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Will Japan go bankrupt?
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Pitarou



Joined: 16 Nov 2009
Posts: 894
Location: Narita, Japan

PostPosted: Thu Jan 09, 2014 5:16 am    Post subject: Reply with quote

... and that's a best case scenario, by the way. In practice, if Japan were forced to make a quick sale it would get much less than the full notional value of those assets.
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G Cthulhu



Joined: 07 Feb 2003
Posts: 1304
Location: Way, way off course.

PostPosted: Thu Jan 09, 2014 5:49 am    Post subject: Re: Will Japan go bankrupt? Reply with quote

You're missing the important point that public debt simply doesn't matter: Japan, in the sense you're using debt here, is already bankrupt. Like the US, it can keep buying it's own debt for as long as it wants. And the reason it can do that is simply because, like the US, the entire global system/shell game collapses if anyone admits that the US or Japan are bankrupt and acts accordingly. In the context of Japan and the US the only thing that matters is operating debt/cash flow ratios.

Thank you, Chicago School economics: making fantasy come true against the reality of mathematics through sheer fear & willpower. :roll:
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Pitarou



Joined: 16 Nov 2009
Posts: 894
Location: Narita, Japan

PostPosted: Thu Jan 09, 2014 6:21 am    Post subject: Re: Will Japan go bankrupt? Reply with quote

G Cthulhu wrote:
You're missing the important point that public debt simply doesn't matter: Japan, in the sense you're using debt here, is already bankrupt. Like the US, it can keep buying it's own debt for as long as it wants. And the reason it can do that is simply because, like the US, the entire global system/shell game collapses if anyone admits that the US or Japan are bankrupt and acts accordingly. In the context of Japan and the US the only thing that matters is operating debt/cash flow ratios.

Thank you, Chicago School economics: making fantasy come true against the reality of mathematics through sheer fear & willpower. Rolling Eyes

You wish.
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rxk22



Joined: 19 May 2010
Posts: 902

PostPosted: Fri Jan 10, 2014 11:40 pm    Post subject: Reply with quote

steki47 wrote:
Pitarou wrote:
You paint quite an appealing picture. But I think the transition is going to be pretty ugly. In my most pessimistic moments, I see the pieces set out for a major war with China.

But that's just me scaremongering. I'm not really qualified to discuss the political situation.


I am hardly qualified to make economic predictions, but here I am. I am trying to be quasi-optimistic on the economic front. War with China sounds really ugly and it could poetentially mess up much of Asia.

This guy makes a few good points:

http://thediplomat.com/2013/02/7-reasons-china-and-japan-wont-go-to-war/?allpages=yes

Quote:

1. Beijing’s nightmare scenario. China might well win a war against Japan, but defeat would also be a very real possibility.
2. Economic interdependence.
3. Question marks over the PLA’s operational effectiveness.
4. Unsettled politics.
5. The unknown quantity of U.S. intervention.
6. China’s policy of avoiding military confrontation.
7. China’s socialization. China has spent too long telling the world that it poses no threat to peace to turn around and fulfill all the China-bashers’ prophecies.


I hope this guy is not being too optimistic.


Those are some good points, though I think that Japan needs China far more than China needs Japan.

I don't mind having a strong country, but Abe is just trolling China and S Korea at this point. he isn't helping at all. I am sure it is not only hurting Japanese companies in China, but also tourism from China.
Heck I saw a bus of Chinese in a hucklebuck are in Pennsylvania. That is some serous revenue they are missing out on for being stupid.
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Cool Teacher



Joined: 18 May 2009
Posts: 856
Location: Here, There and Everywhere! :D

PostPosted: Sun Jan 12, 2014 11:42 am    Post subject: Reply with quote

Hi there folks I dont know anything about finances but I saw this news articles and thought ti would be useful for people discussint things here. I dont know how true it is but they say Japan is doing well now and Eurpe should follow them. Surprised

Quote:
Extraordinary boldness on the part of Japan’s leaders has jump-started an economic recovery and sent the Tokyo stock market soaring. Could the same be about to happen in Europe?
In a multi-pronged attack on Japan’s decades-long economic stagnation, its central bank is printing a mountain of new money. This has revitalised exporters by devaluing the yen and turned the tide in the war against falling prices – which sound attractive but actually suck the life out of economies by encouraging people to delay spending and save instead.


http://www.telegraph.co.uk/finance/personalfinance/investing/shares/10562884/Will-Europe-follow-Japan-and-send-its-stock-market-soaring.html

Also I odnt think there will be a war beteern China and Japan. Cool
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Solar Strength



Joined: 12 Jul 2005
Posts: 560
Location: Bangkok, Thailand

PostPosted: Sun Jan 12, 2014 1:34 pm    Post subject: Reply with quote

Japan is going to sink, given enough time.

I blame the United States. They should have taken the same brutal hard line with the Japanese like the Japanese did to Taiwanese, Koreans and the Chinese, etc. when they were overrunning large parts of Asia.

But they didn't. They elected to be benign rulers and largely left the Japanese to their own ways.

Much to their detriment.
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Big_H



Joined: 21 Dec 2013
Posts: 63

PostPosted: Sun Jan 12, 2014 1:38 pm    Post subject: Re: Will Japan go bankrupt? Reply with quote

Pitarou wrote:
G Cthulhu wrote:
You're missing the important point that public debt simply doesn't matter: Japan, in the sense you're using debt here, is already bankrupt. Like the US, it can keep buying it's own debt for as long as it wants. And the reason it can do that is simply because, like the US, the entire global system/shell game collapses if anyone admits that the US or Japan are bankrupt and acts accordingly. In the context of Japan and the US the only thing that matters is operating debt/cash flow ratios.

Thank you, Chicago School economics: making fantasy come true against the reality of mathematics through sheer fear & willpower. Rolling Eyes

You wish.


I might be missing something here but doesn't G have a point about Japan's debts being internally owed by the government to its own banks rather than to other countries like many of the euro area members do? That and the point that though it is declining in positions, it still has the 3rd largest economy in the world which should help out-rule the severity of its possible market crash according to its economy's doomsayers?

I hold a degree in macroeconomics and... oh wait, actually no I don't. Just like everyone else in this thread Razz (i.e. no need to keep reminding ourselves)
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Pitarou



Joined: 16 Nov 2009
Posts: 894
Location: Narita, Japan

PostPosted: Sun Jan 12, 2014 2:22 pm    Post subject: Reply with quote

Cool Teacher wrote:
Hi there folks I dont know anything about finances but I saw this news articles and thought ti would be useful for people discussint things here. I dont know how true it is but they say Japan is doing well now and Eurpe should follow them. Surprised

Quote:
Extraordinary boldness on the part of Japan’s leaders has jump-started an economic recovery and sent the Tokyo stock market soaring. Could the same be about to happen in Europe?
In a multi-pronged attack on Japan’s decades-long economic stagnation, its central bank is printing a mountain of new money. This has revitalised exporters by devaluing the yen and turned the tide in the war against falling prices – which sound attractive but actually suck the life out of economies by encouraging people to delay spending and save instead.


http://www.telegraph.co.uk/finance/personalfinance/investing/shares/10562884/Will-Europe-follow-Japan-and-send-its-stock-market-soaring.html

Oh, for fuсk's sake. I have better things to do than enumerate all the things that are wrong with that article.

The Nikkei is an indicator of the nation's economic health, but hardly a perfect one. In this case, the Nikkei rose for two reasons:

1. The Bank of Japan is conjuring up money out of thin air to buy Japan Government Bonds at prices that don't make sense. Much of that money ends up on the Tokyo Stock Exchange.

2. All these yen appearing out of nowhere pushes down the price of the yen. This is great for companies like Honda that pay their workers in yen but sell their cars in dollars. And these are the companies whose shares dominate the Nikkei.

So a weakened yen is a is good for Honda, but Honda isn't representative of Japan. Ever since they shut down the nukes, Japan has been a net importer, so any fall in the value of the yen has the effect of a pay cut.

In short, this is good news only if you think it would be nice for Japan to return to being a low wage manufacturing exporter, like back in the '50s, or like China still is today. rxk22 seems to like that idea. But, like I said earlier, the transition is going to be extremely painful.
Cool Teacher wrote:
Also I odnt think there will be a war beteern China and Japan.

On that point, your guess is as good as mine.


Last edited by Pitarou on Sun Jan 12, 2014 2:45 pm; edited 1 time in total
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Pitarou



Joined: 16 Nov 2009
Posts: 894
Location: Narita, Japan

PostPosted: Sun Jan 12, 2014 2:34 pm    Post subject: Re: Will Japan go bankrupt? Reply with quote

Big_H wrote:
I might be missing something here but doesn't G have a point about Japan's debts being internally owed by the government to its own banks rather than to other countries like many of the euro area members do?

It makes it worse.

When Greece defaulted on its debt, Cypriot bank depositors get shafted. Part of the reason Germany stepped in was to protect German banks. The pain was spread out a little.

If Japan defaults on its debt, it will shaft its own.

The government can't just prop the banks up. When confidence in the government of Japan collapses, so will confidence in the banks it's propping up, and without confidence a bank is nothing.

The final "solution" is, to print money. And that's what's happening. Now. It's happening now. Get it? The time bomb is ticking.
Quote:
That and the point that though it is declining in positions, it still has the 3rd largest economy in the world which should help out-rule the severity of its possible market crash according to its economy's doomsayers?

Again, that makes it worse.

Greece could turn to the IMF and Germany for help. There's nobody big enough to bail Japan out.

(Hmm ... actually, it's just occurred to me that China might be able to help. That would be an interesting outcome, to say the least.)
Quote:
I hold a degree in macroeconomics and... oh wait, actually no I don't. Just like everyone else in this thread Razz (i.e. no need to keep reminding ourselves)

MA (Cantab) Economics

I specialised more in the mathematical / econometrics side, but I know enough to occasionally recognise bullshit. And, as I keep saying, all the optimistic arguments look like bullshit to me.
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rxk22



Joined: 19 May 2010
Posts: 902

PostPosted: Mon Jan 13, 2014 7:53 pm    Post subject: Reply with quote

Don't misquote me here. I don't think Japan should emulate China as a model. I think that Japan, as it is now minus a third of it's populace, and with out the rural construction that it has to prop up, can be very successful. As it can do a lot of high tech mnfg and heavy machinery.

Or it could look a lot like Taiwan. A lot of mid sized, mobile/nimble companies, and a huge investment in China
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steki47



Joined: 20 Apr 2008
Posts: 654
Location: BFE Inaka

PostPosted: Mon Jan 13, 2014 9:05 pm    Post subject: Reply with quote

rxk22 wrote:
I don't think Japan should emulate China as a model.


Nor do I. Japan should not try to race China to the bottom of low-end manufacturing. Rather, Japan should follow Germany's example and focus on high-end electronics (which they are doing now).

Japan should also try to move more factories to countries such as Malaysia and Thailand and away from China.
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steki47



Joined: 20 Apr 2008
Posts: 654
Location: BFE Inaka

PostPosted: Mon Jan 13, 2014 9:09 pm    Post subject: Re: Will Japan go bankrupt? Reply with quote

Pitarou wrote:

MA (Cantab) Economics

I specialised more in the mathematical / econometrics side, but I know enough to occasionally recognise bullshit. And, as I keep saying, all the optimistic arguments look like bullshit to me.



Except that economics is a form of bullshit. So is money in that sense. Plus Japan is great at making losses disappear and ignoring reality.
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Pitarou



Joined: 16 Nov 2009
Posts: 894
Location: Narita, Japan

PostPosted: Mon Jan 13, 2014 9:51 pm    Post subject: Re: Will Japan go bankrupt? Reply with quote

steki47 wrote:
Pitarou wrote:

MA (Cantab) Economics

I specialised more in the mathematical / econometrics side, but I know enough to occasionally recognise bullshit. And, as I keep saying, all the optimistic arguments look like bullshit to me.



Except that economics is a form of bullshit.

Despite my grumbles earlier (sorry for cussing at you, Cool Teacher) I'm happy to discuss reasonable facts and opinions with people on this thread. But now it seems to have degenerated into:
Quote:
Big_H: Yeah, but none of us know anything anyway.

Pitarou: As it happens, I devoted several years of my life to studying these matters in great depth and, while I don't claim to have all the answers, I can spot the bullshitters.

steki47: But they're all bullshitters. Your whole degree was bullshit.

Pitarou: Um ... bits of it were. I'll grant you that.

I'd better quit while I'm ahead.
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steki47



Joined: 20 Apr 2008
Posts: 654
Location: BFE Inaka

PostPosted: Tue Jan 14, 2014 4:16 am    Post subject: Reply with quote

Not attacking you personally. Just questioning the field of economics. Willing to listen, though.

My degree is in anthropology. Lots of BS there as well.
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Big_H



Joined: 21 Dec 2013
Posts: 63

PostPosted: Tue Jan 14, 2014 12:35 pm    Post subject: Reply with quote

Good enough. I don't see the need to turn the thread to a personal matter either, it's a fine topic and everyone's input is appreciated. But choose your words as if you were English teachers.
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