6 ms·

I still don't understand how a country with a fast aging population and alienation of it's youth (herbivore men) has the allegedly most reliable bonds to pay in

by alecco 9y ago

I still don't understand how a country with a fast aging population and alienation of it's youth (herbivore men) has the allegedly most reliable bonds to pay in the distant future. Do investors see something else? Are they factoring robots or something?

avs733 9y ago
Your assuming that markets are logical. We now have a solid understanding that human decision making is rarely logical and only barely rational, what makes anyone actually think (rather than believe/assume) that firms really don't act in the same way?
- ddorian43 9y ago
  It is assumed when you have more $$$ you are more logical I think.
  - avs733 9y ago
    I mean thats the literal critique of the scientific paradigm that frames the vast majority of management and strategy discourse...the conflation of success with being logical.
  - __jal 9y ago
    Assumed by whom? I'm guessing irrational people.
adventured 9y ago
They've been buying their own debt with their central bank, aggressively debasing their standard of living to try to relieve the extreme debt pressure & interest that has been consuming nearly half their tax revenue. The central bank buys up the government's outstanding debt at zero interest, removing external holdings of debt, while punishing the Yen and anyone holding Yen assets in the process. For the government it becomes a low cost approach to cancelling out debt. For the people of Japan, it becomes a stealth inflation attack on their standard of living. The choices are slim though, they already have high taxes, and the national savings rate has dropped from high to nearly zero (formerly the people of Japan funded the big debt binge with the high savings rate). It's the next level up from what the Fed was doing with QE. The Fed - supposedly - will sell a lot of its assets back into the market. The central bank of Japan plans to just buy up its own debt and cancel it perpetually. The Bank of Japan owns something like 43% of the Japanese Government's debt at this point. You can almost guarantee the US Government & Fed will do the same thing in the next ~15 years, as US public debt hits $30+ trillion. If the US wanted to push its debt interest costs toward zero over time, it could have the Fed start buying up all the public debt. The cost would be debasement of the USD (the dollar would fall, commodities would soar, the US standard of living would fall, real inflation would spike). If you want a functioning market for your debt, you have to pay investor's rate of desired interest. You can massage that to some degree, which the Fed does, to try to keep interest costs under control. In Japan's case, they've gone full QE, entirely dropping the pretense of a market for their debt.
- spaceflunky 9y ago
  Just out of curiosity, what does that mean for Japan's real estate market? Does that policy cause RE prices to fall or rise?
  - adventured 9y ago
    It'll tend to net make everything more expensive in Japan over time, for the people of Japan. That's because, particularly in their case as an island, they have to import a lot of materials. If you debase your currency to relieve your debt, then your imports go up in cost, then all construction & repair will tend to cost more in Yen terms (to the extent you have to import, eg commodities). The overall consequence of their debt relief policies, are causing a significant increase in poverty. I must have read five dozen articles over the last five or six years, covering that, eg: [2015] "Last year, the Japanese government recorded relative poverty rates of 16%—defined as the share of the population living on less than half the national median income. That is the highest on record. Poverty levels have been growing at a rate of 1.3% a year since the mid-1980s." https://www.economist.com/news/asia/21647676-poverty-worsens-more-japanese-work-non-permanent-contracts-struggling https://www.economist.com/news/asia/21647676-poverty-worsens... Japan has seen a persistent squeeze on their standard of living. Incomes have been stagnant for decades, savings rates have dropped toward zero as people are squeezed on cost of living, and costs have not fallen to offset that. Economists like to pretend that Japan has been suffering under horrific deflation for decades. That's almost entirely a lie however. They've both been hit by significant Yen devaluation, which is a form of inflation, and seen relatively little actual deflation in terms of the price of goods going down. It's why Tokyo is still one of the most expensive cities on earth, despite Japan's GDP per capita not keeping pace with other wealthy nations. To the extent you're wholly supplying your own commodities & goods domestically, you can restrain some of the devaluation effect on prices, in regards to making everything more expensive (including real-estate). Inevitably though, even in the best of cases, you end up with cost leakage that impacts your economy. In Japan's case, they're very dependent on imports, so the effect is strong. In dollar terms, their policies make everything in Japan cheaper. It makes their imports more expensive and it makes their exports generally cheaper. As Japan began this approach, they were occasionally warned about overly aggressive currency devaluation, in terms of getting labeled for it. If you're a person in Japan, living on the Yen, it doesn't help you at all, other than the very long-term prospect of finally getting out from under the crushing national debt burden. It helps exports some, which can bolster export companies there and the employment picture for anyone working in exports, but the gains are mostly wiped out by the drop in currency value over time. As a USD or Euro holder, I get to buy your Yen products for cheaper, in other words, so you gain zero real ground. They desperately need to devalue the Yen however, as they currently can't afford to upkeep the vast infrastructure they put into place over a few decades of their big public works programs. So they have to get out from under their debt interest squeeze to free up budget spending for other things that need attention.
wz1000 9y ago
> “The problem is that 30 years from now there will be a lot more retired people and proportionately fewer workers (that part’s right), and the Social Security trust fund will run out of money (as if number in a trust fund is an actual constraint on govt’s ability to spend ...silly, but they believe it), so to solve the problem we need to figure out a way to be able to provide seniors with enough money to pay for the goods and services they will need.” > With that last statement it all goes bad. They assume that the real problem of fewer workers and more retirees, which is also known as the dependency ratio, can be ‘solved’ by making sure the retirees have sufficient funds to buy what they need. Let’s look at it this way. 50 years from now when there is one person left working and 300 million retired people (I exaggerate to make the point), that guy is going to pretty busy since he’ll have to grow all the food, build and maintain all the buildings, do the laundry, take care of all medical needs, produce the TV shows, etc. etc . etc. So what we need to do is make sure those 300 million retired people have the funds to pay him??? I don’t think so! This problem obviously isn’t about money. What we need to do is make sure that one guy working is smart enough and productive enough and has enough capital goods and software to be able to get all that done, or those retirees are in serious trouble , no matter how much money they might have. > So the real problem is, if the remaining workers aren’t sufficiently productive there will be a general shortage of goods and services and more ‘money to spend’ will only drive up prices, and not somehow create more goods and services. The mainstream story deteriorates further as it continues: “Therefore, government needs to cut spending or increase taxes today, to accumulate the funds for tomorrow’s expenditures.” By now I trust you know this is ridiculous, and evidence of the deadly innocent frauds hard at work to undermine our well being and the next generation’s standard of living as well. Our government neither has or doesn’t have dollars. It spends by changing numbers up in our bank accounts, and taxes by changing numbers down in our bank accounts. And raising taxes serves to lower our spending power. That’s ok if spending is too high causing the economy to ‘overheat’ as we have too much spending power for what’s for sale in that big department store called the economy. But if that’s not the case, and, in fact, spending is falling far short of what’s needed to buy what’s offered for sale at full employment levels of output, raising taxes and taking away our spending power only makes things that much worse. > And the story gets even worse. Any mainstream economist will agree that there pretty much isn’t anything in the way of real goods we can produce today that will be useful 50 years from now. They go on to say that the only thing we can do for our descendents that far into the future is to do our best to make sure that they have the knowledge and technology to help them meet their future demands. > So the final irony is that in order to somehow ‘save’ public funds for the future, what we do is cut back on expenditures today, which does nothing but set our economy back and cause the growth of output and employment to decline. And, for the final ‘worse yet,’ the great irony is that the first thing they cut back on is education - the one thing the mainstream agrees should be done that actually helps our children 50 years down the road. Warren Mosler, Seven Deadly Frauds of Economic Policy http://www.heterodoxnews.com/htnf/htn93/Seven_Deadly_Rev12_Dec%2019%20ABBREVIATED.pdf http://www.heterodoxnews.com/htnf/htn93/Seven_Deadly_Rev12_D...
TheSpiceIsLife 9y ago
Herbivore men - I had to look it up: Herbivore men or grass-eater men (草食(系)男子 Sōshoku(-kei) danshi) is a term used in Japan to describe men who have no interest in getting married or finding a girlfriend. The term herbivore men was also a term that is described as young men who had lost their "manliness". The term was coined by the author Maki Fukasawa in an article published on 13 October 2006. Surveys of single Japanese men conducted in 2010 found that 61% of men in their 20s and 70% of men in their 30s considered themselves to be herbivores. Japan's government views the phenomenon as one possible cause of the nation's declining birth rate. According to Fukasawa, herbivore men are "not without romantic relationships, but have a non-assertive, indifferent attitude toward desires of flesh". The philosopher Masahiro Morioka defines herbivore men as "kind and gentle men who, without being bound by manliness, do not pursue romantic relationships voraciously and have no aptitude for being hurt or hurting others." https://en.m.wikipedia.org/wiki/Herbivore_men https://en.m.wikipedia.org/wiki/Herbivore_men
- philwelch 9y ago
  > According to Fukasawa, herbivore men are "not without romantic relationships, but have a non-assertive, indifferent attitude toward desires of flesh". The philosopher Masahiro Morioka defines herbivore men as "kind and gentle men who, without being bound by manliness, do not pursue romantic relationships voraciously and have no aptitude for being hurt or hurting others." I know I have a tendency to try and view everything through the lens of WWII, but this really sounds like after the war, the US somehow neutered the entire Japanese culture a little too thoroughly.
  - TheSpiceIsLife 9y ago
    The Wikipedia entry goes on to say: Masahiro Morioka argues that Japanese herbivore men are a result of Japan's post-war peace. Since the end of World War II, Japan has not directly participated in any war or conflict, either within its own borders or outside of them. Prior to this time of peace, many Japanese felt that becoming a soldier was the only approach to becoming manly. This social norm has slowly disappeared during the following period of post-war peace. Due to this, Japanese men are less aggressive and this could bleed over into their romantic lives.

by alecco 9y ago

avs733 9y ago

Your assuming that markets are logical. We now have a solid understanding that human decision making is rarely logical and only barely rational, what makes anyone actually think (rather than believe/assume) that firms really don't act in the same way?

ddorian43 9y ago
It is assumed when you have more $$$ you are more logical I think.
- avs733 9y ago
  I mean thats the literal critique of the scientific paradigm that frames the vast majority of management and strategy discourse...the conflation of success with being logical.
- __jal 9y ago
  Assumed by whom? I'm guessing irrational people.

adventured 9y ago

They've been buying their own debt with their central bank, aggressively debasing their standard of living to try to relieve the extreme debt pressure & interest that has been consuming nearly half their tax revenue. The central bank buys up the government's outstanding debt at zero interest, removing external holdings of debt, while punishing the Yen and anyone holding Yen assets in the process. For the government it becomes a low cost approach to cancelling out debt. For the people of Japan, it becomes a stealth inflation attack on their standard of living. The choices are slim though, they already have high taxes, and the national savings rate has dropped from high to nearly zero (formerly the people of Japan funded the big debt binge with the high savings rate). It's the next level up from what the Fed was doing with QE. The Fed - supposedly - will sell a lot of its assets back into the market. The central bank of Japan plans to just buy up its own debt and cancel it perpetually. The Bank of Japan owns something like 43% of the Japanese Government's debt at this point. You can almost guarantee the US Government & Fed will do the same thing in the next ~15 years, as US public debt hits $30+ trillion. If the US wanted to push its debt interest costs toward zero over time, it could have the Fed start buying up all the public debt. The cost would be debasement of the USD (the dollar would fall, commodities would soar, the US standard of living would fall, real inflation would spike). If you want a functioning market for your debt, you have to pay investor's rate of desired interest. You can massage that to some degree, which the Fed does, to try to keep interest costs under control. In Japan's case, they've gone full QE, entirely dropping the pretense of a market for their debt.

spaceflunky 9y ago
Just out of curiosity, what does that mean for Japan's real estate market? Does that policy cause RE prices to fall or rise?
- adventured 9y ago
  It'll tend to net make everything more expensive in Japan over time, for the people of Japan. That's because, particularly in their case as an island, they have to import a lot of materials. If you debase your currency to relieve your debt, then your imports go up in cost, then all construction & repair will tend to cost more in Yen terms (to the extent you have to import, eg commodities). The overall consequence of their debt relief policies, are causing a significant increase in poverty. I must have read five dozen articles over the last five or six years, covering that, eg: [2015] "Last year, the Japanese government recorded relative poverty rates of 16%—defined as the share of the population living on less than half the national median income. That is the highest on record. Poverty levels have been growing at a rate of 1.3% a year since the mid-1980s." https://www.economist.com/news/asia/21647676-poverty-worsens-more-japanese-work-non-permanent-contracts-struggling https://www.economist.com/news/asia/21647676-poverty-worsens... Japan has seen a persistent squeeze on their standard of living. Incomes have been stagnant for decades, savings rates have dropped toward zero as people are squeezed on cost of living, and costs have not fallen to offset that. Economists like to pretend that Japan has been suffering under horrific deflation for decades. That's almost entirely a lie however. They've both been hit by significant Yen devaluation, which is a form of inflation, and seen relatively little actual deflation in terms of the price of goods going down. It's why Tokyo is still one of the most expensive cities on earth, despite Japan's GDP per capita not keeping pace with other wealthy nations. To the extent you're wholly supplying your own commodities & goods domestically, you can restrain some of the devaluation effect on prices, in regards to making everything more expensive (including real-estate). Inevitably though, even in the best of cases, you end up with cost leakage that impacts your economy. In Japan's case, they're very dependent on imports, so the effect is strong. In dollar terms, their policies make everything in Japan cheaper. It makes their imports more expensive and it makes their exports generally cheaper. As Japan began this approach, they were occasionally warned about overly aggressive currency devaluation, in terms of getting labeled for it. If you're a person in Japan, living on the Yen, it doesn't help you at all, other than the very long-term prospect of finally getting out from under the crushing national debt burden. It helps exports some, which can bolster export companies there and the employment picture for anyone working in exports, but the gains are mostly wiped out by the drop in currency value over time. As a USD or Euro holder, I get to buy your Yen products for cheaper, in other words, so you gain zero real ground. They desperately need to devalue the Yen however, as they currently can't afford to upkeep the vast infrastructure they put into place over a few decades of their big public works programs. So they have to get out from under their debt interest squeeze to free up budget spending for other things that need attention.

wz1000 9y ago

> “The problem is that 30 years from now there will be a lot more retired people and proportionately fewer workers (that part’s right), and the Social Security trust fund will run out of money (as if number in a trust fund is an actual constraint on govt’s ability to spend ...silly, but they believe it), so to solve the problem we need to figure out a way to be able to provide seniors with enough money to pay for the goods and services they will need.” > With that last statement it all goes bad. They assume that the real problem of fewer workers and more retirees, which is also known as the dependency ratio, can be ‘solved’ by making sure the retirees have sufficient funds to buy what they need. Let’s look at it this way. 50 years from now when there is one person left working and 300 million retired people (I exaggerate to make the point), that guy is going to pretty busy since he’ll have to grow all the food, build and maintain all the buildings, do the laundry, take care of all medical needs, produce the TV shows, etc. etc . etc. So what we need to do is make sure those 300 million retired people have the funds to pay him??? I don’t think so! This problem obviously isn’t about money. What we need to do is make sure that one guy working is smart enough and productive enough and has enough capital goods and software to be able to get all that done, or those retirees are in serious trouble , no matter how much money they might have. > So the real problem is, if the remaining workers aren’t sufficiently productive there will be a general shortage of goods and services and more ‘money to spend’ will only drive up prices, and not somehow create more goods and services. The mainstream story deteriorates further as it continues: “Therefore, government needs to cut spending or increase taxes today, to accumulate the funds for tomorrow’s expenditures.” By now I trust you know this is ridiculous, and evidence of the deadly innocent frauds hard at work to undermine our well being and the next generation’s standard of living as well. Our government neither has or doesn’t have dollars. It spends by changing numbers up in our bank accounts, and taxes by changing numbers down in our bank accounts. And raising taxes serves to lower our spending power. That’s ok if spending is too high causing the economy to ‘overheat’ as we have too much spending power for what’s for sale in that big department store called the economy. But if that’s not the case, and, in fact, spending is falling far short of what’s needed to buy what’s offered for sale at full employment levels of output, raising taxes and taking away our spending power only makes things that much worse. > And the story gets even worse. Any mainstream economist will agree that there pretty much isn’t anything in the way of real goods we can produce today that will be useful 50 years from now. They go on to say that the only thing we can do for our descendents that far into the future is to do our best to make sure that they have the knowledge and technology to help them meet their future demands. > So the final irony is that in order to somehow ‘save’ public funds for the future, what we do is cut back on expenditures today, which does nothing but set our economy back and cause the growth of output and employment to decline. And, for the final ‘worse yet,’ the great irony is that the first thing they cut back on is education - the one thing the mainstream agrees should be done that actually helps our children 50 years down the road. Warren Mosler, Seven Deadly Frauds of Economic Policy http://www.heterodoxnews.com/htnf/htn93/Seven_Deadly_Rev12_Dec%2019%20ABBREVIATED.pdf http://www.heterodoxnews.com/htnf/htn93/Seven_Deadly_Rev12_D...

TheSpiceIsLife 9y ago

Herbivore men - I had to look it up: Herbivore men or grass-eater men (草食(系)男子 Sōshoku(-kei) danshi) is a term used in Japan to describe men who have no interest in getting married or finding a girlfriend. The term herbivore men was also a term that is described as young men who had lost their "manliness". The term was coined by the author Maki Fukasawa in an article published on 13 October 2006. Surveys of single Japanese men conducted in 2010 found that 61% of men in their 20s and 70% of men in their 30s considered themselves to be herbivores. Japan's government views the phenomenon as one possible cause of the nation's declining birth rate. According to Fukasawa, herbivore men are "not without romantic relationships, but have a non-assertive, indifferent attitude toward desires of flesh". The philosopher Masahiro Morioka defines herbivore men as "kind and gentle men who, without being bound by manliness, do not pursue romantic relationships voraciously and have no aptitude for being hurt or hurting others." https://en.m.wikipedia.org/wiki/Herbivore_men https://en.m.wikipedia.org/wiki/Herbivore_men

philwelch 9y ago
> According to Fukasawa, herbivore men are "not without romantic relationships, but have a non-assertive, indifferent attitude toward desires of flesh". The philosopher Masahiro Morioka defines herbivore men as "kind and gentle men who, without being bound by manliness, do not pursue romantic relationships voraciously and have no aptitude for being hurt or hurting others." I know I have a tendency to try and view everything through the lens of WWII, but this really sounds like after the war, the US somehow neutered the entire Japanese culture a little too thoroughly.
- TheSpiceIsLife 9y ago
  The Wikipedia entry goes on to say: Masahiro Morioka argues that Japanese herbivore men are a result of Japan's post-war peace. Since the end of World War II, Japan has not directly participated in any war or conflict, either within its own borders or outside of them. Prior to this time of peace, many Japanese felt that becoming a soldier was the only approach to becoming manly. This social norm has slowly disappeared during the following period of post-war peace. Due to this, Japanese men are less aggressive and this could bleed over into their romantic lives.