But let\u2019s spend a moment thinking this through. In a perfectly rational world, what should Japan\u2019s large number of middle-aged citizens be doing right now? Presumably saving for their old ages. Saving means cutting back on current expenditures and dragging prices downward. It also means accumulating financial assets that be cashed in during the decades to come. <\/p>\n
All of this is exactly what is happening. And it\u2019s entirely sensible.
True, most of the financial assets that ordinary Japanese are accumulating tend to be government bonds, but it\u2019s hard to see how this practice could lead to a crisis in the nation\u2019s finances. Since most of its massive debt is held by its own citizens, Tokyo can always impose a levy, directly through taxes or indirectly through inflation, to pay the debt it has run up.<\/p>\n
From the perspective of an average Japanese citizen, the real test is whether Tokyo is spending its money wisely to create a more productive economy that can afford to sustain a rising percentage of elderly citizens. On that score, Japan looks better than the prognosticators would have you believe. Its economy is ferociously competitive\u2014in fact, it has a sizable trade surplus, unlike the United States or the United Kingdon. Japanese GDP is growing (albeit slowly) and the unemployment rate is about half the level in the United States or Europe. <\/p>\n
The Japanese model has its weaknesses. For one thing, its internal economy is more about creating jobs than doing things efficiently. (Mind you, the inefficiency creates jobs and is one reason for the country\u2019s low unemployment rate.) But it\u2019s difficult to see how any of this leads to economic disaster. In fact, as more Japanese retire and the national economic emphasis shifts from creating jobs to creating profits, investors in Japanese companies could receive some very nice surprises.<\/p>\n
Freelance business journalist Ian McGugan<\/b> blogs for the Financial Post<\/i> <\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
Japan is imploding! Run! Just joking. For some reason, pontificators appear to have embarked on a Japan-bashing spree and it\u2019s always fun to join in with the mob. The thrust of recent opinion pieces on the Naked Capitalism and Money Game blogs is that Japan is facing disaster as a result of its aging population, […]<\/p>\n","protected":false},"author":4059,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-525905","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/525905","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4059"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=525905"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/525905\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=525905"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=525905"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=525905"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}