Japan finds decade, realizes it was never lost

[The Minsky Moment]

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.

[Ideologue]

Why not just bailout private debtors with printed money?  Oh, right.  The hyperinflation that never comes.

[Admiral Yi]

  Plenty of countries have experienced hyperinflation Ide.

[Razgovory]

Plenty of countries have experienced hyperinflation Ide.

It's fairly rare.

[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.

[Ideologue]

Plenty of countries have experienced hyperinflation Ide.

I'm not saying do it forever.

[Razgovory]

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.

[Josquius]

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.

[jimmy olsen]

Yeah, there's a lot more run down older buildings in Japan. Everything in Korea looks shinny and new in comparison.

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.

[The Minsky Moment]

Why not just bailout private debtors with printed money? 

Three letters: B-O-J

[Ideologue]

Yeah.

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

[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.

[The Minsky Moment]

Yeah.

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

It only took 20 years.

[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?