Japan finds decade, realizes it was never lost

Started by Jacob, August 12, 2013, 11:25:26 AM

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The Minsky Moment

Quote from: Zanza on August 20, 2013, 03:33:17 PM
As there was a deflation in Japan for most of the last two decades they probably have a higher domestic purchasing power now than they had in 1992 too. So as Minsky said, their "growth" could be through price decreases. Are you getting richer when your income stagnates but everything you buy gets cheaper all the time? I guess so...

Yes.
The problem with growth through deflation is that it doesn't work very well for credit-based economies, because deflation keeps expanding the value of the existing private debt stock.
Price decreases do increase consumer purchasing power and the stock of wealth.  But debtors are crushed.  And who were the debtors?  Japanese companies that financed themselves primary through bank debt.
Result: zombie companies left on life support by zombie banks.  That's the lost decade in a nutshell.
The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.
--Joan Robinson

Ideologue

Why not just bailout private debtors with printed money?  Oh, right.  The hyperinflation that never comes.
Kinemalogue
Current reviews: The 'Burbs (9/10); Gremlins 2: The New Batch (9/10); John Wick: Chapter 2 (9/10); A Cure For Wellness (4/10)

Admiral Yi

 :huh: Plenty of countries have experienced hyperinflation Ide.

Razgovory

I've given it serious thought. I must scorn the ways of my family, and seek a Japanese woman to yield me my progeny. He shall live in the lands of the east, and be well tutored in his sacred trust to weave the best traditions of Japan and the Sacred South together, until such time as he (or, indeed his house, which will periodically require infusion of both Southern and Japanese bloodlines of note) can deliver to the South it's independence, either in this world or in space.  -Lettow April of 2011

Raz is right. -MadImmortalMan March of 2017

Admiral Yi

It's fairly rare because most central bankers are not total pinheads.

MadImmortalMan

In historical terms it's not only common, it's endemic. Of course there haven't been the kinds of central banks we have now over the course of history.
"Stability is destabilizing." --Hyman Minsky

"Complacency can be a self-denying prophecy."
"We have nothing to fear but lack of fear itself." --Larry Summers

Ideologue

Quote from: Admiral Yi on August 20, 2013, 08:33:50 PM
:huh: Plenty of countries have experienced hyperinflation Ide.

I'm not saying do it forever.
Kinemalogue
Current reviews: The 'Burbs (9/10); Gremlins 2: The New Batch (9/10); John Wick: Chapter 2 (9/10); A Cure For Wellness (4/10)

Razgovory

Quote from: MadImmortalMan on August 20, 2013, 09:27:18 PM
In historical terms it's not only common, it's endemic. Of course there haven't been the kinds of central banks we have now over the course of history.


What is common?  Hyper inflation or central banks not run by pinheads.
I've given it serious thought. I must scorn the ways of my family, and seek a Japanese woman to yield me my progeny. He shall live in the lands of the east, and be well tutored in his sacred trust to weave the best traditions of Japan and the Sacred South together, until such time as he (or, indeed his house, which will periodically require infusion of both Southern and Japanese bloodlines of note) can deliver to the South it's independence, either in this world or in space.  -Lettow April of 2011

Raz is right. -MadImmortalMan March of 2017

Josquius

Quote from: Zanza on August 20, 2013, 03:33:17 PM
Stuff on the world market is paid in USD, so they can now import much more stuff for the same amount of Yen. As there was a deflation in Japan for most of the last two decades they probably have a higher domestic purchasing power now than they had in 1992 too. So as Minsky said, their "growth" could be through price decreases. Are you getting richer when your income stagnates but everything you buy gets cheaper all the time? I guess so...

They're an export driven economy.
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jimmy olsen

Quote from: Tyr on August 20, 2013, 10:44:13 AM
Quote from: jimmy olsen on August 19, 2013, 05:04:17 PM
Yeah, there's a lot more run down older buildings in Japan. Everything in Korea looks shinny and new in comparison.
:hmm:
I'm not so sure about that. I saw a lot of pretty ghetto run down areas in Korea. It seems to have the same buildings designed to last 5 minutes and who cares how they look philosophy and it did have economic troubles of its own back in the late 90s iirc.

There was this one really cool area in Seoul, it was a street full of electronics components shops which was beneath what looked like a disused highway, which was in turn lined with closed down shops. It was fascinating, would be a great place to shoot a post-apocolptic themed music video.
In a city as big as Seoul there are going to be ghettos, but most buildings look new. In Japan, where ever I went, most buildings off the main streets looked at least 30 years old.
It is far better for the truth to tear my flesh to pieces, then for my soul to wander through darkness in eternal damnation.

Jet: So what kind of woman is she? What's Julia like?
Faye: Ordinary. The kind of beautiful, dangerous ordinary that you just can't leave alone.
Jet: I see.
Faye: Like an angel from the underworld. Or a devil from Paradise.
--------------------------------------------
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The Minsky Moment

The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.
--Joan Robinson

Ideologue

Yeah. :(

I understood they were starting to do a lot more though lately?
Kinemalogue
Current reviews: The 'Burbs (9/10); Gremlins 2: The New Batch (9/10); John Wick: Chapter 2 (9/10); A Cure For Wellness (4/10)

MadImmortalMan

They are doing easing like the Fed is. More than the Fed is, if you change to Japan's scale. They aren't bailing out anyone though as far as I know.
"Stability is destabilizing." --Hyman Minsky

"Complacency can be a self-denying prophecy."
"We have nothing to fear but lack of fear itself." --Larry Summers

The Minsky Moment

Quote from: Ideologue on August 21, 2013, 03:58:18 PM
Yeah. :(

I understood they were starting to do a lot more though lately?

It only took 20 years.
The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.
--Joan Robinson

MadImmortalMan

They've done like 26 stimulus packages and ten rounds of QE in those years. You think it was just not enough? Maybe they actually needed the current global environment of easing in order to do the massive kind they actually needed without the yen getting too hot?
"Stability is destabilizing." --Hyman Minsky

"Complacency can be a self-denying prophecy."
"We have nothing to fear but lack of fear itself." --Larry Summers