Economics Questions

Re: Why no inflation in Japan?

AJ — Wed, 24 Jun 2009 20:41:59 GMT

Nitroadict:
I can't seem to find any mention of possible austrian econ or Lvmi activity in japan, or any students there pursuing means to spread said information, which I find odd considering how keen the Japanese seem to be on saving money.

I'm pretty sure there is essentially none. Japanese intellectuals in a field like economics will so strongly tend to take on the majority opinion that Austrianism never had much chance of catching on, that is, without anyone here to profess it in their language. Getting Meltdown translated into Japanese could do wonders, though. That would be my first priority if Tom and the publisher consented (why wouldn't they?), and it's probably a fairly simple matter if things like Tony's Layguide made it over. Only problem is that it's so USA-focused. I think Woods and others hold back from analyzing Japan because they just don't know enough about it and its history, etc. The language problem is really prohibitive in some ways.

Nitroadict:
I think that alone automatically makes them smart enough, I think, to understand the absurdity of Keyenesian policy attempting to teach people "savings are bad", which the people obviously disagree with regarding their government over there, & would enable them to see economics differently.

Their savings rate is down to 15% now, but entrepreneurship has a strong tradition in Japan, especially here in Osaka. Hmm, Osaka is also the comedy center of the country, so if we could get a Japanese comedian on board and do something akin to Woods's Seinfeld-infused speeches that could be a grand slam. But maybe I'm dreaming.

Nitroadict:
Of course, from my understanding, they are not entirley tolerant of foreigners, either, so maybe that is also a factor?

meambobbo:
First off, from what I know the Japanese LOVE anything American.

They actually love foreign ideas, that's why they're so into Keynes. The thing is, they see the mainstream in the West (in any field) as the "victorious" school of thought, and it's hard to drive them out of it.

meambobbo:
There used to be an entire website devoted to this, but i can't find it now.

engrish.com

meambobbo:
As far as englightening Asia, that's a great plan in my opinion. Jim Rogers has said Asia is the wave of the future. It seems that Asia has MUCH to gain by decoupling from us.

Surely, surely. Now is a chance. The recession is starting to hit Japan hard due to the the strong yen making most exporters unprofitable for the past 8 months or so. People are getting laid off, bonuses are being cut (a cardinal sin in Japan, where bonuses are a large portion of annual salary), and people are cutting back on frills. I know they're wondering what's going on, because magazine and newspaper headlines frequently try to talk about the economy and help people understand the crisis. Every corporate annual report appeals to the financial crisis quite a bit.

Re: Why no inflation in Japan?

meambobbo — Wed, 24 Jun 2009 14:38:39 GMT

First off, from what I know the Japanese LOVE anything American. Just like we have idiots getting tattoos or wearing shirts with Japanese writing that they have no idea what it means, they have an obsession with T-shirts covered in broken English.

http://www.flickr.com/photos/72581584@N00/3035633794/ (There used to be an entire website devoted to this, but i can't find it now.)

As far as englightening Asia, that's a great plan in my opinion. Jim Rogers has said Asia is the wave of the future. It seems that Asia has MUCH to gain by decoupling from us. They keep sending us their stuff, and we keep sending them promises to pay them down the road that are becoming increasingly impossible to fulfill.

Seriously, we import massive amounts of cars from them, right? What do we send back in return? Video games? Films?

Re: Why no inflation in Japan?

Nitroadict — Wed, 24 Jun 2009 06:37:58 GMT

AJ:

Nitroadict:
Would be kind of cool if and of us managed to get there, start that LLC with 1 yen & tried to speed up the process of spreading libertarianism over there (via possibly translation services, or pahmplets, advertising, etc.). Would be quite the adventure, methinks.

Yeah, if we believe in the market, doesn't it follow that our job as promoters of liberty is to figure out how to profit from filling people's need to understand political economy better? Entrepreneurs ought to be our heroes.

I'm a translator myself, self-employed but don't have an LLC. Trick for the LLC is, last I checked, you need two full-time Japanese employees.

Ah ha, that's how they get ya.

I think it would be a good project, though, as despite searching through the site & via Google, I can't seem to find any mention of possible austrian econ or Lvmi activity in japan, or any students there pursuing means to spread said information, which I find odd considering how keen the Japanese seem to be on saving money.

I think that alone automatically makes them smart enough, I think, to understand the absurdity of Keyenesian policy attempting to teach people "savings are bad", which the people obviously disagree with regarding their government over there, & would enable them to see economics differently.

Of course, from my understanding, they are not entirley tolerant of foreigners, either, so maybe that is also a factor?

Re: Why no inflation in Japan?

AJ — Wed, 24 Jun 2009 06:04:44 GMT

Nitroadict:
Interesting, I always thought that taxes would be far higher there.

If you earn less than $50K per ear, it's 10% income tax deducted. National health insurance is optional. There is also a 5% sales tax. I don't know about business income, captial gains, or payroll taxes.

Nitroadict:
Would be kind of cool if and of us managed to get there, start that LLC with 1 yen & tried to speed up the process of spreading libertarianism over there (via possibly translation services, or pahmplets, advertising, etc.). Would be quite the adventure, methinks.

Yeah, if we believe in the market, doesn't it follow that our job as promoters of liberty is to figure out how to profit from filling people's need to understand political economy better? Entrepreneurs ought to be our heroes.

I'm a translator myself, self-employed but don't have an LLC. Trick for the LLC is, last I checked, you need two full-time Japanese employees.

Re: Why no inflation in Japan?

Nitroadict — Wed, 24 Jun 2009 03:50:11 GMT

AJ:

wilderness:
I wonder if it's some strong traditional sense that is still anchoring their ways towards savings.

I think it's just good old Japanese cautiousness.

krazy kaju:
Japan is modernizing.

In terms of consumer technology, Japan is years ahead of the US. However, ever since the Meiji Restoration over a century ago, Japanese have had a soft spot for anything new, trendy, and Western - so they fell for Keynesianism and central banking hook, line, and sinker.

One nice thing about Japan is the income tax is minimal, they hardly care about individual middle-income taxpayers, and even for businesses I hear that if you don't pay and they audit you, you are just asked nicely to pay the portion in arrears. Plus you can start an LLC with capital of 1 yen.

Interesting, I always thought that taxes would be far higher there. I had been considering moving there since I have studied the language well enough for travel purposes, as well as to possibly cater to a possible career in animation / video games etc. (I would of course get the required education finished up here, but it would be nice to not be here if the economic sh*t majorly hits the fan, methinks).

Would be kind of cool if and of us managed to get there, start that LLC with 1 yen & tried to speed up the process of spreading libertarianism over there (via possibly translation services, or pahmplets, advertising, etc.). Would be quite the adventure, methinks.

Re: Why no inflation in Japan?

AJ — Wed, 24 Jun 2009 03:37:12 GMT

ladyattis:
In this case, the culture of the population of Japan offsets the 'foreign' inflationary policy.

Whoah, that really makes sense! It's as if the BOJ is doing all they can, but the people refuse to cooperate.

I wonder, if that is the case, why wouldn't the BOJ just print more money straight up, rather than relying on the interest rate?

Re: Why no inflation in Japan?

AJ — Wed, 24 Jun 2009 03:31:31 GMT

meambobbo:
What is the "deposit" rate at a local bank? What is the rate for a certificate of deposit?

Not sure about CDs or if they even have them, but the interest rate on my savings account at Sumitomi-Mitsubishi UFJ Bank is virtually zero. I remember a while back it was 0.43%.

meambobbo:
Also, another important thing to point out is that the larcency rate in Japan is virtually 0. Thus, keeping cash in your home or on your person may actually be safer than putting it in a bank!!!

Burglary is definitely lower, but it exists conspicuously despite a violent crime rate far below any other country. However, this may be precisely because people have so much loot at home, plus the ban on guns (and katana).

meambobbo:
I doubt the Japanese feel confident about retirement, 401(k)'s etc. Also, there late 80's bubble was mostly in real estate, so I don't think anyone thinks that's a good retirement investment either.

Yeah, I think this is true. I know a lot of people who have gold bullion lying around. There was a new law introduced last year requiring ID every time you sell gold, platinum, or silver - ostensibly to prevent money laundering. Hardy-har.

meambobbo:
Maybe they're participating in our bubbles...see if you can get some opinions on foreign investment.

Sure enough, they are (or did). Like I say, they will invest in whatever is told to them by a "credible" authority, like the banking establishment. I'll ask around.

Re: Why no inflation in Japan?

AJ — Wed, 24 Jun 2009 02:46:00 GMT

wilderness:
I wonder if it's some strong traditional sense that is still anchoring their ways towards savings.

I think it's just good old Japanese cautiousness.

krazy kaju:
Japan is modernizing.

In terms of consumer technology, Japan is years ahead of the US. However, ever since the Meiji Restoration over a century ago, Japanese have had a soft spot for anything new, trendy, and Western - so they fell for Keynesianism and central banking hook, line, and sinker.

One nice thing about Japan is the income tax is minimal, they hardly care about individual middle-income taxpayers, and even for businesses I hear that if you don't pay and they audit you, you are just asked nicely to pay the portion in arrears. Plus you can start an LLC with capital of 1 yen.

Re: Why no inflation in Japan?

ladyattis — Tue, 23 Jun 2009 19:47:02 GMT

I would have to say that this shows that the ABCT isn't so silly after all, if you consider what's been shown by meambobbo. In this case, the culture of the population of Japan offsets the 'foreign' inflationary policy. Quite an interesting effect. It makes me wish I was an Anthropology or Sociology graduate right now. It would be a damn cool doctoral dissertation to work on.

Re: Why no inflation in Japan?

meambobbo — Tue, 23 Jun 2009 19:41:53 GMT

krazy kaju:
Japan is modernizing. Actually, as far as I'm concerned, Japan is already a modern country, so it's somewhat silly to say that it is modernizing considering that it is modern already.

Yeah, what an absurd view. I guess robotics is a relic of the dark ages.

Also, using modern in a manner that implies holistic economic/technological reasoning is inaccurate. Everything happening in the present is modern, no matter how uncivilized or uncomplicated it is.

Re: Why no inflation in Japan?

meambobbo — Tue, 23 Jun 2009 19:38:25 GMT

AJ, while you are there you may want to find out a couple things. What is the "deposit" rate at a local bank? What is the rate for a certificate of deposit?

Also, another important thing to point out is that the larcency rate in Japan is virtually 0. Thus, keeping cash in your home or on your person may actually be safer than putting it in a bank!!! See if you can find this sentiment to be true.

See if you can find opinions on economic outlook and financial security. A big difference between us and Japan is that our stock markets have been in a long-term bull market since the early 80's while there's has been in a long-term bear market since the early 90's. I doubt the Japanese feel confident about retirement, 401(k)'s etc. Also, there late 80's bubble was mostly in real estate, so I don't think anyone thinks that's a good retirement investment either.

Maybe they're participating in our bubbles...see if you can get some opinions on foreign investment.

Of course, if you're on vacation, enjoy yourself first!!!!

Re: Why no inflation in Japan?

krazy kaju — Tue, 23 Jun 2009 19:28:59 GMT

Japan is modernizing. Actually, as far as I'm concerned, Japan is already a modern country, so it's somewhat silly to say that it is modernizing considering that it is modern already.

Re: Why no inflation in Japan?

wilderness — Tue, 23 Jun 2009 17:24:42 GMT

Japan is very interesting in this. I wonder if it's some strong traditional sense that is still anchoring their ways towards savings. I know over the years in the U.S. it has been said that Japan is becoming more and more western, but yet from various sources over the years I keep seeing a strong traditional sense that has been able to adapt to westernizing. So instead of, as how some sources have put it, Japan is westernizing, it's more like, it seems, Japan is adopting its own western style based on a Japanese perspective. I think that would be a more precise way of describing it.

Re: Why no inflation in Japan?

AJ — Tue, 23 Jun 2009 17:15:44 GMT

Wow, thanks all! That was quite useful. I just got back from a high-class supermarket in downtown Osaka, and guess what? They don't take credit cards. However, they do let you pay by celphone, by touching it to a censor - a direct cash transfer. Quite a few Japanese people own gold as well. And many people carry enough cash on them to buy a decent used car ($3000 or so).

Strange thing is that libertarianism and Austrian economics are completely unknown in Japan, and there is only one politician in the Diet who leans libertarian. On the other hand, last year there were groups of (Japanese) people set up with informational charts and such out in front of major banks explaining about the Creature from Jekyll Island, and other anti-central-banker stuff.

Re: Why no inflation in Japan?

meambobbo — Tue, 23 Jun 2009 16:40:02 GMT

Here's a graph I made from the BoJ data. I'm not exactly sure how they define everything (What the hell is "L"?!?!?!). Cash and M1 growth no longer influence M2 like they used to. Talk about pushing on a string. Notice how the strong gains in M1 and cash are slightly offset by decreases in "quasi-money" which I assume are money market accounts/mutual funds. So it would seem that money is being created, and it is being saved; however, it is not being loaned, neither to banks nor from banks.