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'Abenomics' - panacea or peril for Japan?

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WHAT IS ABENOMICS? it's an imitation Of Economics. WHY DOES JAPAN NEED A CHANGE? infact it doesn't. WHY IT MATTERS false pride or because emerging markets are far ahead of it. HOW IS THE ECONOMY DOING SO FAR? worsening. WHY IS MARKET TURMOIL SHAKING CONFIDENCE IN ABENOMICS? refer to Top answer. WHAT TO EXPECT NEXT systematic down fall.

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Peril.

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In the 70s and 80s, Japan was an economic miracle and many around the world tried to imitate its success. There are many differences between the Japan then and the Japan now.

The current situation in Japan makes it very difficult for new businesses to start. The larger companies don't like competition and do their best to stifle it. This wasn't a problem in the boom years.

People were working harder, faster and longer hours. Children were at school on Saturday and Saturday was a work day. Industry and businesses were more productive and put out innovative products that were in strong demand. Japan's trade surplus was massive. Japan was exporting all over the world and importing comparatively little.

Internally, farm land in or near cities was divided up and sold for housing development. A few farmers who had been at an extreme poverty level at the end of WWII suddenly became extremely rich. Land speculation began and land prices reached astronomical levels.

These days production is down. People have far more leisure time. Japan is exporting less and less and importing more and more. Is it any wonder the economy is in poor shape?

If your income is 250,000 yen per month and you spend 260,000 monthly, all you are doing is sinking further into debt. You either have to learn to live within your means and cut down on the excesses or make more money.

If Abe insists on spending money, investment on sustainable environment friendly energy sources would save money for Japan in the future and help the economy in the long run.

Building bridges and tunnels is as likely to help the economy as redecorating your apartment would help to increase your salary.

Calling it "Abenomics" is PR and PR that's going to backfire as it will inevitably fail.

My guess is that this isn't Abe's word. Some bright spark of an "advisor" probably thought it up, knowing that Abe's egotism would lap it up.

And he did.

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Bertie your right on the ball and don't forget china and all the other cheaper production countries myanmar etc were not open for business in the 70s and 80s and didn't have the same relations with the USA as they do now so didn't produce all the items that Japan almost alone for that price could then. Wasn't really an economic miracle was just America found a cheaper place to make their garbage and now it's china then Myanmar then it will be Africa cheaper cheaper cheaper Japan cannot compete and USA doesn't need them that's all....competition.

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LDP solely responsible leading to sinking japan ... Next year Tax will be 8% and than 10% why abe needs extra 2% inflation.

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Abe is a nationalist, not an economist and he is simply using economics to try and bring about his 2013 version of "Beautiful Japan" .... once the sugar rush from the money printing wears off, he will have little to show for his little adventure...

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Wayne RobinsonJun. 03, 2013 - 12:29PM JST

economic miracle was just America found a cheaper place to make their garbage and now it's china then Myanmar then it will be Africa cheaper cheaper cheaper Japan cannot compete

I disagree with your logic that cheaper products will make economic miracle. Both Japan and China quadraple their GDP within 3 decades. However it is extremely doubtful that Myanmar will share the same category as high performing economies of Japan and China. Myanmar is still backward like Africa. that nation lack the productive and highly skilled workorce. There are some ethinic unrest for instabilty.

China growth was driven by oversea Chinese disposa investment and marketing prowess. Japan post war growth was driven by privillage access to US technology and market. Unlike them Myanmar has no oversea back up and special trading nation status of US. US consumption is also not strong like post WWII too. Without the huge market and oversea network, it is very hard to Myanmar to achieve the success stories of Asian Tigers.

Germany manufatctured high quality and more expensive products for world wide market. It is still a market leader for car, construction hardware and machine tools. Cheaper does not mean it will conquer the market. High quality engineering, competitivenes and innovation will conquer it.

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PERIL!

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I tend to agree with Zenpun, You really need to have an ultimate faith in this govt to believe that just an artificial manipulation of the yen value or printing more money is going to solve your problem. The fundamental issue in Japan is that almost all market has been locked down for years, the only product they can sell are niche product for domestic (except cars probably), Japanese companies are not used to see competitive products sold in their domestic markets. They have to develop and sell product that 1) interest worldwide consumers because nowadays the market is worldwide and 2) useful and with high quality to justify the price. Who wants to buy a Japanese smartphone nowadays ? Maybe only Japanese in Japan and maybe only because carriers are pushing local makers vs others (the same goes for other electronics). Yes Japanese used to lead in prototype design , showing that amazing flexible oled screen at that special show, demonstrating an incredible e-reader color technology at that other show but then... what ? Years passed and nothing, no consumer product, Samsung then arrived and start to release high end consumer product and not necessary cheap, stop think small, people are ready to pay for quality product as long as they are really good. Go and try to buy an e-ink color 14 inches e-reader in Japan, you 'll find no maker, personally I bought one from the USA . It looks like Japan already accepted the defeat in the technology war. When Japan will be back as a leader and no longer seen as a follower then situation will change.

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Abe and his Vice PM and lackey former PM/ and current finance minister Aso are using pork-barrel politics to try to revive the economy. Didn't work then, wont work now.

No one wants to be the PM in charge when the house of cards comes tumbling down, and as long as the Japanese people keep propping up the government nothing is going to change.

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The short-lived illusion of growth will morph into a long-suffered economic death spiral.

Mises was right a hundred years ago, and is still right.

http://mises.org/daily/6445/Japans-Easy-Money-Tsunami

Abe and pals are destroying the economy.

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'Japan post war growth was driven by privillage access to US technology and market. Unlike them Myanmar has no oversea back up and special trading nation status of US. US consumption is also not strong like post WWII too. Without the huge market and oversea network, it is very hard to Myanmar to achieve the success stories of Asian Tigers.' Oh absolutely you said it yourself at that time America needed Japan as they could produce for them - now aa japan has become prosperous also expensive they don't need to help anymore and can get cheaper in many places. You pick myanmar for your critisism but it could be many places Vietnam, Thailand, already China I guess as so many people and sl very cheap - not so different from japan but with more land and can produce anything Japan can at 1/10 th of the price. 100th of the price maybe and China has the drive to take over the world that Japan lost. Economic miracle is just a coin of phrase - happened because the Americans were here and made use of that connection. And of course my statements are a simplification of events. Cheaper products didn't make the economic miracle the Americans using the country to make the cheaper products made the economy. They haven't needed Japan since China opened its doors - it's cheaper, even the japanese make a lot of their stuff there now also, so the trade balance swings away and walla their is your deficit of course....

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