business

Bank lending hits four-year high

16 Comments
By Leika Kihara By Leika Kihara

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16 Comments
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Once an inflationary spiral starts, it's literally IMPOSSIBLE to stop. The only way to STOP inflation is to TIGHTEN, which will send interest rates through the roof.

I guess you missed the part where Japan has been in a slow-death deflationary spiral for years, and that inflation is a good thing.

4 ( +5 / -1 )

Nice to know things are finally turning around...hope this bubble doesn't pop though

3 ( +4 / -1 )

Yes, well the voices of doom rattling the bones on Abenomics telling us that it is the end of the world as we know it may bleat away but the numbers aren't lying at the moment.

2 ( +3 / -1 )

"Housing is not an investment in Japan, it's an expense. Houses are constructed to last only 10 years, so they depreciate. "

any reliable quotes/link for this?

"One out of every four houses, apartments, shops, businesses and factories will disappear in the next generation. "

and this?

"Most of the housing loans in the article are probably Daitokentaku loans to support their Ponzi-scheme. "

and this?

"Most are rented out after or even before construction is finished, but most people move out after the first two-year lease and they remain unrented. "

and this as well?

"But, I'm sure Abenomics and inflation will make everything better, huh?"

As for this one, do you think deflation make thing better? So, will you wait a slowly death that apparently will happens anyway OR give it a try for something new? if no one is willing to step forward, this world is full of boring craps.

2 ( +3 / -1 )

Bank lending hits four-year high

hope they dont't suffer bad-debt problem again.

1 ( +1 / -0 )

"Please explain why stuff being more expensive six months from now is a good thing."

Please explain why not only cost of living, but also SALARY IS LOWER than 10 years ago is a good thing?

with delfations=less profit for companies==less bonuses, less pay raise=less hirings=less this, less that... and why is it a good thing?

please ENLIGHTEN me, please.........

1 ( +2 / -1 )

The banks have been approaching Small and Medium sized business offering loans for atleast a couple of months now trying to stimulate things, obviously the money is filtering through now.

1 ( +1 / -0 )

Deflation is the sign of a sick economy, inflation is generally a sign that things are going in the right direction. This is common economic wisdom. Yes, things cost more. This is matched by wage increases, which will filter through in time. Sure, your canned coffee from the vending machine might cost you an extra 10 yen for a while, but eventually, the wage adjustment will account for that. An inflation spiral?! Ridiculous. Japanese interest rates are at....what, 0.25% right now? The Reserve Bank has lots of room to move on the cost of borrowing money to keep inflation in check, should it need to. Japan simply needs to unlock it's vast reserves of money sat in bank accounts that don't earn any kind of interest and are dead money to the economy. It needs to do this so that it can start to skim some of these reserves to pay for it's debt. And you have to pay your debts. Inflation, partly, encourages this. Embrace it folks, you'll be smiling in the long run.

1 ( +2 / -1 )

I would also like to see how much of this increase is from margin daytrading

0 ( +0 / -0 )

The reason there's no inflation is all the money they've been printing has just been sitting in the bank.

Most of this demand for loans is real-estate related. So they are not "printing" money. How many people do you know pay for their homes in cash? We're talking electronic debits and credits and numbers on balance sheets.

0 ( +0 / -0 )

Darnname

So, you have any suggestions, or just criticisms of everything?

0 ( +0 / -0 )

inflation is a good thing.

Please explain why stuff being more expensive six months from now is a good thing.

-1 ( +1 / -2 )

I think its more anecdotal about the housing ownership issue, but how many people live in 60 year old homes? they're more likely to tear down the existing structure and build new - don't be one of those posters who demand to see proof everytime a user makes a point that is contrary to your thoughts. we're not economists here

as for inflation.. if there are wage increases to match the increasing prices, then inflation is nullified and we're no better off than we were 5 years ago... while managed inflation is a sign of a healthy growing economy too much obviously is not.. but explain that to households who've seen fuel prices increase along with other items while perhaps not enjoying wage increases to match.

-1 ( +0 / -1 )

My money buys less and less these days, should I consider this as a good news, I used to be middle class, I am not anymore, but Toyota, Honda, .... rich guys are getting richer!!!

-3 ( +1 / -4 )

That's nonsense, Tamarama. You apparently know nothing about the Japanese economy. Wat you're spouting is for economies where land and houses appreciate and housing is considered an investment and inflation is a friend the homeowner.

Housing is not an investment in Japan, it's an expense. Houses are constructed to last only 10 years, so they depreciate. Inflation cannot help an economy where 1/4 of the population will disappear in the next generation, and most of the remaining population will be elderly.

One out of every four houses, apartments, shops, businesses and factories will disappear in the next generation. Tell me how in the hell inflation will improve that situation? Sheesh.

Most of the housing loans in the article are probably Daitokentaku loans to support their Ponzi-scheme. Since all Ponzi schemes always collapse, 100% of the time, this one will too.

Just in case you don't know - they get land owners to build mansions and apartments, promising they'll pay 100% of the rental/occupancy monthly, even if none are rented.

Most are rented out after or even before construction is finished, but most people move out after the first two-year lease and they remain unrented. The fudousan part of their business is crap, and people hate renting from them after one time. They're schemers and con men who never fulfill the lease requirements and soak the tenants with monthly fees for cleaning and support that never happens.

That's why you see them building massively everywhere. They need as many construction projects as possible to get the markup from the construction to pay off the rents to the previous owners who signed up to build mansions and apartments.

It will not end well.

But, I'm sure Abenomics and inflation will make everything better, huh?

-3 ( +2 / -5 )

This is NOT good news. The reason there's no inflation is all the money they've been printing has just been sitting in the bank. Once people start borrowing it, and spending it, the potential for inflation to come unhinged becomes very real.

Couple this news with the news that yesterdays's story showed how some 80% of households expect prices to INCREASE, this DOES NOT bode well for the economy.

Once an inflationary spiral starts, it's literally IMPOSSIBLE to stop. The only way to STOP inflation is to TIGHTEN, which will send interest rates through the roof.

A good metaphor would be a huge pile of dry brush, sitting next to a large tanker of gasoline. The government has been trying to start a fire for a long, long time, (two decades).

Once the money flows out of the banks, and people start spending money simply because they're afraid prices are going to go up, BOOM!

The fire starts, AND the drum tips over onto the burning brush, setting the whole country ablaze.

This is what Ludwig Von Mises described decades ago as a "crack up boom"

This is what sent the German mark from a 10:1 ratio to the dollar to 1,000,000,000,000:1 (not a typo) within THREE YEARS between WWI and WWII. And it was a primary CAUSE for WWII.

Japan has literally painted herself into a corner, and there is no way out.

This will NOT end well.

-4 ( +2 / -6 )

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