politics

PM says 'Abenomics' is only way to spur growth in Japan

61 Comments
By Jacques Lhuillery

The requested article has expired, and is no longer available. Any related articles, and user comments are shown below.

© 2013 AFP

©2019 GPlusMedia Inc.

61 Comments
Login to comment

All Fake Perceptions. It's a matter of time before media confirms Japan's drop to 4th position in world economy.

10 ( +10 / -0 )

The one-trick pony spouts more nonsense.

5 ( +7 / -2 )

Abenomics the "only" way? Gotta admit, the dude has serious delusions of grandeur along with an ego that knows no end.

It's a matter of time before media confirms Japan's drop to 4th position in world economy.

So? Really it should matter what place it is in the world if the economy is stable (not) the people satisfied (not) at peace with it's neighbors (not) among a host of other reasons too. Japan could be the 100th place in the world economy for all I care if it was stable and not in such a sad state of economic and political affairs.

China will soon surpass the US, does that make China a better country? Rankings mean nothing in reality. It's the quality of life that matters and being on top or close to it, just makes it harder when one falls.

5 ( +8 / -3 )

Yes, the gross domestic product don’t necessarily reflect public perceptions of quality of life. Most Japanese people have difficulty balancing work and family life due to a high percentage of people who work more than 50 hours a week and take little time for meals, sleep and leisure. Japan ranks lower than some of the third world countries in satisfaction with life.

9 ( +10 / -1 )

I simply CANNOT believe this guy, nor the IMF believe this nonsense.

There are plenty of easily accessible explanations as to exactly WHY purposely devaluing your own currency will end in disaster.

Not only that, but it's NEVER worked before to spur long term, REAL economic growth.

I can understand Abe lying through his teeth about this, as he's a politician and he wants to stay in office as long as possible, long term damage to the economy be damned.

But why is the IMF pretending to buy into this? What do they stand to gain by the self-destruction of the Japanese economy?

5 ( +6 / -1 )

Cut half of the civil servant jobs and cut salaries for the other half, problem solved.

3 ( +5 / -2 )

Prime Minister Shinzo Abe said Thursday his policies were “the only way”

Without having to resort to economic restructuring, so that Japan is not an export reliant economy

Without having to resort to financial reforms, so that Japan's wealth is more evenly distributed among the generations and government infrastructure spending is limited by taxes collected.

Without having to resort to social restructuring/reforms, so that the Japanese become more consumers and less manufacturers.

Without having to resort to demographic reforms, so that the shrinking population is compensated with an influx of young immigrants.

Without political reforms of the electoral system, so that the electorate elect a strong government and not a government that represents the divergent and mutually exclusive interests of all sectors of Japanese society.

Without agricultural reforms.... where to begin?

And even then, Abenomics is never going to.

-1 ( +3 / -4 )

“The Japanese economy has been stagnant and has suffered from deflation over the last 15 years,” the premier said.

I'm certainly no economist but I am beginning to wonder if stagnation is really the norm and the boom years the abberation. The boom years of the 80's and early 90's really more the result of America's booming economy and infatuation with Japanese electronics coupled wtih a cheap yen than anything Tokyo did.

5 ( +5 / -0 )

Japan's population is shrinking, so no surprise that its aggregate output (GDP) is shrinking. That's not really a crisis. Especially when you consider that Japan's GDP per capita often outpaces that of Western countries.

0 ( +2 / -2 )

Prime Minister Shinzo Abe said Thursday his policies were “the only way”

That is exactly what I was afraid, that Japan had no other alternatives than "put a name"nomics and stick your head on the ground.

1 ( +2 / -1 )

JeffLeeJun. 07, 2013 - 10:02AM JST

That's not really a crisis. Especially when you consider that Japan's GDP per capita often outpaces that of Western countries.

It is a crises because it has been maintained on larges amounts of government debt, which is nearly at levels where that debt cannot be serviced on present government tax revenue.

Japan has been living well above it means, a bit like the UK in the 1970's and I lived through the Thatcher dark years. Britain's democratic tradition ensured that although society was very highly tested, the society and its traditions more or less survived.

Japan has no such democratic tradition, rather the opposite, and when all comes crashing down, the facade of a liberal democratic Japan will soon follow.

-4 ( +1 / -5 )

Well, better to fix the value of the properties first. For example, properties should never lose values. Property value deflation has much more impact in the economy.

-2 ( +0 / -2 )

Dollar down to higher levels of Y96........... The house of cards called Abenomics is falling much quicker than people predicted. Without a cheaper Yen, everything else about Abenomics, which let's be honest was the usual LDP policy of a stagnant domestic economy being sustained by exports sustained by a cheap Yen, is worthless.

Shirakawa was right and Kuroda has been shown to be wrong....... don't want to say I told you so, but I.....

1 ( +5 / -4 )

Abenomics has tanked already.

He is a nationalist not an economist, nothing more and nothing less.

Look for attention to switch to China and Korea bashing in the coming week.

1 ( +3 / -2 )

I'm certainly no economist but I am beginning to wonder if stagnation is really the norm and the boom years the abberation. The boom years of the 80's and early 90's really more the result of America's booming economy and infatuation with Japanese electronics coupled wtih a cheap yen than anything Tokyo did.

Actually, the REAL boom years are when there's no central bank, and it's long, steady, economic growth lasting decades. The last time that happened was between the American Revolution and the U.S. Civil War.

The "boom" of the 80's and 90's in both the U.S. and Japan was due to money printing. And truth be told, one of the ONLY REASONS Japan had a "boom" at all was because they were conned by the Federal Reserve, and the U.S. Treasury.

How? The U.S. government convinced Japan to buy U.S. Debt, in exchange for giving them favorable conditions to sell their products to U.S. folks.

Americans spent their dollars on Japanese products, and the Japanese in turn spent those dollars on U.S. Debt.

The FED and the U.S. govt did the same to China, with the same results. Americans buy Chinese products, China buys U.S. debt.

As it stands now, there's few people left to buy Japanese products. So all this money printing by Abe will amount to nothing but a destroyed economy, and significantly increased import prices.

Apple has already jacked up prices of their products in Japan by 15%.

It's all a big con, and when there's no more suckers, it will all fall down like a house of cards.

Of course, when it does collapse and everybody's as broke as a Somalian high school dropout, Abe and his ilk will be long gone.

2 ( +3 / -1 )

To print unlimited Yen is only way to spur growth; to pour contamintaed water to sea is only way to deal with Fuksima unclear disaster; to tie security with U.S. is only way to protect Japan; to hurt neighbours is only way to satisify youself. So many only ways, like a glass vase easy to be broken. Perhaps not to be selfish is the only way to save you, Japan!

3 ( +6 / -3 )

Interesting how the falling Nikkei draws out the doomsdayers and now the stronger yen adds to their cheers. If the yen weakened to ,say, 130 then the same doomsdayers would be screaming the massive dumping of JGBs , yen becoming toilet paper and the Government going broke .The correct "result" for a disaster heading Japan and what could be concluded as a failing of Abenomics is a combination of falling Japanese corporate earnings; an increase in long term JGBs to interest rates way above 2% (the ceiling for the last 10 years) and a severe weakening of yen/USD.

0 ( +2 / -2 )

Abenomics ought to be called by its proper name: monitory manipulation. There are deep structure problems in the way the Japanese system works. There are vested interests in keep the status quo, however. Monitory manipulation is not even pump priming (recall the New Deal) but simply smoke and mirrors. As I write the Yen has hit the 97 to the dollar mark. The Euro is now ¥128 or so. With Abe's monitory manipulation we will probably see the rate seesaw. But you simply cannot rely on monitory manipulation forever.

0 ( +2 / -2 )

They should make a new game show based on Abenomics. They can call it, Fail Of The Century'. His policies are flawed simply because they are based on a workforce and international market that no longer exists. His plan is for every worker in Japan will end up paying around 20% more in taxes and fees to support Abenomics while companies will increase profits and receive tax cuts. However, therein lays the flaw. Increased taxes for workers will mean even less disposable income, thus effecting the profits of every company through lack of sales. There are no 'pluses' in this equation. It's all 'minuses'. Then, look at the failing relationships with Japan's largest trading partners throughout Asia. They have nearly destroyed their trade relations with China, which is their largest trading partner. Now, they are looking at Africa? There is no money in Africa! Fail Of The Century!

-1 ( +4 / -5 )

I predict within a few months 'Abenomics' will become a word people here shy away from instead of being proud of. The US dollar has already dropped back down to 96 yen, people are losing jobs left, right, and center, imports are extremely expensive, etc. The only benefits we're seeing are more foreign travellers and slightly cheaper living costs for people who come to work from overseas. None of that latter will last.

"Abenomics" will, in the future, be a model of what NOT to do.

2 ( +5 / -3 )

Of course he's going to claim its the best idea since sliced bread. He's hardly going to throw his feet up on the desk, slouch in his chair and exclaim "Nope..rubbish..total clap. I made it up while taking a dump. I have no idea what I'm doing..but dont tell anybody!" now is he. Politicians..just overindulged managerial staff.

0 ( +0 / -0 )

Wow, so many economic geniuses posting comments. "The US dollar has already dropped back down to 96 yen". Hmmm. The dollar was 76 yen a few short months ago. I'm trying to fathom the odd perspective that 96 is a "drop". Yes, the dollar spiked to 100 yen a few days ago, and as all currency do, it is fluctuating within a trading band, but to refer to the current 96-97 price as a "drop" relative to the last couple of years is incredible.

-1 ( +5 / -6 )

@Dog

that debt cannot be serviced on present government tax revenue.

Japan doesn't need to rely on tax revenues to service its debt. With a fiat currency and with the debt denominated in that currency, all Japan/BOJ needs to do is electronically credit the accounts of the creditor financial institutions, which are nearly all Japanese. Many are in the public sector, anyway, like the pension fund. So the govt pays itself off... with electronic blips!

In other words, Japan govt/BOJ will always have yen to pay down its yen-denominated debt because it has the monopoly to create that yen.

It's a mind-bender, but ever since Nixon took the US off the gold standard, that's been the reality behind modern monetary policy.

2 ( +4 / -2 )

@ thywillbedone.......Maybe a drop in expectations?

1 ( +1 / -0 )

thywillbedone: "I'm trying to fathom the odd perspective that 96 is a "drop". Yes, the dollar spiked to 100 yen a few days ago, and as all currency do, it is fluctuating within a trading band, but to refer to the current 96-97 price as a "drop" relative to the last couple of years is incredible."

So you admit that even a few months ago the dollar was at a mere 76 yen or so, and that it increased exponentially when Abe and Co. intentionally devalued the yen (and let's not kid ourselves, despite the objections they did it solely to try and increase exports and even the exchange rate), but you don't think that compared the sky-rocket in a mere couple of months the extreme drop in a few days is not worth noting? Sorry, but 102 yen to 96 is a BIG drop to occur in less than a week. Point is, it's going to drop further. Abe is trying to use an old model to stimulate an economy, but forgets that old model led to the burst.

StormR: "but we still get the same old bangers who refuse to see any light and want to drag others into their darkness."

Yeah, for big companies Abenomics has been a boon, although a lot of people are starting to sell their stocks since peak has been reached. For middle-class earners and especially lower-class it's been nothing but bad; jobs lost in heaps, the potential for many more with deregulation being astounding, failure to live up to his promise to increase personal income (save for the rich, which he delivered), import businesses suffering if not failing, etc. You can't look at a coin and not realize it has two sides.

"If abenomics fails it'll be as much to do with the economy as it will be to do with the negative people he is trying to get it to work for."

So you're going to blame JT posters you don't agree with for a failure not working? Rubbish.

"Half of you have no idea about the subjects you comment on anyway"

I think that about sums up your credibility.

-1 ( +4 / -5 )

Mr. SmithinJapan san, are you still maintaining the dollar "dropped" vis a vis the yen? Not sure how to interpret the verbose economics lesson. You say confidently: " Point is, it's going to drop further". Well, well, your clairvoyance is a rare gift indeed, and the gods have denied it to the rest of us! Since you can divine the movement of foreign currency, I'm assuming you have shorted the dollar with both fists, and will make a fortune in FX. Put your gift to good use.

-3 ( +0 / -3 )

Abenomics has worked for the last 6 months and will continue to work for some time yet, soon as they refill those ink cartridges it will all be back on track.

1 ( +2 / -1 )

In other words, Japan govt/BOJ will always have yen to pay down its yen-denominated debt because it has the monopoly to create that yen.

So then there's no need for taxes, right?

Since everything is Yen, the J-government can just print all they need, right?

0 ( +0 / -0 )

@sfjp330

Well said...If I had to take any economic statistic, I would take per capita GDP adjusted for PPP (Purchasing Power Parity), but even this doesn't tell many things.

0 ( +0 / -0 )

Japan has been mired in deflation and an economy plagued by a low velocity of money for over a decade. The Lehman collapse of 2008 exacerbated this by causing global mayhem of stock markets, including the Nikkei225 which collapsed from 18000 to 7000 in 12 months, destroying massive Japanese wealth. A rush to the safe haven status of the yen and the subsequent (necessary) money printing by the US Fed created a shift in yen from 124 to 76 yen (USD money supply versus the yen increased by approximately 2 to 1). The BOJ has now begun to increase the money supply which will naturally decrease the value of the yen. The Abe Government is endeavouring to increase the velocity of money and the eventual move out of deflation by improving conditions for investment, spending and induce increases in salaries/bonuses.

Abenomics is a three pronged proactive attempt to jump start the Japanese economy into one which grows with demand-pull inflation. The Government is still virtually in a planning phase, it takes years before specific decisions by the Government and subsequent corporate activities to take real effect through the economy even though there have been positive side-effects from the Nikkei rising, the weaker yen and the simple appeasement for the need for change. Give the Government a chance, the match is only in its first innings.

Early to judge, the need for criticism.

0 ( +2 / -2 )

randommanJun. 07, 2013 - 06:19PM JST

Japan has been mired in deflation and an economy plagued by a low velocity of money for over a decade. The Lehman collapse of 2008 exacerbated this by causing global mayhem of stock markets, including the Nikkei225 which collapsed from 18000 to 7000 in 12 months, destroying massive Japanese wealth. A rush to the safe haven status of the yen and the subsequent (necessary) money printing by the US Fed created a shift in yen from 124 to 76 yen (USD money supply versus the yen increased by approximately 2 to 1). The BOJ has now begun to increase the money supply which will naturally decrease the value of the yen. The Abe Government is endeavouring to increase the velocity of money and the eventual move out of deflation by improving conditions for investment, spending and induce increases in salaries/bonuses.

Abenomics is a three pronged proactive attempt to jump start the Japanese economy into one which grows with demand-pull inflation. The Government is still virtually in a planning phase, it takes years before specific decisions by the Government and subsequent corporate activities to take real effect through the economy even though there have been positive side-effects from the Nikkei rising, the weaker yen and the simple appeasement for the need for change. Give the Government a chance, the match is only in its first innings.

Early to judge, the need for criticism.

Nice post and agree.

Money is filtering through the system as the banks try to get companies to borrow so they will invest and hire, but some think just speaking fixes things, its only been 6 months but it will take years.

-3 ( +0 / -3 )

gaijinfoJun. 07, 2013 - 06:06PM JST

So then there's no need for taxes, right?

Since everything is Yen, the J-government can just print all they need, right?

Exactly. You really have to wonder in what type of reality some posters on here live in.

You don't know where to begin to start to explain what debt entails and that the Japanese haven't just reinvented the wheel.

Debt is debt and somebody has to eventually pay. Either the borrower, through monies owed. Or the lender through the loss of monies borrowed.

-1 ( +2 / -3 )

Randomman: Nicely thought out and written. It's comical there are those commenting that today's yen trade at 96 / USD (from 100+) means the USD is collapsing against the yen, and is evidence that nothing was accomplished.

1 ( +2 / -1 )

randommanJun. 07, 2013 - 06:19PM JST

Abenomics is a three pronged proactive attempt to jump start the Japanese economy into one which grows with demand-pull inflation.

I assume you are in Japan and you understand Japanese?

If you heard Abe's speech the other day on the third prong - buying cough medicine over the net was going to cure all Japanese ills! - you'd know the guy is shooting blanks.

As for 'demand-pull inflation', well you need the demand to be there in the first place, which it isn't. I and 99.9% of Japanese have all the aircons and flat TVs that we need for our 1 LDK family suites.

1 ( +3 / -2 )

thywillbedone: "Well, well, your clairvoyance is a rare gift indeed, and the gods have denied it to the rest of us! Since you can divine the movement of foreign currency, I'm assuming you have shorted the dollar with both fists, and will make a fortune in FX. Put your gift to good use."

Your failed attempt at condescension aside, I would like to point out that many, many people are now selling stocks because they know the market under Abenomics has passed its peak. Made them HUGE amounts of cash, and now it's back to the way it was before -- oh, plus trillions of yen more in terms of national debt which the grandkids here will be enslaved by.

" It's comical there are those commenting that today's yen trade at 96 / USD (from 100+) means the USD is collapsing against the yen, and is evidence that nothing was accomplished."

More comical still is that you cannot really comment on the post, but just post knee-jerk reactions to other posters. Tell us, since you are an economic expert, how things are going to turn out. Here's what's going to happen: Abenomics will fail. People like you will blame it on everything under the sun save but the actual reason -- it's an attempt to make the economy grow based on a system that made it bust before. You're then going to blame everything else under the sun again, and the next PM in the revolving door will say Abe's policies were 'regrettable' and that the current government doesn't share the same thoughts, etc., etc. It's easier than baby formula.

In any case, I truly feel sorry for the Japanese people, and I am getting out of dodge. The latter is not the reason why I feel sorry, but in the future Japan will have no pension despite paying an increased percentage, crappy healthcare despite paying 40 percent (it will in crease), no pension (as said), and an increase in consumption, residence, and income taxes. This place is going to bankrupt itself within a decade.

-2 ( +1 / -3 )

I think I made the comment that Abe's speech was lacklustre but I don't judge what the Government is trying to do on this one speech.

You create demand by increasing disposable income and improvement in future expectation (both income and price) which is the problem with deflation. You might already have a 26 inch flat screen but if your bonus goes up and the economy looks promising then you will want a 60 inch that your kid has been raving about.

0 ( +1 / -1 )

The general trend for the economy has been up wards and will continue to head that way for awhile yet, you think selling cough meds on the net is what Abe meant?

Seriously, small blips on the screen are going to occur that doesnt mean its over, give it some time to get things going.

They are not going to pour billions into something and then stand by and let it faulter, things havent even really started happening yet but already banks are scurrying around trying to distribute money as we speak, and there is all sorts of encouragement to companies to up salarys, bonuses and employment.

-2 ( +0 / -2 )

randommanJun. 07, 2013 - 07:16PM JST

You create demand by increasing disposable income and improvement in future expectation (both income and price) which is the problem with deflation. You might already have a 26 inch flat screen but if your bonus goes up and the economy looks promising then you will want a 60 inch that your kid has been raving about.

No you don't, you increase demand by increasing the quality of life, which in Japan has very little correlation to income, except at the very very top echelons of Japanese society, where income is so large that they can actually live a genuine middle class lifestyle.

Japan was and still is - although the still is an accident of 1960's economic policy that hasn't changed - about stifling domestic consumer appetites by limiting their time and space for consuming and maximising their production abilities by keeping them in the workplace as much as possible.

By appearance, with the rolex watch, wearing the Armani suit and driving the Prius, the average Japanese Joe might seem rich, but at the end of the day he still goes home to the 3rd World built 6 by 6 2LDK, which he shares with his family.

1 ( +4 / -3 )

randomman, that's all great, but 85% of Japanese companies are keeping salaries the same or reducing them. Add on tax increases and inflation, and there is less money and therefore more belt-tightening. That's why Abe's plans will fail, even if some export-driven companies will increase bonuses.

0 ( +1 / -1 )

StormRJun. 07, 2013 - 07:41PM JST

They are not going to pour billions into something and then stand by and let it faulter, things havent even really started happening yet but already banks are scurrying around trying to distribute money as we speak, and there is all sorts of encouragement to companies to up salarys, bonuses and employment.

Get real, will you?

They've been doing that since Hosegawa in 1991. The Japanese financial sector has been awash with money since Koizumi, when you could actually borrow money on a Friday and the BOJ would owe you money on your loan on the following Monday because of the negative interest rates.

Encouragement, outside of Keynes, is not an economic variable and even then Keynes said that an essential role of government was to mould the herd encouragement/discouragement through fiscal policy and legislation: both lacking in Abe's third pronged speech of yesterday.

1 ( +3 / -2 )

Saxon Salute

randomman, that's all great, but 85% of Japanese companies are keeping salaries the same or reducing them. Add on tax increases and inflation, and there is less money and therefore more belt-tightening. That's why Abe's plans will fail, even if some export-driven companies will increase bonuses.

Ok thats a good thing that 15% of companies will raise salaries then, much better than previous years, so then it seems this Abenomics is starting to work.

Some people seem to think Rome was built in a day.

-2 ( +0 / -2 )

I don't know why I am responding but while waiting for the non farm payrolls I'll indulge myself.

Dog: Quality of life is not a process but a goal. Increase in disposable income->increase in demand for luxury goods, increase in better education, more visits to the local pub, decrease in crime etc etc->higher quality of life.

Saxon: I don't know where you got the 85% from but a reduction of salary or simply keeping them the same is a result of deflation and a lack of demand in goods and services; the reason why all countries fear deflation the most. The Government is trying to combat this. This results in a low velocity of money Deflation is also why people hoard money into savings accounts. They don't have to pay interest because the value of money is going up.

1 ( +1 / -0 )

Still waiting for you smithinjapan to back your claim with facts about companys laying of heaps of workers too, why is it that the real figures show differently.

Dog this is not 1991 any longer in case you had forgotten, this government is atleast doing more and having a better go at getting this economy on track than any govt in the last 30 years and I am all for that.

If they continued to sit on their hands would that suit you better?

It is all going to take time and getting funds into the economy is starting to happen, companies are being encouraged to raise wages, invest in machinery and new technology which in turn will gradually filter through to some of the masses which in turn will lead to more pints being pulled at the local and people buying new prius' etc, all good.

Very often if people look for the good they can easily find it and vis versa, but some people just refuse to look.

You may not agree with what they are trying to do or how they are trying to do it, but ATLEAST they are having a GO.

Would rather they do something than nothing personally.

If they can get this country working and productive again they might be able to right this listing old boat, and I hope they can.

Japan is a great place and the japanese essentially are great people they deserve to succeed ( everything has faults I know) but over all there is nothing wrong that cant be righted with determination and time.

-1 ( +1 / -2 )

randommanJun. 07, 2013 - 08:13PM JST

Dog: Quality of life is not a process but a goal. Increase in disposable income->increase in demand for luxury goods, increase in better education, more visits to the local pub, decrease in crime etc etc->higher quality of life.

You either are not living Japan or in some other world bubble. The Japanese process of doubling incomes under Ikeda was never about the goal of doubling their consumption or the quality of their lives.

The overwhelming majority of Japanese in 1970 still lived in the same equivalent living space that they had lived in 1960.

The majority of Japanese shopping in a supermarket in 1970 were still confronted with the same domestically produced 'either or other' limited foodstuffs that they had been confronted with in 1960.

The Japanese, although their incomes had doubled in the 10 year period of 1960 to 1970, still worked the same number of hours that they had worked at the beginning of the decade.

Like I said, income and quality of life in Japan are very different variables. This is not the USA or America.

0 ( +2 / -2 )

I live in a house in the suburbs and love it , i have plenty of space, a yard, a car, a bike, a dog and lots of free time. I get out in the country side when i want to , i get out of the office when i choose to and eat what I want.

I would however like the economy to improve as my company relys on a strong US$ or a weak yen but other than that

Life is good.

I know this govt and this country's economy is in the toilet but so is europe and the US and lots of places are in bad shape, but atleast some one here is trying to do something about it, and they have a real chance to succeed if it all goes to plan.

It wont be easy but nothing worth having is ever easy.

0 ( +1 / -1 )

StormRJun. 07, 2013 - 09:01PM JST

I live in a house in the suburbs and love it , i have plenty of space, a yard, a car, a bike, a dog and lots of free time. I get out in the country side when i want to , i get out of the office when i choose to and eat what I want.

The important point is that you are not the majority of the Japanese. They live in little prefabricated boxes stacked up on each other. They only get out in the country 2 weeks a year, with the rest of the japanese nation at the same time and they don't get out of the office when they choose.

-1 ( +1 / -2 )

I suspect that in a few months Abeconomics will be called "Abakaconomics. One thing is certain and that is that the 1980s are not coming back and Japan has lost much of its economic cutting edge for good. It is in the nature of things. That said, Japan still leads in automobile, camera and watch manufacture and is way ahead in toilets (the US may have Apple but we have the wash toilet, and China, the world second largest economy, has toilets that defy easy description). What Abe is doing is making a mess of a system that is not as badly off as it could be.

-1 ( +0 / -1 )

@gaijininfo

"So then there's no need for taxes, right?"

Wrong. The role of taxes is to control the distribution of wealth, regulate domestic consumption and combat inflation. And yes, also to pay down the public debt. But Japan, unlike Greece and others, isn't forced to into that last option.

2 ( +2 / -0 )

JeffLeeJun. 07, 2013 - 09:58PM JST

And yes, also to pay down the public debt. But Japan, unlike Greece and others, isn't forced to into that last option.

Yep, Japan's uniqueness just reinvented the wheel.

-1 ( +1 / -2 )

Yep, Japan's uniqueness just reinvented the wheel.

Well, the US, Canada, and many other countries with their own fiat currency and no large debts to foreigners are in this happy position. That's why they don't need bailouts, never will.

The BOJ has now begun to increase the money supply which will naturally decrease the value of the yen.

Not really, They've doubled the monetary base, which isn't the same thing. The MB consists of bank reserves, which are really just numbers on the banks' balance sheets after the BOJ electronically credits their accounts. Those banks will issue money only if the money is demanded. Once that happens, then the MS will expand. But that may not happen, anyway.

(JeffLee: BA, economics, class of '86)

0 ( +0 / -0 )

smithinjapan sama, I'm flattered by your attention. Thank you. As for your highlighted statement: " I would like to point out that many, many people are now selling stocks because they know the market under Abenomics has passed its peak." Thank you for that enlightenment - we are wiser for it. By the way, I'm sure you know this already, but in the stock market, for every seller, there is a buyer; but of course we know the buyers are dead wrong, and doomed, right smith-san? (Well, all except for those lucky ones who bought the Nikkei a year ago, and are still up 50%).

Further you wrote: " Tell us, since you are an economic expert,..." WOW, thanks for that compliment. I'm blushing. (Flattery will get you everywhere). Actually, I am not an economics expert I confess, but thanks for thinking I am.

Finally, regarding your expression of sympathy for the people of Japan, and announcement of your own emigration (you wrote: "I truly feel sorry for the Japanese people, and I am getting out of dodge"), Thank you from the bottom of my heart, and best wishes to you, wherever you end up.

0 ( +1 / -1 )

JeffLeeJun. 07, 2013 - 10:15PM JST

Well, the US, Canada, and many other countries with their own fiat currency and no large debts to foreigners are in this happy position. That's why they don't need bailouts, never will.

Duhh, nearly every Western country, apart from our med cousins, have their debt in domestic markets. Correct me, if I'm wrong, but US debt is 70% domestically owned and UK is thereabouts. Yet, they all feel the need to reduce their national debt. They obviously didn't reinvent the wheel

(JeffLee: BA, economics, class of '86)

Canadian university, I suspect

0 ( +2 / -2 )

@Dog

Yet, they all feel the need to reduce their national debt.

The politicians do, but that's because they have law degrees, not economics degrees, and don't understand how the modern monetary system works. The way they frequently equate private debt to public debt (two very different things) is evidence of their ignorance.

Canadian university, I suspect

Maybe, but my degree has opened a door to my career in which I now get paid money to write and comment on economic and business trends. I should be charging you and all the others here for giving out all this valuable information. LOL.

0 ( +1 / -1 )

StormR: "Some people seem to think Rome was built in a day."

And yet people praise Abenomics, which was essentially 'built in a day'.

thywillbedone: "WOW, thanks for that compliment. I'm blushing. (Flattery will get you everywhere). Actually, I am not an economics expert I confess, but thanks for thinking I am."

I see you're still trying to be condascending instead of posting on the thread. Not one of your posts at all has been about the actual topic -- just hateful replies because you don't agree with certain posts. As for thanking me for announcing that I'll leave (and it won't be tomorrow, by the way), thank your government; it's one less tax payer, less money for the pension scandals, less consumerism, and the abscence of one more able-bodied person to pay for your retirement.

Abenomics is a joke people will be ashamed to talk about in the near future. Abe's goal as PM is to change the constitution and allow Japan to recreate the Imperial Army -- the economy is the momentary distraction he needs to get a few points to do the former. But hey, maybe thywillbedone and StormR and others can go onto the thread where the government is panicking to tell people the MAJOR drop in the yen is not something to be concerned about. Because we all know when the J-government tells you it is not a concern, or there is no harm, it usually means the opposite.

-4 ( +0 / -4 )

Man you are way off track, Abenomics wasn't and hasn't been built in a day, its still in its formative & planning stages and we are only just now, some of us starting to see results of it, it will take years and even by 2020 things will be tied to it.

Time to cut all this negativity and start looking for the good things.

0 ( +1 / -1 )

StormR: "Time to cut all this negativity and start looking for the good things."

Always good to be an optimist, I suppose, but I just don't see the good things coming unless you're already rich. Abenomics will only spur on certain elements of societal growth, and crush others. Abe's promise of an increase in pay to families has already failed once, etc. I hope you're right, but don't be surprised if you're not, and don't blame it on the negativity of posters.

-1 ( +1 / -2 )

Most of life is about Attitude, you can choose to only see the darkness or you can choose to look for the light, I like to turn to the sunshine and look for the good things.

If abenomics fails then so be it but atleast he had a go at trying to right this rickety old ship, as opposed to sitting on his hands like the previous bunch had done. Risk nothing and win nothing.

-2 ( +1 / -3 )

Dog, You seem to be describing above the partial state of the Japanese household during the 60s and 70s and using that as an example of your argument of the immutable state of Japanese low quality of life. In contrast, Japan went through a severe stock and property bubble during the 80s and 90s where greed escalated and demand for wealth and luxury surged. Although the result was far from desirable it still demonstrates excess disposable income driving demand. Japan is no different from any other country where if you feed them a ton of money with the expectation of future growth they will start buying luxurious goods and services including larger dwellings, more expensive cars and household items. Contrary to what many believe, an increase in wealthy household income helps the overall economy and trickles down to all levels of income households. Let me also preempt those who start raving about the possibility of hyperinflation; firstly Japan is mired in deflation and secondly look at those who were raving and ranting about the US going into hyperinflation after the Lehman collapse because of the Fed pumping money into the system....still waiting, in fact recent figures globally are showing disinflation.

1 ( +2 / -1 )

StormR: "If abenomics fails then so be it but atleast he had a go at trying to right this rickety old ship, as opposed to sitting on his hands like the previous bunch had done. Risk nothing and win nothing."

I agree, to an extent, with the 'risk nothing lost nothing' idea, but the problem is that the economy is not Abe's intent, and he has made that clear. His main goal as PM, which he has stated, is to revise the constitution and change history. The economy is an easy way to get points quick, and already it's starting to backfire. All I can say is sell your stocks quickly! as far as stocks go.

-1 ( +0 / -1 )

Show me where abes economic reforms have back fired or starting to back fire.

Also show me the data that supports all these people who have lost their jobs, I am still waiting for you to verify your vague claims.

Why would I sell my stocks ?

Abe quit because he was ill and not in a fit enough state to be PM , if you are hospitalised do you still expect to do your job ?

You are on your own and keep banging the same dull drum, the economy is improving, just because you cannot see it yet or refuse to does not mean it is not happening sheeesh !

0 ( +1 / -1 )

The last thing the common Japanese citizen needs is for their buying power to be even lessened while export driven corporations drive up profits. This is only going to exacerbate Japan's working poor problem.

-2 ( +0 / -2 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites