The new economy and Asian economy, an export flu?
The Asian economy demised is predicted many years now. Basic economical aspect of an export economy is unsound. If you print money to export material and labor, you may receive foreign currency back. If you can not spend the foreign currency except abroad, what can you buy to bring all the wealth back. The wealth becomes useless, if you own economy is weak; and standard of living is low. so, Japan leaves all the US currency in America, buying real estate, stock and bonds.
Sad but true, some real estate became worthless, some stocks became worthless, but the 30 year bonds are tied up until 30 years later. You lose money when you sell prematurely.
Now their own economy is weaker than ever, after all those years of printing money and borrowing from the government. What is awaiting them? Nothing but grief. The US currency can not buy anything their people can use. Cultural differences. They do not even sit on chairs. How can America sell them many many chairs.
Is America paying all those currency to Japan concerned. Not at all, we have their money, their goods and the labor they put into their goods. How can we help them? Tell them to close all their banks. Spend more of their money building transportation. Rebate some taxes so the Japanese government will be in more deficit. Then maybe, the government will save the banks by selling them bonds with better interest rate to cover interest lost with interest gained by bonds. It is a start but why close banks at all, if interest lost can be compensated by interest gained with bonds. Why weaken the economy further with Yen devaluation? Why not build disposable income for Japanese workers. A good day's pay, for a good day's work. Obsolescense and replacement for products, the Japanese customers want. Instead of making them pay more, just to promote export.
Rebuild Japanese capital; like what America is doing now. Fix up companies so that the stock is worth more. Fix up real estate so that the buildings will be worth more. Japan can be a wealthy country, if they don't sacrifice they own well being just to export. Self sufficiency and self reliance (strong Yen) is the way to go. Have a better standard of living. Japan deserves nothing less. |
