'The Sick Man of Asia' was how the Japanese looked down
on China. Today, Japan is fast becoming the 'Sick Man of Asia'. Karma
works in mysterious ways indeed.
Thirty long years of stagnation
after the asset bubble burst of 1992, Japan never managed to recover.
There were frequent bouts of stimulation that resulted in Japan having
the biggest debt to GDP ratio in the world. Those stimulations did not
help.
There was the much-touted adoption of Abenomics with much
talked about arrows to stimulate the economy, that also failed
miserably. We now have Kishidanomics where the Japanese Government tried
to move away from their zero-interest rate environment, which resulted
in even more problems with the Yen sinking even further down the sewers.
The stupid Japs still tried to play the hero by rising to become the
top holders of US Treasuries. Japan is suffering just like the Germans
being taken to the cleaners by the USA by trying to follow their
dictates.
Today, Japan is facing even greater problems with its
economy apart from the sinking Yen ha. Economic sectors that they had
dominated over the decades had earlier been cannibalised by South Korean
and now by Chinese manufacturers.
Consumer electronics which
Japan was the kingpin after having destroyed USA and Western
manufacturers was to be in turn decimated by South Korean
manufacturers, which in turn is falling into the hands of the Chinese.
Japanese cars that were to dominate Global Vehicle sales years ago has
also been falling to Chinese carmakers.
Japan is in a desperate situation. And a desperate Japan is a dangerous animal if we look back towards the two World Wars.
Anonymous
1 comment:
What is Japan going to do with a plunging Yen? The USA, the main culprit of Japan's economic and evolving problems is not going to help by reducing interest rates. Japan can forget about it as the USA is facing real problems itself, with another bank failure, the first this year, vis a vis Republic Bank Bancorp.
According to reports, Japanese have been living with negative 'real wage' increases for years. Japan just recently announced a big wage increase for workers, but it failed to make the Japanese go out to spend to stimulate the economy. This is probably a trait of Asians like the Chinese as well. The falling Yen is forcing Japanese to save even more, knowing the global economic problems and the geopolitical shift coming.
More wage increases are going to make Japanese products even less competitive globally despite the falling Yen, not to talk about their competing in the Chinese market, which is Japan's second biggest export market after the USA. A falling yen may help Japan, but that is still way beyond competing with products made by Chinese companies and selling in China. So, what is going to happen to Japanese cars, possibly the only Japanese export of great relevance.
If the falling Yen is a blessing in disguise for Japan, why is Kishida talking about action needed to stabilize the Yen falling further? There are obviously serious consequences befalling Japan going forward. First and foremost is the effect on its citizen's cost of living with the falling Yen. Of course, do not expect Japanese citizens to protest or mount a revolution against that, just as in Red Dot. The Japanese will just bear with it and just tolerate Japan becoming the 'Sick Man of Asia'. Does that ring a bell?
sick man of Asia'.
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