business

Japan's core consumer prices slip into deflation for first time in three years

5 Comments
By Daniel Leussink

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Now cue all the people who have argued with me over the years about all the massive inflation Japan would experience if it continued to unleash its massive money-printing and fiscal spending operations. Hello? hello?

Oh, and of course, the "debasement" of the yen. LOL.

Neo-classical economic theory is dead, my friends.

-2 ( +1 / -3 )

Now cue all the people who have argued with me over the years about all the massive inflation

First deflation, since nobody can afford to buy anything, then inflation after the economy hits bottom and starts to see increasing spending. If you are caught sitting on a pile of yen when that happens, you can kiss your savings good-bye.

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Prices do not "deflate", the value of assets does... Get it right.

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You have stock, and no customers - because those customers have been told to stay at home.... So what do you do ?

Even with delivery companies, the same issue applies - One of my local Pizza Companies - which used to have good Pizzas made by people who knew how to make Pizzas, has found itself having to sell at a discount, because they've got temporary staff in, keeping things going and the quality has nose dived. ( I know that, since the new staff really don't know how to cook Pizza! so... I'm giving them a miss for a while... sadly this is a common reaction I feel, that others may be doing similarly too - and as such, other Companies will fail in time due to this outbreak, just a bit further out than now.)

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@expat - you're splitting at hairs here.

I buy a BitCoin today, and suddenly tomorrow morning it's value has halved.

My Asset has halved, but so too has the value I could (potentially) sell it at.

In Japan the old practise of recording Book value of assets, (which is I think finished now.... ) used to mean, when you bought something at price X is was therefore seen to be worth X on your balance sheet when reporting your Company value.

Clearly, as we have seen with Softbank recently - when you buy "We Work" and it transitions to "We Don't Work", then that Balance sheet interpretation of that said Asset goes from X to zero (well near enough).

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