Jay, Re your messageless negro ancestor, perhaps the medium is the message. You have her DNA hardwired in every cell. There's more to cyberspace than a slogan, so perhaps the wiring is as important [or more important] than the perhaps dodgy 'bugs follow me' 'all or nothing' script. The DNA has been filtered over millions of years whereas those slogans are wacky ideas generated to meet specific needs some individuals experienced in recent times. [Or cliches the proponents left on the wall while they followed other precepts].
Survival is the only message that matters. So far, so good. But, looking around, our human DNA is little distinguished from bugs, which are more prolific and mice, which seem to be holding their evolutionary position very handily. Even though those bugs and stuff don't have the fun of a good slogan 'Who Dares Wins' [or, all too often, doesn't] they seem to be right there alongside us and often inside us and often eating us! So they are doing okay. And they do it without CDMA, which is simply amazing!
Now, will Japan be evolved out of the equation or do they have some DNA and slogans which will get them by?
<Here is the short and curly version of a script that seems to have unsettled you slightly:
(a) Capital is being mistreated all around the globe
(b) Investors are being lied to by all, including the officialdom
(c) A group of folks believe they can export paper in exchange for Toyotas forever
(d) Japan-US trade account for 48% of global trade
(e) Japan account for 40% of global savings
(f) Trade is declining
(g) Japan has been on the precipice for 12 years
(h) Japan has tried everything short of dumping cash onto the asphalt of Tokyo
(i) Japan is getting old and dying
(j) Japan needs money
(k) Japan has money, just not in Japan
(l) Given the state of Japanese economy and prospect, Japan money is surprisingly strong, relative to most of its history
(m) Japan money may return to Japan
(n) Japan money, if not returning to Japan, may exit places where they are mistreated
Now, between this script and your “everyone will own a chunk of Q and export beef to the USA”, we have our differences in perception of risks vs. rewards, potential upside to possible downside. >
I'm with you up to f. Trade isn't declining much with Japan and even if it is, with a declining and aging population, that's not all that surprising. At the tender age of 53 I find it tough to work up the enthusiasm for yet another round of consumer durables and other purchases. By 70, I dare say I'll sit around watching Days of our Lives and spending even less.
Nor would I be inclined to be down at the Toyota factory, twirling the dials on the robotic factory to increase the production rate or variety of paint colours. So, it's perhaps natural that production has peaked and is easing off a bit. One man I know in Japan has pretty much retired [after decades of morning until midnight shifts making Fujitsu hum]. His son is less inclined to the arduous life, but still putting in a goodly number of hours.
Perhaps there is a cultural shift to take it a bit easier, having earned the highest standard of living in human history, purchasing power parity and a few quality of life issues notwithstanding. I know that I've done that - having made it, some of us are inclined to put our feet up and go Troppo in Fiji or Trinidad, funding our fun via an ATM hooked up to our global financial systems.
Is trade with Japan declining? Their oil import costs are down dramatically from a year or so ago.
"The precipice" stuff gets a bit tiring. The whole world has been tiptoeing around the deflation precipice for so long that it's not even scary anymore. Maybe there isn't really a precipice in Japan. I can't see one. Sure, a few banks might have to be nationalized - Japan has got plenty of printing capacity to do that. But a precipice implies a freefall to disaster. It's good for media to use that word, but they make up all sorts of nonsense. As you say, investors are lied to all the time. Precipice is a lie! There isn't one. Is there? Where is it? How far is it to fall? Are we not perhaps on the ground floor and it'll be more like hopping out the back window?
12 years on a precipice without falling implies some good judgement or lack of a precipice.
I don't think Japan has tried everything yet. I think they are doing okay and don't need to try everything yet. I hope we hear if they start dumping cash on the asphalt because I'd help pick it up.
Japan is getting old and dying? Well, they have one of the most uniform age distributions in human history. Which implies a great deal of maturity, judgement and sense, [a corollary of age], while still having plenty of young people to twirl the dials at the robot factories and supervise CDMA phone production in China. Sure, those over 80 are dying, but that tends to happen to lots of people around the world [some at even younger ages].
With 120 million people, they are far from running out of them and the Yamanote Line is pretty crowded still. Akihabara is full of CDMA and people. Their GNP per capita [and total] is still about highest in the world. We have a bit to do with Japanese [young people] and it's hard to detect any worries along the lines you mention. The girls do prefer foreign guys and the snowboard gang likes the freedom to be wild in NZ. But overall, Japan is doing very well.
Japan needs money? Well, guess what. Even you and I are hunting it and I've noticed nearly everyone on this little globe is in hot pursuit. I think Japan needs it a lot less than nearly everyone else. That's why they are prepared to pay more for things than the rest of us. They'd rather have their rice import restrictions than rice at 1/10th the cost. If rice was a big part of the national budget, I think Thai rice would be unloaded day and night on the docks in Tokyo.
As you say, Japan has money, though not in Japan. But do they really need it in Japan right now? I guess you are saying the answer is yes, to pay debts. So although they are loaded, they have to deleverage because the Nikkei and other declines have put the pressure on. So they sell and repatriate some of their remaining savings to rebalance the books. How much selling is needed? That's the $64,000 question.
With the USA economy now being considered back on track after an exciting couple of years, maybe Japanese won't have to sell and repatriate funds. The Nikkei has risen quickly back from the low a couple of weeks ago. So the pressure is off there. The Japanese govenment could simply issue 1,000,000 yen to every person on the electoral roll in Japan. That would make some people scramble for cover!! That would make deflation take a pause. Even 100,000 yen payments, once a month, until things settle down, would help.
I think they have some ju-jitsu tricks available and I'll not bet on Japan going broke any time soon. But I'm open to persuasion.
Enjoy the sunshine, DNA and family slogan links! It's all good fun,
Mq |
