they are all out to get me.)
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To: Eric in the Ozarks
This could be why Honda is building three new assembly plants in the US...

I think Japan initially started building auto plants in the US to fend off the growing pressure for some restrictions as they began to take a larger and larger share of the US auto market. Now, producing where a firm plans to sell makes a lot of sense and it avoids several potential problems. US auto makers have done this in Europe since pre-WWII.

Honda is also building a new plant in Mexico that will employ 3,000.

7 posted on 12/29/2011 7:29:23 AM PST by Will88
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To: Kaslin

General Macarthur called Japan a nation of 12 year olds. I believed the hysteria that Japan was going to rule the world, till I was stationed there for a year (84-85). I’ll be blasted by the Blank Slate Theory crazies, but basically Japan would love to revert to a norm of feudalism and stagnation instead of some stupid white liberals one world nonsense.


8 posted on 12/29/2011 7:30:54 AM PST by junta ("Peace is a racket", testimony from crime boss Barrack Hussein Obama.)
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To: Will88
"It seems most every industrialized nation that has exported many of its manufacturing plants and jobs to cheap labor nations ends up with a mushrooming debt problem."

Attempting to replace real growth/production with debt? Probably looks great for a few years. Long enough to win a few elections, inflate stocks, increase housing prices, and increase bonuses for corp executives. Then the party ends, which is where we find ourselves today.

9 posted on 12/29/2011 7:30:54 AM PST by KoRn (Department of Homeland Security, Certified - "Right Wing Extremist")
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To: junta

Maybe another tour would convince you otherwise.


10 posted on 12/29/2011 7:35:37 AM PST by Eric in the Ozarks (Gimme that old time fossil fuel.)
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To: VanDeKoik
Japan really doesn’t produce anything other than strange people and cartoons.

Japan is the world's third largest manufacturer after the United States and China. It produces the largest manufacturing output per capita in the world. I don't know what you're talking about.

11 posted on 12/29/2011 7:35:46 AM PST by BfloGuy (The final outcome of the credit expansion is general impoverishment.)
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To: GonzoGOP
But at some point there isn't enough industry to support the cut takers.

Per Robert Rector of the Heritage Foundation, the US government now spends almost a trillion per year on welfare type programs for working age Americans and their families. Of course, 40% of that is borrowed money.

Medicaid is the biggest of those programs.

12 posted on 12/29/2011 7:36:01 AM PST by Will88
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To: VanDeKoik
They are sunk because they depend on everyone else.

Right. Instead of focusing on internal growth, they focus on a weak currency, exports, and maintaining the status quo. It's wrong, but it's popular with politicians, large established corporations, and can be sustained for a very long time.

13 posted on 12/29/2011 7:36:47 AM PST by Moonman62 (The US has become a government with a country, rather than a country with a government.)
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To: KoRn
Then the party ends, which is where we find ourselves today.

Yep, and we're just puzzling about how it will all be resolved, and maybe trying to prepare for it.

14 posted on 12/29/2011 7:39:21 AM PST by Will88
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To: GonzoGOP
Farming and industry create wealth. The value of the output is greater than the value of the input and labor. All other fields of endeavor just take a cut.

Yes, but they don't improve wealth by themselves. In the 1700's just about everyone was farming or making something. Science and technology increase efficiency so that each unit of input makes more units of output.

Those "cut takers" can actually enhance efficiency. I've created many analytical software systems that help a corporation plan huge expenditures of money. I take a small cut, but I've saved millions of dollars in waste. Keeping track of what a wealth producer is doing isn't non-essential; it's critical. Any company that doesn't do this will fail.

15 posted on 12/29/2011 7:40:03 AM PST by ElectronVolt
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To: Kaslin

The article’s title and some of the rhetoric implies that the author foresees some sort of violent eruption in or from Japan, should the anticipated economic events occur.

What, I wonder, would that be? Japan’s population is older, in the aggregate, than the population of The Villages, and there are fewer NRA members and a lower percentage of military retirees in Japan. Whom does he imagine is going to “explode”: the elderly, or the Lolitas in “Hello Kitty” costumes?


16 posted on 12/29/2011 7:41:13 AM PST by Tax-chick (I'm not being paid enough for this.)
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To: Moonman62
they focus on a weak currency

Japan's currency is the strongest it's ever been. They are still a manufacturing super-power and exporter because they've had no inflation for a decade. That is the result of the BOJ maintaining a stable monetary base.

When there's no inflation, technological advances result in productivity increases that are reflected in lowered prices to consumers. This has enabled Japan (and Germany, too) to maintain their trade surplus even in the face of a rising currency.

Japan doesn't need to develop its internal economy. Its internal economy is just fine as evidenced by the high standard of living and low (4.6%) rate of unemployment. Its government spending, on the other hand, is ridiculous.

17 posted on 12/29/2011 7:44:57 AM PST by BfloGuy (The final outcome of the credit expansion is general impoverishment.)
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To: ElectronVolt
Those "cut takers" can actually enhance efficiency.

I agree. "Cut taker" is the wrong term. Every person who contributes to the manufacture and sale of a product creates added value (wealth). There are two economic types: wealth creators and wealth consumers.

The largest wealth consumers are government, the health industry and education. There are tons more, of course, but those are the biggies.

18 posted on 12/29/2011 7:49:23 AM PST by BfloGuy (The final outcome of the credit expansion is general impoverishment.)
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To: BfloGuy

Instead of health “industry”, I should have specified health providers. The pharmaceutical companies and medical device manufacturers are wealth creators.


19 posted on 12/29/2011 7:50:48 AM PST by BfloGuy (The final outcome of the credit expansion is general impoverishment.)
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To: BfloGuy
It produces the largest manufacturing output per capita in the world.

And that's only way Japan could have become a wealthy nation since it has limited natural resources. And it also has limited agricultural, timber and mining, and had to import much of what it needed to build it's manufacturing industries.

The question now is how much of their manufacturing have they moved to cheap labor nations, and can what is left support their domestic employment needs and their aging population.

20 posted on 12/29/2011 7:51:22 AM PST by Will88
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