Which economy is the one REALLY in trouble, Japan or USA?
Gary Clark
reported in the world media about the dire state of the Japanese economy
is a bunch of nonsense.
He claims that the Japanese currently (must) have about US$26 TRILLION
in their Postal Savings accounts, or about one million dollars (on
average) per family.
His analysis is presented below.
Not being an economist myself, I am posting this here hoping for some
intelligent and meaningful comments from people who are either:
1. Economics scholars themselves
or
2. Engaged in business in Japan and seeing first hand what is going on
Thank you for your comments and input
Gary Clark
My friend's analysis is below:
* * * *
THE JAPANESE ECONOMY
* Japanese families save 24% of their incomes each year.
* The Japanese "Postal Savings Account" now exceeds $22 Trillion.
* Of the World's Top 52 Commercial Banks, 17 are Japanese, with assets
of $5.6 Trillion.
BUT--the world's media continue to report that the Japanese economy is
on the verge of collapse. How can this be?
In the article "The Social Contradictions of Japanese Capitalism"
(http://www.theatlantic.com/issues/98jun/japancap.htm)
author Murray Sayle states that the Japanese postal savings system now
holds, with insurance and pensions, the yen equivalent of $3 trillion.
But the report "Japan Statistical Yearbook, 1998", shows on page 462
that the Japanese, in just the year 1996, deposited more than 213
trillion yen (or $1.3 Trillion) in the "postal savings account." The
Japanese have been saving an average 24% of their incomes since the
early 1960s. Japanese Real GDP was $5.9 Trillion in 1997, which means
(using the 25% figure) they saved $1,416 Billion in that one year alone.
Integrated over the last 37 years, and assuming that they started at
zero in 1961 -- which considerably reduces this guess -- the Japanese
have saved more than $26.2 Trillion in the last 4 decades.
Edward W. Desmond erroneously reports that Japan's total personal
savings are a mere $13 Trillion (see
http://www.pathfinder.com/fortune/1997/970721/jpn.html). Testimony of
Martin A. Armstrong before US Congressional House Way & Means Committee
also under-reports Japan's total Personal Savings at $10 Trillion (see
www.theeurobank.com/About/TESTMONY.HTM). The United Nations "Statistical
Summary" more accurately reports the balance in their Postal Savings
Account to be $22 Trillion.
To confirm that the Japanese still save 24% of their incomes, see
http://www.nri.co.jp/nri/publications/nriqF/96winter/chap02.html
Which of these estimates are 100% correct? The Japanese won't tell us,
because they don't have the same reporting requirements that we have.
But for Murray Sayle to suggest that Japan's "postal savings ... system
now holds, with insurance and pensions, the yen equivalent of $3
trillion" is socially and morally and intellectually reprehensible.
His statement:
"The Finance Ministry has confessed that Japanese banks hold bad
loans worth a confidence-crushing 76.7 trillion yen ($614
billion), proportionally ten times as much as America's
savings-and-loan failures cost"
is correct, but intentionally misleading. Consider what a puny amount
this is in contrast to the amount of money in the Postal Savings
Accounts. The article misleadingly fails to note that a bank loss of
about 2% of their Postal Savings Accounts wouldn't even make a Samurai
lose sleep.
The real sign of idiocy in this article is the following statement:
"'If the Nikkei [the Tokyo stock index] drops below twelve
thousand, the world economy goes bust.' I checked the papers: the
Nikkei, which touched 38,915 on December 29, 1989, was yo-yoing
between 14,000 and 15,000. (It is since up.) New York in 1929
felt edgy and nervous, old-timers say, just as Japan does in the
spring of 1998."
First, the math skills of the Japanese are obviously far superior to
Murray Sayle's. The Japanese average score on the TIMSS test is 605, vs
the US score of 500, which is a clue as to why the Nikkei average is
irrelevant. The Japanese UNDERSTAND the futility of stock investing, so
they don't do it. "Japan Statistical Yearbook 1998" shows that their
TOTAL "investment" in stocks to be 9 Trillion yen--a whopping $64
Billion--less than 0.3% of their Postal Savings Account.
This point must be put in clearer language! The Japanese Nikkei
could DISAPPEAR from the face of the earth, and the average
Japanese family with the average Japanese portfolio of $1 Million
would lose a whopping $2,909 dollars.
That might be a lot to the average American family with a paltry $4,000
in Personal Savings (and $90,000 in Public Debt and $18,750 in Consumer
Debt), but it is pocket change to that Japanese family.
Why don't writers like Murray do the most basic sanity check on their
writings and ramblings? Why are they able to get away with such
egregious writing?
|---------------------------------------------------------|
|Asian | | Top 52 | Consumer & | |
|Economic | Personal | Commercial | Home Loan | Public |
|Crisis?! | Savings | Banks | Debts | Debt |
|---------|----------|------------|------------|----------|
|Japan | $23,000 | $5,600 | $178 | $1.7 |
| | Billion | Billion | Billion | Trillion |
|---------|----------|------------|------------|----------|
|US | $203 | $709 | $4,900 | $5.5 |
| | Billion | Billion | Billion | Trillion |
|---------|----------|------------|------------|----------|
|Japan:US | 113X | 7.9X | 0.036X | 0.31X |
|---------------------------------------------------------|
If 100% of our Personal Savings of $203.1 Billion per year were used to
pay off those debts, it would take us 6 years to pay off the $1.2
Trillion Consumer Credit, 18 years to pay off the $3.7 Trillion in Home
Loans, and 30 years to pay off the $6 Trillion Public Debt--or 54 years.
[Standard & Poor's "Current Statistics", July 1995, Vol. 61 #7]
Japan's Public Debt, on the other hand, is less than 8% of its Personal
Savings ($1.7 Trillion). Japan could pay off its Public Debt and have
$20 Trillion left over in Personal Savings. The Japan Statistical
Yearbook 1998 shows that Japan's total Consumer Credit including home
mortgages is only $178 Billion, giving the United States more than 27
times as much consumer debt as Japan. Japan could use its Postal Savings
Account alone to pay off all of its debt in ONE year, AND pay off all of
the U.S. debts, and still have about $10 Trillion left over.
Americans are the ones having a financial crisis, while the Japanese are
laughing all the way to the bank.
In 1973, the U.S. had four commercial banks with assets which were
larger than any other bank in the world, with twice as many assets as
the largest Japanese bank (B of A with $47 Billion vs. Dai-Ichi with $22
Billion). In 1996, Japan had 8 commercial banks which were more than
twice the size of our largest commercial bank (Bank of Tokyo with $648
Billion vs. Chase Manhattan with $272 Billion).
Of the top 52 commercial banks worldwide (The World Almanac, 1998, pg.
115), 17 are Japanese with assets of $5.6 Trillion, and three are US
with assets of $709 Billion (one eighth the assets of the top Japanese
commercial banks).
Even though Japan has more than eight times as many assets in commercial
banks than the US, the amount they have in commercial banks is ALMOST
irrelevant compared to the amount in their Postal Savings Accounts.
THE FACTS:
1) The US has never had a higher Public Debt, a higher Consumer Debt,
nor a lower level of personal savings than it now has.
2) The real purchasing power of today's U.S. incomes are literally one
third of what they were in 1973.
3) The U.S. hasn't had an after-inflation GDP growth rate in the last 30
years which comes even close to the average after-inflation growth rate
of Japan for 48 of the last 50 years.
Aaron M. Renn
>I have a friend who claims that all the doom and gloom currently being
>reported in the world media about the dire state of the Japanese economy
>is a bunch of nonsense.
It's one thing to have lots of money in the bank. It's another to spend it.
The problem with the Japanese economy is that no one is spending any of
their money, they are hording it in the bank as you mentioned. Hence many
people have described the situation in Japan today as a Keynesian liquidity
trap.
Japanses banks might have lots of assets, but they also have huge
liabilities. They took in deposits (liabilities) and lent them out as
highly speculative loans (assets) with grossly over inflated land values as
collateral. When the price of land collapsed and these loans went sour, the
asset values - while still extremely large in the aggregate - plunged to
nearly the level of liabilities, leading many banks to the brink of
insolvency.
--
Aaron M. Renn (ar...@urbanophile.com) http://www.urbanophile.com/arenn/
Gary Clark
> >reported in the world media about the dire state of the Japanese economy
> >is a bunch of nonsense.
>
> The problem with the Japanese economy is that no one is spending any of
> their money, they are hording it in the bank as you mentioned. Hence many
> people have described the situation in Japan today as a Keynesian liquidity
> trap.
>
> Japanses banks might have lots of assets, but they also have huge
> liabilities. They took in deposits (liabilities) and lent them out as
> highly speculative loans (assets) with grossly over inflated land values as
> collateral. When the price of land collapsed and these loans went sour, the
> asset values - while still extremely large in the aggregate - plunged to
> nearly the level of liabilities, leading many banks to the brink of
> insolvency.
That sounds like a good explanation, and maybe it is. However, my friend
claims that the solvency or insolvency of the Japanese banks is
irrelevent, since the astronomical amounts on deposit are in the postal
savings accounts, not the banks. He also claims that the existence of
these huge deposits provide an underlying strength and stabilizing
influence for the Japanese economy that is totaly lacking in the U.S.
His thesis is that it doesn't matter how bad business may get in Japan,
the typical Japanese family has so much saved they can ride out almost
anything.
Gary Clark
David Ladley
<36225941...@words-that-work.org>...
> I have a friend who claims that all the doom and gloom currently being
> reported in the world media about the dire state of the Japanese economy
> is a bunch of nonsense.
I agree, and I'm glad to see someone who can see through all the B.S. The
Japanese are sitting on mountains of cash. The only "crisis" is that the
mountains of cash have stopped growing!
I heard an analyst estimate in the early 90s that if Japanese were to cut
off all sources of national revenue permanently, they'd still have enough
capital to maintain their current standard of living for 2 or 3 more
generations. I'd believe that.
Dave Ladley
Thomas Henneke
Outlook Express 4.72.2106.4 couldn´t resist:
>It's one thing to have lots of money in the bank. It's another to spend it.
>The problem with the Japanese economy is that no one is spending any of
>their money, they are hording it in the bank as you mentioned.
You have overseen one important point:
the demographic situation.
If you take a look at the atlas then you come to the conclusion that
the population of Japan is *old*. This problem will last for many
years, perhaps 30 years. Retirements, culture, ...
I am very pessimistic on the NIKKEY index and I consider shorting for
a long time. Don´t get me wrong! It is not an offense against
Japanese.
--
Noch benutze ich Fenster95 von WinzigWeich
Robato Yao
>Gary Clark <Ga...@words-that-work.org> wrote in article
><36225941...@words-that-work.org>...
>> reported in the world media about the dire state of the Japanese economy
>> is a bunch of nonsense.
>
>Japanese are sitting on mountains of cash. The only "crisis" is that the
>mountains of cash have stopped growing!
>
>I heard an analyst estimate in the early 90s that if Japanese were to cut
>off all sources of national revenue permanently, they'd still have enough
>capital to maintain their current standard of living for 2 or 3 more
>generations. I'd believe that.
>
>Dave Ladley
Is that enough to cover about $600 billion dollars worth of bad loans in
Japanese banks?
Rgds,
Chris
(counting down from top 50 oxymorons...)
10. Tight slacks
9. Definite maybe
8. Pretty ugly
7. Twelve-ounce pound cake
6. Diet ice cream
5. Rap music
4. Working vacation
3. Exact estimate
2. Religious tolerance
And the NUMBER ONE top oxy-MORON
1. Microsoft Works
---From the Top 50 Oxymorons (thanks to Richard Kennedy)
Robato Yao
>Gary Clark <Ga...@words-that-work.org> wrote in article
><36225941...@words-that-work.org>...
>> reported in the world media about the dire state of the Japanese economy
>> is a bunch of nonsense.
>
>Japanese are sitting on mountains of cash. The only "crisis" is that the
>mountains of cash have stopped growing!
The Japanese are not sitting on mountains of cash, at least according to
the ones I talk to. I do considerable business with Japan, and since
these are mostly businessmen I talk to, and more likely to be in a
position to be millionaires.
The economy is not as bad as Western media put it, but it is not growing
nor does it paint a happy picture. Neither is their living standard
declining by any means.
>
>I heard an analyst estimate in the early 90s that if Japanese were to cut
>off all sources of national revenue permanently, they'd still have enough
>capital to maintain their current standard of living for 2 or 3 more
>generations. I'd believe that.
>
>Dave Ladley
Unfortunately that is not how many Japanese feel. During the last few
years, they have curtailed their spending a lot. I know businesses that
sell luxury goods to Japanese tourists, and these businesses all report
successive declines in purchases. So are many overseas investments,
although it may be that investments are either being shifted away from
the United States into China or being used to cover losses at home.
I learned to be skeptical about figures from Japan. Somehow because of
real estate prices, values take on a warped dimension---Tokyo downtown
real estate may cost more than the entire land value of the United
States. Banks have been known to hide the real value of their bad
loans. As for savings accounts, deposits does not mean availability of
cash. A deposit practically means that you "lent" your money to a bank
or institution, which in turn, invests it somewhere else. It has to
invest the money somewhere in order just to cover the interest. Even
postal savings accounts. How do you know if these are invested non
soluble assets like real estate? If you invested in overpriced real
estate, it's not technically a "bad loan" yet. It's just not
convertible to cash quickly. Actually, unless you have a buyer, it's
not convertible to cash at all. So long you can pay your principals and
interest, it's not a bad loan until you can't maintain your principal
and interest payments.
If all of Japan would try to withdraw that $26 trillion out of those
savings accounts, the actual cash reserves will not cover it by far.
This is true of any bank or institution.
Grinch
>I have a friend who claims that all the doom and gloom currently being
>reported in the world media about the dire state of the Japanese economy
>is a bunch of nonsense.
>
>He claims that the Japanese currently (must) have about US$26 TRILLION
>in their Postal Savings accounts, or about one million dollars (on
>average) per family.
They "must" have, eh?
Some sort of "common sense alarm" ought to go off on hearing a claim
like this. If everybody in Japan is a millionaire that really would
be something to talk about. But then why are so many Japanese slaving
away in salarymen's jobs?
You don't have to be an economist to refute an absurd number like
this. Use common sense. Pick up an almanac and look at the real
savings numbers for different countries. If you start adding up the
numbers for the major countries you'll soon see that total *world*
savings is a little more than $30 trillion.
Your friend deduces that $26 trillion of this is in Japanese postal
savings. Then the Japanese also have savings in pensions, life
insurance, the stock market, and cookie jars. So Japanese savings
alone exceed total world savings by several trillion?
>His analysis is presented below.
I wouldn't exactly call it "analysis" when he doesn't seem to have
read his own sources. For instance, your friend says...
>To confirm that the Japanese still save 24% of their incomes, see
>http://www.nri.co.jp/nri/publications/nriqF/96winter/chap02.html
And following that link, we read:
"As of 1994, the savings rate had already dropped to 12.8 percent..."
Not very convincing, that. Less than rigorous as analysis goes.
>Not being an economist myself, I am posting this here hoping for some
>intelligent and meaningful comments from people who are either:
>
>1. Economics scholars themselves
>or
>2. Engaged in business in Japan and seeing first hand what is going on
>
>Thank you for your comments and input
>
>Gary Clark
>
>My friend's analysis is below:
Your friends "analysis" is most notable as a Rube Goldberg-like
construction of false deductions built on mistakes of fact.
If one wants real information on this subject, one need not go through
all this misspent effort. Just look up the numbers at a source like
the OECD, http://www.oecd.org , or the Japanese Statistics Bureau,
whose 'Japan in Figures' web page is at
http://www.stat.go.jp/1611m.htm
The yen-dollar exchange rate has moved around a lot, but using the
current rate, for the record, Japanese personal savings are a little
over $10 trillion. That's a lot, about a third of the world total, but
nowhere near what your friend deduces.
Of this $10 trillion, deposits of *all* kinds, including postal
savings, total about $6 trillion. Life insurance accounts for about
$2.5 trillion. About $0.5 trillion are in stocks. You can look up the
exact numbers for it all yourself if you wish.
In 1996 the average Japanese household had savings of $109,400 and
liabilities of $41,300, for a net of $68,100. Very good indeed by
American standards -- but nothing like the $1 million your friend
deduces.
Note that the above figures are set at the exhange-rate value, *not*
at what they would actually buy.
The purchasing power parity value of the yen currently is only
64% of its exchange rate value, according to the OECD. That means the
$10 trillion of savings that the Japanese have are worth only $6.4
trillion in terms of what a dollar buys in the U.S. And the
purchasing value of the average Japanese household's net $68,100 in
savings is $43,500.
So much for your friend's thesis.
I'll just add a few comments below, between snips.
>* * * *
>
>THE JAPANESE ECONOMY
>
>* Japanese families save 24% of their incomes each year.
>* The Japanese "Postal Savings Account" now exceeds $22 Trillion.
>* Of the World's Top 52 Commercial Banks, 17 are Japanese, with assets
> of $5.6 Trillion.
And what number does your friend give for the *liabilities* of these
banks?
<snip>
>The Japanese have been saving an average 24% of their incomes since the
>early 1960s.
Again, your friend's own source gives the Japanese savings rate as
12.8%.
>Japanese Real GDP was $5.9 Trillion in 1997,
$4.2 trillion, from the OECD, the keeper of such stats.
>which means
>(using the 25% figure) they saved $1,416 Billion in that one year alone.
Among many other things, your friend doesn't know that GDP does not
equal personal income, so you don't figure personal savings by
multiplying GDP by the personal savings rate.
>Integrated over the last 37 years, and assuming that they started at
>zero in 1961 -- which considerably reduces this guess -- the Japanese
>have saved more than $26.2 Trillion in the last 4 decades.
This is getting humorous.
For fun, let's try this. The Japanese savings rate is 12%-13%. Here
are some actual savings rates for other nations: Portugal 17%, Turkey
16%, Korea 24%, Luxembourg 24%, Netherlands 14%, Norway 14%, etc.
Assume they all started saving at this rate in 1961. Which one of
them is going to own the world first?
<snip>
>To confirm that the Japanese still save 24% of their incomes, see
>http://www.nri.co.jp/nri/publications/nriqF/96winter/chap02.html
Tell your friend to read the link he provided.
<snip>
>... for Murray Sayle to suggest that Japan's "postal savings ... system
>now holds, with insurance and pensions, the yen equivalent of $3
>trillion" is socially and morally and intellectually reprehensible.
Actually, this looks like the one correct number your friend gives:
The Japanese have about $2 trillion in postal savings and $1 trillion
in postal insurance contracts.
<snip>
>The real sign of idiocy in this article is the following statement:
>
> "'If the Nikkei [the Tokyo stock index] drops below twelve
> thousand, the world economy goes bust.' I checked the papers: the
> Nikkei, which touched 38,915 on December 29, 1989, was yo-yoing
> between 14,000 and 15,000. (It is since up.) New York in 1929
> felt edgy and nervous, old-timers say, just as Japan does in the
> spring of 1998."
>
>First, the math skills of the Japanese are obviously far superior to
>Murray Sayle's.
Um, if I were your friend I wouldn't criticize anybody else's math
skills.
<some mathematical nonsense snipped>
> This point must be put in clearer language! The Japanese Nikkei
> could DISAPPEAR from the face of the earth, and the average
> Japanese family with the average Japanese portfolio of $1 Million
> would lose a whopping $2,909 dollars.
Aside from what you know now about Japanese household wealth, your
friend here is missing the very basic point that Japanese banks,
unlike US banks, include stock investments in their capital base.
That's the point of the magic 14,000 Nikkei number on Tokyo
stock exchange. Under 14,000 Japanese bank capital starts
disappearing -- reportedly they have to call in $100 billion in loans
for every 1,000 point drop.
Perhaps you've heard of the "money multiplier" -- how calling in
one loan can result in many other loans being called in, as in the
early 1930s.
Your friend starts by noting that the Japanese have 17 of the
world's largest banks -- by assets, not "health" or net value.
Imagine them all imploding at once as their capital disappears.
>Why don't writers ... do the most basic sanity check on their
>writings and ramblings? Why are they able to get away with such
>egregious writing?
Now that's a *good* question!
<merciful snip of the rest>
Nona Myers
(Grinch) wrote:
Thank you very much for this interesting thread. Your statements
below answered questions I had about why 14,000 was a magic
number for Nikkei.
>
>Aside from what you know now about Japanese household wealth, your
>friend here is missing the very basic point that Japanese banks,
>unlike US banks, include stock investments in their capital base.
> That's the point of the magic 14,000 Nikkei number on Tokyo
>stock exchange. Under 14,000 Japanese bank capital starts
>disappearing -- reportedly they have to call in $100 billion in loans
>for every 1,000 point drop.
> Perhaps you've heard of the "money multiplier" -- how calling in
>one loan can result in many other loans being called in, as in the
>early 1930s.
> Your friend starts by noting that the Japanese have 17 of the
>world's largest banks -- by assets, not "health" or net value.
>Imagine them all imploding at once as their capital disappears.
>
Perhaps you can answer a question I have that's been puzzling to
me for a while. When personal savings rate is quoted, does this
include 401K, thrift investment program for US Federal employees,
and other similar retirement-incentive type of savings and
investments?
Also, in your figures for individual net assets , does this
include real estate as well?
TIA
--
Nona Myers
(another hapa and foodie)
To learn about hapa: http://www.hapaissuesforum.org/
Patrick O'Connolly
Is that enough to cover about $600 billion dollars worth of bad loans in
Japanese banks?
Rgds,
***
Is it the job of the Japanese people to throw away there savings to the
banks who speculated, perhaps in the US the people are foolish enough to
bail-out the risk taking bankers, but maybe the Japanese people aren't so
stupid ???
sincerely,
Patrick O'Connolly
Japanese people aren't practicing insane consumption simply means that its
going to take time, but then again in the past the Japanese economy was
insane, perhaps we have a generational change where people are questioning
...
1.) ten dollar cups of coffee
2.) one hundred dollar sushi dinners
The past five years in Japan was a lot like 1920's Americana, the party in
Japan is over, we know have a depression generation that is holding there
cash, and of course that lack of spending is pissing off the world
consumption system. However I think that the this is the better approach
from a economic security point of view,
On the other hand take the US massive credit spending, insane use of credit
cards, most folks have negative net worth, how long can this last???
Look last week the dollar went down 20% relative to the yen, and we had to
raise interest rates to keep the world buying our t-bonds.
Finally I spent three months last fall in Asia, and even in South Korea,
things looked pretty good, lots of new cars, no homeless, Shanghai is
booming its like a wild-west frontier town, My personal opinion is that the
US media wants us to believe simply that someone somewhere is worse off than
we are, but the fact is the US is quickly becoming a second class nation,
SIncerely,
Robato Yao
>Asia has had its fall the US has not yet seen the fall, the fact that the
>Japanese people aren't practicing insane consumption simply means that its
>going to take time, but then again in the past the Japanese economy was
>insane, perhaps we have a generational change where people are questioning
>
>1.) ten dollar cups of coffee
How about US$22 movie tickets?
>2.) one hundred dollar sushi dinners
How many people? Usually if I have about three people of moderate
appetite, I can get $60. Do a lot of exotic fishfood into the sushi and
it can easily go up to $70 a person. In Japan though, in the
opposite end of the scale, there are places you can get sushi real
cheap, which I don't see for sushi bars outside of the country. $2.50
for 3 pcs cut from a roll like tekkamaki is reasonable.
If you go to Robert De Niro's sushi bar named Nobu in New York, some of
the sushi there goes like $80 a pop. That's only for three
pieces. (The chef, and De Niro's partner in the venture, has a first
name of Nobuhiro.)
Then of course, at the height of decadence, there is also the infamous
gold filling sushi (sushi sprinkled with gold powder). Much more
appetizing is sushi served right on top of a naked woman.
The Japanese are not the only culprits though. At the height of the
Asian boom, I heard of Chinese serving US$5000 or $10,000 pan-to (per
dinner table) serving various exotic unnamables or endangered species.
In Hong Kong or Taiwan, they have luscious Chinese New Year dinners
specifically at HK$888.88 per person or HK$8888.88 per table or panto.
(Taiwan NT$ if in Taiwan.) Exchange rate is 7.2 HK$ per US$.
That's because 8 is considered lucky for Chinese, since it sounds close
to growth/prosperity (Cantonese: Fat Fat Fat or Hokkien: Huat Huat
Huat.) Even in times of misfortune like this Tiger year, I'm sure Hong
Kong is still going to splurge on such dinners in the hope of attracting
better luck next year.
(Tiger Year is always bad for US President---1998: Monica Lewinsky;
1986: Irangate: 1974: Watergate; 1962: JFK Assasination).
>
>The past five years in Japan was a lot like 1920's Americana, the party in
>Japan is over, we know have a depression generation that is holding there
>cash, and of course that lack of spending is pissing off the world
>consumption system. However I think that the this is the better approach
>from a economic security point of view,
Japan went down in the early nineties, right back in during Bush's
administration, shortly after their stock market collapsed. For the
rest of the Nineties, Japan is actually in some sort of stuttering
economic movement that seems to keep getting worst every year, although
everyone keeps hoping for the better next year.
>
>On the other hand take the US massive credit spending, insane use of credit
>cards, most folks have negative net worth, how long can this last???
>
>Look last week the dollar went down 20% relative to the yen, and we had to
>raise interest rates to keep the world buying our t-bonds.
Just when the Yen is getting competitive and Japanese exporters are
trying to get aggressive again, then the dollar goes down and throws
cold water on them. Money flunctuations like that cost Japanese export
distributors heavy money. In a weak economy you are supposed to have a
weak currency to spur exports, but a weak economy with a strong currency
is a dilemna.
>
>Finally I spent three months last fall in Asia, and even in South Korea,
>things looked pretty good, lots of new cars, no homeless, Shanghai is
>booming its like a wild-west frontier town, My personal opinion is that the
>US media wants us to believe simply that someone somewhere is worse off than
>we are, but the fact is the US is quickly becoming a second class nation,
>
You enjoy Shanghai? Wild West frontier town does not do it
justice---that's more applicable to many small towns. Shanghai is
actually, more and more, a city of the future with architecture fitting
for a William Gibson novel. What they are doing there is out of
this world. Most people's view of Shanghai is that romantic image shot
of the Bund with its old European architecture. Look towards the
horizon across the Yangtze, and an incredible city of ultra modern sky
scrapers are being built, spearheaded with that massive tower (I think
it's the Pearl Tower) with that huge metallic globe. I think they're
putting up more skyscrapers there than in Hong Kong.
This ultramodern city is in total contrast to the image Western media
portray to the impression of the outside world as a third world
developing Communist city. The infrastructure, communication,
telephone, roads, etc,. all state of the art.
On the other hand, if they don't fill up those nice shiny buildings with
paying tenants, they're setting themselves up for a real painful real
estate fall.
Rgds,
Chris
>SIncerely,
fathersm...@usa.net
oldn...@mindspring.com wrote:
> Gary Clark <Ga...@words-that-work.org> wrote:
>
> >I have a friend who claims that all the doom and gloom currently being
> >reported in the world media about the dire state of the Japanese economy
> >is a bunch of nonsense.
> >
> >He claims that the Japanese currently (must) have about US$26 TRILLION
> >in their Postal Savings accounts, or about one million dollars (on
> >average) per family.
>
> They "must" have, eh?
>
> Some sort of "common sense alarm" ought to go off on hearing a claim
> like this. If everybody in Japan is a millionaire that really would
> be something to talk about. But then why are so many Japanese slaving
> away in salarymen's jobs?
Because the Japanese have something which we used to have, about 30 years ago:
"work ethic".
For reference, please see:
a) Japan Statistical Yearbook, 1998, Statistics Bureau, Management &
Coordination Agency, Government of Japan, pgs. 458.
b) The Europa World Yearbook, 1996 Volume 1, 37th Edition, banks.
c) Current Statistics, Standard & Poor's, July 1995, Vol. 61 #7.
d) Journal of Japanese Studies, "How Postal Savings and Public Pensions
Support High Rates of Household Savings in Japan", Stephen J. Anderson, pg.
88.
e) Testimony before Congress of Martin A. Armstrong which reports that Japan's
Postal Savings Accounts contain $10 Trillion
(http://www2.crosswinds.net/san-diego/~manifesto/j3.htm)
f) Personal Savings in Japan, which has been updated since last posted
www2.crosswinds.net/san-diego/~manifesto/japansaving.htm
>
> You don't have to be an economist to refute an absurd number like
> this. Use common sense. Pick up an almanac and look at the real
> savings numbers for different countries. If you start adding up the
> numbers for the major countries you'll soon see that total *world*
> savings is a little more than $30 trillion.
Please post the title of the Almanac and the page number which contains the
information about Japan's savings or savings rate.
>
> Your friend deduces that $26 trillion of this is in Japanese postal
> savings. Then the Japanese also have savings in pensions, life
> insurance, the stock market, and cookie jars. So Japanese savings
> alone exceed total world savings by several trillion?
>
> >His analysis is presented below.
>
> I wouldn't exactly call it "analysis" when he doesn't seem to have
> read his own sources. For instance, your friend says...
>
> >To confirm that the Japanese still save 24% of their incomes, see
> >http://www.nri.co.jp/nri/publications/nriqF/96winter/chap02.html
>
> And following that link, we read:
> "As of 1994, the savings rate had already dropped to 12.8 percent..."
You should read this again before concluding that the above 12.8% is correct.
The article stated the Japanese "on average saved 23.9 percent of their
annual income between 1980 and 1994". Now, for 14 years (and from my
personal knowledge from having lived in Japan, for at least the 30 years
preceding this) the Japanese saved an AVERAGE of 23.9%.
This single article is the only evidence I have found that suggests that this
savings rate in 1994 actually did drop to 12.8%, and it contradicts all of the
inputs from people in Japan today, who report that they still save the same as
they always have.
>
> Not very convincing, that. Less than rigorous as analysis goes.
>
> >Not being an economist myself, I am posting this here hoping for some
> >intelligent and meaningful comments from people who are either:
> >
> >1. Economics scholars themselves
> >or
> >2. Engaged in business in Japan and seeing first hand what is going on
> >
> >Thank you for your comments and input
> >
> >Gary Clark
> >
> >My friend's analysis is below:
>
> Your friends "analysis" is most notable as a Rube Goldberg-like
> construction of false deductions built on mistakes of fact.
>
> If one wants real information on this subject, one need not go through
> all this misspent effort. Just look up the numbers at a source like
> the OECD, http://www.oecd.org , or the Japanese Statistics Bureau,
> whose 'Japan in Figures' web page is at
> http://www.stat.go.jp/1611m.htm
>
> The yen-dollar exchange rate has moved around a lot, but using the
> current rate, for the record, Japanese personal savings are a little
> over $10 trillion. That's a lot, about a third of the world total, but
> nowhere near what your friend deduces.
> Of this $10 trillion, deposits of *all* kinds, including postal
> savings, total about $6 trillion. Life insurance accounts for about
> $2.5 trillion. About $0.5 trillion are in stocks. You can look up the
> exact numbers for it all yourself if you wish.
The above references show the following in Japanese savings accounts:
1) Total Deposits in Domestically
Licensed Banks 477 trillion yen
(Private Deposits grew from 37.5
trillion in 1970 to 402 trillion
in 1996--10% compounded annually)
2) Credit Associations 113 trillion yen
(grew from 24 trillion yen in 1975
to 113.3 trillion yen in 1996--6%
compounded annually)
3) Private Commercial Banks 700 trillion yen
4) Trust Banks 251 trillion yen
5) Shankin 107 trillion yen
6) Foreign Banks 4 trillion yen
7) Postal Savings Accounts 1,200 trillion yen
Total in yen 2,852 trillion yen
Total in dollars $23.7 trillion
>
> In 1996 the average Japanese household had savings of $109,400 and
> liabilities of $41,300, for a net of $68,100. Very good indeed by
> American standards -- but nothing like the $1 million your friend
> deduces.
Are the above numbers from the OECD? Could you post the original cites?
>
> Note that the above figures are set at the exhange-rate value, *not*
> at what they would actually buy.
> The purchasing power parity value of the yen currently is only
> 64% of its exchange rate value, according to the OECD. That means the
> $10 trillion of savings that the Japanese have are worth only $6.4
> trillion in terms of what a dollar buys in the U.S. And the
> purchasing value of the average Japanese household's net $68,100 in
> savings is $43,500.
If it stays in the bank, this is irrelevant. If it is spent in the US, it is
irrelevant. Only if it is spent in Japan, which none of it ever has been,
would it be relevant.
>
> So much for your friend's thesis.
>
> I'll just add a few comments below, between snips.
>
> >* * * *
> >
> >THE JAPANESE ECONOMY
> >
> >* Japanese families save 24% of their incomes each year.
> >* The Japanese "Postal Savings Account" now exceeds $22 Trillion.
> >* Of the World's Top 52 Commercial Banks, 17 are Japanese, with assets
> > of $5.6 Trillion.
>
> And what number does your friend give for the *liabilities* of these
> banks?
Per Reference a) above, pg. 467, Japan's total "Housing Credit and Consumer
Credit" is 25 trillion yen, which is $208 Billion. Compared to the US ($1.2
Trillion in Consumer Credit and $3.7 Trillion in Home Loans) our total
consumer debt is 23 times the size of Japan's consumer debt.
It is ludicrous to say that we have a "Personal Savings Rate" of 0.4%, when
0.4% of GDP would be $28 Billion and when our consumer credit is 175 times
higher than our total "savings". This personal savings number is a mere
accounting error in contrast to the debt.
Japan on the other hand has 113 times as much in savings as in consumer debt.
>
> <snip>
>
> >The Japanese have been saving an average 24% of their incomes since the
> >early 1960s.
>
> Again, your friend's own source gives the Japanese savings rate as
> 12.8%.
Wrong. Read the article again and note that it confirms that Japan's savings
rate for at least the 14 years prior to 1994 was 23.9%. Read Reference d)
above which confirms that Japanese savings tripled in the 10 years between
1975 and 1985.
If Japan was saving at a rate of 23.9% between 1980 and 1994, savings most
likely tripled again from 1985 to 1995.
A drop in the savings rate in Japan from 23.9% to 12.8% is alarming. Japan's
savings rate plunged from being 59 times higher than the US rate to "only" 32
times higher.
>
> >Japanese Real GDP was $5.9 Trillion in 1997,
>
> $4.2 trillion, from the OECD, the keeper of such stats.
The UN reports it as $5.9 Trillion, and it is likely that the difference is in
the "purchasing power parity" you refer to above.
>
> >which means
> >(using the 25% figure) they saved $1,416 Billion in that one year alone.
>
> Among many other things, your friend doesn't know that GDP does not
> equal personal income, so you don't figure personal savings by
> multiplying GDP by the personal savings rate.
>
Correct. The problem in Japan is that GDP is calculated much differently
than it is in the US. For example, Japanese receive a year-end bonus, which
could be half of their salaries. It seems that they do this to avoid
reporting this as income which applies to GDP. This also deflates the
savings figures.
> >Integrated over the last 37 years, and assuming that they started at
> >zero in 1961 -- which considerably reduces this guess -- the Japanese
> >have saved more than $26.2 Trillion in the last 4 decades.
>
> This is getting humorous.
>
> For fun, let's try this. The Japanese savings rate is 12%-13%. Here
> are some actual savings rates for other nations: Portugal 17%, Turkey
> 16%, Korea 24%, Luxembourg 24%, Netherlands 14%, Norway 14%, etc.
> Assume they all started saving at this rate in 1961. Which one of
> them is going to own the world first?
>
Again, the Japanese AVERAGED 23.9% per year for 14 years. Only one reference
suggests that this rate dropped to 12.8%, and this reference is inconsistent
with personal observations of Japanese savings habits.
> <snip>
>
> >To confirm that the Japanese still save 24% of their incomes, see
> >http://www.nri.co.jp/nri/publications/nriqF/96winter/chap02.html
>
> Tell your friend to read the link he provided.
>
> <snip>
>
> >... for Murray Sayle to suggest that Japan's "postal savings ... system
> >now holds, with insurance and pensions, the yen equivalent of $3
> >trillion" is socially and morally and intellectually reprehensible.
>
> Actually, this looks like the one correct number your friend gives:
> The Japanese have about $2 trillion in postal savings and $1 trillion
> in postal insurance contracts.
Please post your cites. Note that the testimony of Martin A. Armstrong before
US Congressional House Way & Means Committee reports Japan's total Postal
Savings Accounts at $10 Trillion (see
http://www2.crosswinds.net/san-diego/~manifesto/j3.htm). He might have been
wrong, but his testimony is consistent with the savings habits of the
Japanese for the last 50 years.
>
> <snip>
>
> >The real sign of idiocy in this article is the following statement:
> >
> > "'If the Nikkei [the Tokyo stock index] drops below twelve
> > thousand, the world economy goes bust.' I checked the papers: the
> > Nikkei, which touched 38,915 on December 29, 1989, was yo-yoing
> > between 14,000 and 15,000. (It is since up.) New York in 1929
> > felt edgy and nervous, old-timers say, just as Japan does in the
> > spring of 1998."
> >
> >First, the math skills of the Japanese are obviously far superior to
> >Murray Sayle's.
>
> Um, if I were your friend I wouldn't criticize anybody else's math
> skills.
>
> <some mathematical nonsense snipped>
>
> > This point must be put in clearer language! The Japanese Nikkei
> > could DISAPPEAR from the face of the earth, and the average
> > Japanese family with the average Japanese portfolio of $1 Million
> > would lose a whopping $2,909 dollars.
>
> Aside from what you know now about Japanese household wealth, your
> friend here is missing the very basic point that Japanese banks,
> unlike US banks, include stock investments in their capital base.
> That's the point of the magic 14,000 Nikkei number on Tokyo
> stock exchange. Under 14,000 Japanese bank capital starts
> disappearing -- reportedly they have to call in $100 billion in loans
> for every 1,000 point drop.
What you are overlooking is the fact that the Japanese don't "invest" in the
stock market. The astounding figure in Reference a) above is that the
Japanese have only 9 billion (NOT trillion as erroneously reported before)
yen in stocks and securities.
9 billion yen is $75 Million, which is less than 0.0004% of what they have in
savings.
Maybe I am reading this wrong? If so, please read it and let me know what
part I missed. $75 Million is such a low number that I don't even believe
it, not because I think the Japanese have decided to become gamblers in the
stock market, but because of how the media has used the Nikkei to convince a
lot of Americans that Japan is in trouble.
> Perhaps you've heard of the "money multiplier" -- how calling in
> one loan can result in many other loans being called in, as in the
> early 1930s.
> Your friend starts by noting that the Japanese have 17 of the
> world's largest banks -- by assets, not "health" or net value.
> Imagine them all imploding at once as their capital disappears.
>
> >Why don't writers ... do the most basic sanity check on their
> >writings and ramblings? Why are they able to get away with such
> >egregious writing?
>
> Now that's a *good* question!
>
> <merciful snip of the rest>
>
>
-----------== Posted via Deja News, The Discussion Network ==----------
http://www.dejanews.com/ Search, Read, Discuss, or Start Your Own
fathersm...@usa.net
cro...@kuentos.guam.net (Robato Yao) wrote:
> >Finally I spent three months last fall in Asia, and even in South Korea,
> >things looked pretty good, lots of new cars, no homeless, Shanghai is
> >booming its like a wild-west frontier town, My personal opinion is that the
> >US media wants us to believe simply that someone somewhere is worse off than
> >we are, but the fact is the US is quickly becoming a second class nation,
> >
Do you think it is the US media, or the Japanese media?
Japan seems to be trying to conceal the fact that they now have all of the
world's personal savings, with these stories about how bad the Japanese
economy is doing.
fathersm...@usa.net
> current rate, for the record, Japanese personal savings are a little
> over $10 trillion. That's a lot, about a third of the world total, but
> nowhere near what your friend deduces.
> Of this $10 trillion, deposits of *all* kinds, including postal
> savings, total about $6 trillion. Life insurance accounts for about
> $2.5 trillion. About $0.5 trillion are in stocks. You can look up the
> exact numbers for it all yourself if you wish.
Could you post your cite for this "$0.5 trillion are in stocks"?
My cites show that the real number is 9 billion yen, or a mere $75 million.
Thanks
Mike Fester
: In article <3622e750...@news.mindspring.com>,
: oldn...@mindspring.com wrote:
: > Gary Clark <Ga...@words-that-work.org> wrote:
: >
: > >I have a friend who claims that all the doom and gloom currently being
: > >reported in the world media about the dire state of the Japanese economy
: > >is a bunch of nonsense.
: > >
: > >He claims that the Japanese currently (must) have about US$26 TRILLION
: > >in their Postal Savings accounts, or about one million dollars (on
: > >average) per family.
: >
: > They "must" have, eh?
: >
: > Some sort of "common sense alarm" ought to go off on hearing a claim
: > like this. If everybody in Japan is a millionaire that really would
: > be something to talk about. But then why are so many Japanese slaving
: > away in salarymen's jobs?
:
: Because the Japanese have something which we used to have, about 30 years ago:
: "work ethic".
Speaking of the "common sense alarm" not going off...
If the Japanese have this "work ethic", then why do almost all studies
indicate that the US worker is more productive? Do the Japanese have a
"work POORLY ethic"?
And $1 M/family in savings should mean that they have more money than
ever; so, how do you account for the fact that domestic consumption is
DOWN, not up? Why the record numbers of bankrupticies? The record
unemployment?
Just out of SHEEREST curiosity, have you ever been to Japan? Can you
find it on the map, even?
Mike
fathersm...@usa.net
"David Ladley" <lad...@panther.middlebury.edu> wrote:
> Gary Clark <Ga...@words-that-work.org> wrote in article
> <36225941...@words-that-work.org>...
> > I have a friend who claims that all the doom and gloom currently being
> > reported in the world media about the dire state of the Japanese economy
> > is a bunch of nonsense.
>
> Japanese are sitting on mountains of cash. The only "crisis" is that the
> mountains of cash have stopped growing!
>
> off all sources of national revenue permanently, they'd still have enough
> capital to maintain their current standard of living for 2 or 3 more
> generations. I'd believe that.
>
> Dave Ladley
>
Thank you for seeing through all the bs, Dave, and noting the facts behind the
media myths.
Documented sources put Japan's total savings at $12 Trillion, but they have
been saving 24% of their incomes ever since WWII. There have been some
exceptions during this time, but that was the AVERAGE. Noting that Japan's
median income today is $59,000, and noting that there are 58 million Japanese
workers, suggests that 58 million workers saved last year about $14,160 each,
which adds up to $821 Billion IN ONE YEAR.
If they have been doing this since 1948, then it looks like their total
savings probably exceed $20 Trillion.
Their savings might be even bigger than this. I don't see how the number
could be as low as $12 Trillion when they have been saving such a high
percentage of their incomes for so long. Where did the money go? They put
about a third of it in Postal Savings Accounts, which are themselves reported
to contain $10 Trillion. The other two thirds may be another $20 Trillion.
Why all the stories about doom and gloom in Japan? It sure looks like
somebody doesn't want us to know abou this, doesn't it?
John Knight
Robato Yao
>In article <701jqp$5iu$1...@brokaw.wa.com>,
> cro...@kuentos.guam.net (Robato Yao) wrote:
>> >things looked pretty good, lots of new cars, no homeless, Shanghai is
>> >booming its like a wild-west frontier town, My personal opinion is that the
>> >US media wants us to believe simply that someone somewhere is worse off than
>> >we are, but the fact is the US is quickly becoming a second class nation,
>> >
>
>
>Japan seems to be trying to conceal the fact that they now have all of the
>world's personal savings, with these stories about how bad the Japanese
>economy is doing.
It is neither media. Frankly, I think you are in fantasy if you wish to
imagine that the Japanese are very rich or has the world's savings. You
probably don't deal with Japanese much---I have to deal with them
everyday and I even have a few in my employment.
Yesterday I was in our local K-Mart trying to buy some mailers. Two
Japanese girls, tourists, were loudly scrounging over a large basket of
underwear put on clearance sale. Does that act like a couple of
"millionaires" to you?
Rgds,
Chris
>
>-----------== Posted via Deja News, The Discussion Network ==----------
>http://www.dejanews.com/ Search, Read, Discuss, or Start Your Own
JonRuth Aikens
failures comes from the "horizontal keiretsu" where the banks and other
large corporations are interrelated capital-wise (cross-shareholding) and
liability-wise (a major group bank tends to hold loans and deposits of other
"group" corporations). Consequently a bank failure affects everybody. This
aspect says nothing about its effect on foreign investment (Japan is a
target for foreign investment as well as a source of capital for foreign
enterprises)...just a thought.
Also, the value of all the yen that the average family saves is
affected...much of their daily consumption goods are imported...their
ability to comfortably weather a "storm" is relative.
--
DA RECTA NON TOLERUNDUM SUNT
Grinch
> oldn...@mindspring.com wrote:
>> Gary Clark <Ga...@words-that-work.org> wrote:
>>
>> >I have a friend who claims that all the doom and gloom currently being
>> >reported in the world media about the dire state of the Japanese economy
>> >is a bunch of nonsense.
>> >
>> >He claims that the Japanese currently (must) have about US$26 TRILLION
>> >in their Postal Savings accounts, or about one million dollars (on
>> >average) per family.
>>
>> They "must" have, eh?
>>
>> Some sort of "common sense alarm" ought to go off on hearing a claim
<snip>
>
>For reference, please see:
>
>a) Japan Statistical Yearbook, 1998, Statistics Bureau, Management &
>Coordination Agency, Government of Japan, pgs. 458.
Actually the Statisitics Bureau doesn't say that at all, see below.
>b) The Europa World Yearbook...
Let's cut all the secondary references and go to the horse's mouth --
the *source* of the data in every yearbook, etc.: The Bank of Japan.
From the BofJ's Dec. 10, 1997 report on personal savings (using
today's exchange rate)...
Total Personal Savings: $8.71 trillion
Of which: In Banks $2.19 trillion
In Postal Savings $1.98 trillion
Read it yourself.
http://www.boj.or.jp/en/siryo/siryo_f.htm
Now, exchange rate changes like we've seen recently can move the total
number around by some percentage, but this is the scale of the *real*
numbers we are talking about. From the definitive source.
Finis.
>> You don't have to be an economist to refute an absurd number like
>> this. Use common sense. Pick up an almanac and look at the real
>> savings numbers for different countries. If you start adding up the
>> numbers for the major countries you'll soon see that total *world*
>> savings is a little more than $30 trillion.
>
>Please post the title of the Almanac and the page number …
*Any* almanac that reports financial data. Take your pick. Find one
that contradicts the above.
>> Your friend deduces that $26 trillion of this is in Japanese postal
>> savings. Then the Japanese also have savings in pensions, life
>> insurance, the stock market, and cookie jars. So Japanese savings
>> alone exceed total world savings by several trillion?
>>
>> >His analysis is presented below.
>>
>> I wouldn't exactly call it "analysis" when he doesn't seem to have
>> read his own sources. For instance, your friend says...
>>
>> >To confirm that the Japanese still save 24% of their incomes, see
>> >http://www.nri.co.jp/nri/publications/nriqF/96winter/chap02.html
>>
>> And following that link, we read:
>> "As of 1994, the savings rate had already dropped to 12.8 percent..."
>
>You should read this again before concluding that the above 12.8% is correct.
>The article stated the Japanese "on average saved 23.9 percent of their
>annual income between 1980 and 1994".
How disingenuous can you be? It doesn't say that at all.
It says "persons in their 30s through 50s" saved at a 23.9% rate --
persons in their peak earning years, saving for retirement. The
population also includes persons in the teens through their nineties,
and their much lower savings rates *are* counted in the national
figure.
Since you quoted from this publication I assume you deem it reliable
and believable. You should read it. Its title is _Facing Up To
Japan's Impending Fiscal Crisis_. The chapter you are quoting from is
called _ The Savings Rate is Falling_.
When you quote this source as support(!) for your argument that
there's no crisis in Japan and its savings rate is staying high, it
certainly throws doubt on the credibility of all your other source
citations, no matter how long a list you draw up.
<snip>
>This single article is the only evidence I have found that suggests that this
>savings rate in 1994 actually did drop to 12.8%,
Yet *you* cited it.
>and it contradicts all of the
>inputs from people in Japan today, who report that they still save the same as
>they always have.
It doesn't contradict the OECD, http://www.oecd.org. Nor does it
contradict any almanac that reports economic data.
As for Japanese household savings, since you asked for the source of
the numbers I gave, even though I already gave it, I'll give it again:
The Statistics Bureau & Statistics Center, Management and Coordination
Agency, Government of Japan -- the same source you quoted above.
The figures again:
1996 Japanese household savings: $109,000. Liabilities: $41,000. Net
savings: $68,100.
Read it youself.
http://www.stat.go.jp/1611m.htm
Item #16 Household Economy, (4) Average Amount of Savings and
Liabilities of Employees' Households
Computed using the current exchange rate.
>> Note that the above figures are set at the exhange-rate value, *not*
>> at what they would actually buy.
>> The purchasing power parity value of the yen currently is only
>> 64% of its exchange rate value, according to the OECD. That means the
>> $10 trillion of savings that the Japanese have are worth only $6.4
>> trillion in terms of what a dollar buys in the U.S. And the
>> purchasing value of the average Japanese household's net $68,100 in
>> savings is $43,500.
>
>If it stays in the bank, this is irrelevant. If it is spent in the US, it is
>irrelevant. Only if it is spent in Japan, which none of it ever has been,
>would it be relevant.
Huh? No Japanese savings have ever been spent in Japan?
The point is that $1 worth of yen spent in Japan buys goods worth only
64 cents by US standards. So you have to deflate the exchange rate
value of Japanese savings accordingly to get a true picture of their
worth.
<snip>
>>
>> So much for your friend's thesis.
>>
>> I'll just add a few comments below, between snips.
>>
>> >* * * *
>> >
>> >THE JAPANESE ECONOMY
>> >
>> >* Japanese families save 24% of their incomes each year.
>> >* The Japanese "Postal Savings Account" now exceeds $22 Trillion.
>> >* Of the World's Top 52 Commercial Banks, 17 are Japanese, with assets
>> > of $5.6 Trillion.
>>
>> And what number does your friend give for the *liabilities* of these
>> banks?
Still waiting for this number.
<snip>
>> >Japanese Real GDP was $5.9 Trillion in 1997 ...
<snip>
> >>which means
>> >(using the 25% figure) they saved $1,416 Billion in that one year alone.
>>
>> Among many other things, your friend doesn't know that GDP does not
>> equal personal income, so you don't figure personal savings by
>> multiplying GDP by the personal savings rate.
>
>Correct. The problem in Japan is that GDP is calculated much differently
>than it is in the US.
Incorrect. GDP is not the same thing as personal income in the US or
anywhere else. So when you compute total savings by multiplying the
savings rate times GDP, and then multiply the result by 37 years, you
have a *big* problem.
>For example, Japanese receive a year-end bonus, which
>could be half of their salaries. It seems that they do this to avoid
>reporting this as income which applies to GDP. This also deflates the
>savings figures.
Oh, I'm *sure* you've got a source that says salaries aren't included
in national accounts when paid through bonuses. ;-) And that this is
why Japanese companies pay bonuses. ;-)
<snip>
>> > This point must be put in clearer language! The Japanese Nikkei
>> > could DISAPPEAR from the face of the earth, and the average
>> > Japanese family with the average Japanese portfolio of $1 Million
>> > would lose a whopping $2,909 dollars.
>>
>> Aside from what you know now about Japanese household wealth, your
>> friend here is missing the very basic point that Japanese banks,
>> unlike US banks, include stock investments in their capital base.
>> That's the point of the magic 14,000 Nikkei number on Tokyo
>> stock exchange. Under 14,000 Japanese bank capital starts
>> disappearing -- reportedly they have to call in $100 billion in loans
>> for every 1,000 point drop.
>
>What you are overlooking is the fact that the Japanese don't "invest" in the
>stock market. The astounding figure in Reference a) above is that the
>Japanese have only 9 billion (NOT trillion as erroneously reported before)
>yen in stocks and securities.
>
>9 billion yen is $75 Million, which is less than 0.0004% of what they have in
>savings.
>
>Maybe I am reading this wrong? If so, please read it and let me know what
>part I missed.
What you are missing is that the Japanese *do* invest in the stock
market in a big way -- through their postal savings accounts and their
pensions. And every time the Nikkei falls near 14,000, a whole bunch
*more* of postal and pension savings is rushed into the stock market
by the government to push the Nikkei back up again.
Japanese postal savings and pension savings don't go into a big
mattress. They've been directed by the government into the stock
market which has fallen by half, into real estate investments that
have lost an average of 40% of their value, and into the capital of
banks that have over $1 trillion of bad debts and which may be largely
insolvent.
Imagine that the Nikkei starts heading south of 14,000. The big banks
that lose their capital go broke -- *poof* go the postal savings
invested in them. The banks have to call in loans on real estate and
made to big companies -- *poof* go the postal savings invested in
them. The bankruptcies through the money multiplier cause a real
recession that makes the stock market plunge -- *poof* go the postal
savings invested in it. (And pensions go *poof* too.)
Are you beginning to see why the Japanese who have put their money
into postal savings are beginning to worry about how they are going to
get their money out?
> $75 Million is such a low number that I don't even believe
>it,
Good for you. That's the start of economic logic.
Steve Sundberg
>
>Documented sources put Japan's total savings at $12 Trillion, but they have
>been saving 24% of their incomes ever since WWII. There have been some
>exceptions during this time, but that was the AVERAGE. Noting that Japan's
>median income today is $59,000, and noting that there are 58 million Japanese
>workers, suggests that 58 million workers saved last year about $14,160 each,
>which adds up to $821 Billion IN ONE YEAR.
>
>If they have been doing this since 1948, then it looks like their total
>savings probably exceed $20 Trillion.
So you're saying that since 1948 no one in Japan has spent one yen at
all of their savings? Not *one* yen? What's been the average savings
rate in the US during the same time? What would you figure the sum
total of savings to be since 1948?
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woo...@my-dejanews.com
cro...@kuentos.guam.net (Robato Yao) wrote:
> In <702urm$2n2$1...@nnrp1.dejanews.com>, fathersm...@usa.net writes:
> >In article <701jqp$5iu$1...@brokaw.wa.com>,
> > cro...@kuentos.guam.net (Robato Yao) wrote:
> >> >things looked pretty good, lots of new cars, no homeless, Shanghai is
> >> >booming its like a wild-west frontier town, My personal opinion is that
the
> >> >US media wants us to believe simply that someone somewhere is worse off
than
> >> >we are, but the fact is the US is quickly becoming a second class nation,
> >> >
> >
> >
> >Japan seems to be trying to conceal the fact that they now have all of the
> >world's personal savings, with these stories about how bad the Japanese
> >economy is doing.
>
> It is neither media. Frankly, I think you are in fantasy if you wish to
> imagine that the Japanese are very rich or has the world's savings. You
> probably don't deal with Japanese much---I have to deal with them
> everyday and I even have a few in my employment.
>
> Yesterday I was in our local K-Mart trying to buy some mailers. Two
> Japanese girls, tourists, were loudly scrounging over a large basket of
> underwear put on clearance sale. Does that act like a couple of
> "millionaires" to you?
***** Actually, the answer is *yes.* I often deal with some rather wealthy
people--often entrepreneurs--and one thing is striking: rich people LOVE a
good deal!!! Perhaps there is a cause and effect there. The awareness of
what's a good deal and the "value of a dollar" is something that sets then
apart. The converse is also true. Often, poor people are among the
least-educated/aware consumers who may spend money on valueless features,
overpay for a good or service, etc.
If you had actually rubbed shoulders with literal millionaires, you might know
this. (Yeah, some are actually cheap SOBs!!! :)
>
> >
> >-----------== Posted via Deja News, The Discussion Network ==----------
> >http://www.dejanews.com/ Search, Read, Discuss, or Start Your Own
>
> (counting down from top 50 oxymorons...)
> 10. Tight slacks
> 9. Definite maybe
> 8. Pretty ugly
> 7. Twelve-ounce pound cake
> 6. Diet ice cream
> 5. Rap music
> 4. Working vacation
> 3. Exact estimate
> 2. Religious tolerance
> And the NUMBER ONE top oxy-MORON
> 1. Microsoft Works
> ---From the Top 50 Oxymorons (thanks to Richard Kennedy)
>
>
-----------== Posted via Deja News, The Discussion Network ==----------
Robato Yao
>In article <703b5o$db0$1...@brokaw.wa.com>,
> cro...@kuentos.guam.net (Robato Yao) wrote:
>> In <702urm$2n2$1...@nnrp1.dejanews.com>, fathersm...@usa.net writes:
>> >In article <701jqp$5iu$1...@brokaw.wa.com>,
>> > cro...@kuentos.guam.net (Robato Yao) wrote:
>> >> >things looked pretty good, lots of new cars, no homeless, Shanghai is
>> >> >booming its like a wild-west frontier town, My personal opinion is that
>the
>> >> >US media wants us to believe simply that someone somewhere is worse off
>than
>> >> >we are, but the fact is the US is quickly becoming a second class nation,
>> >> >
>> >
>> >
>> >Japan seems to be trying to conceal the fact that they now have all of the
>> >world's personal savings, with these stories about how bad the Japanese
>> >economy is doing.
>>
>> It is neither media. Frankly, I think you are in fantasy if you wish to
>> imagine that the Japanese are very rich or has the world's savings. You
>> probably don't deal with Japanese much---I have to deal with them
>> everyday and I even have a few in my employment.
>>
>> Yesterday I was in our local K-Mart trying to buy some mailers. Two
>> Japanese girls, tourists, were loudly scrounging over a large basket of
>> underwear put on clearance sale. Does that act like a couple of
>> "millionaires" to you?
>
>***** Actually, the answer is *yes.* I often deal with some rather wealthy
>people--often entrepreneurs--and one thing is striking: rich people LOVE a
>good deal!!! Perhaps there is a cause and effect there. The awareness of
They love a good deal on expensive things. They would love to buy a
diamond studded Rolex worth $25,000 at $21,000, but they're not going t
plug for a $200 Casio.
>what's a good deal and the "value of a dollar" is something that sets then
>apart. The converse is also true. Often, poor people are among the
>least-educated/aware consumers who may spend money on valueless features,
>overpay for a good or service, etc.
Not on panties, you don't.
Years ago, to consider "K-mart" would be outrageous. The Japanese wife
of an American businessman (VP of exports of a paint company) told me in
the best way possible what describes (used) to dictate Japanese lady
purchases---"Signature Items".
>
>If you had actually rubbed shoulders with literal millionaires, you might know
>this. (Yeah, some are actually cheap SOBs!!! :)
>
Actually rubbed shoulders with literal millionaires? If you knew my
real background you won't ask me that question,
but this is not the place to discuss my finances. As a clue, that
anecdote on the Rolex is a true experience.
Rgds,
Chris
Matthew Salter
> > Some sort of "common sense alarm" ought to go off on hearing a claim
> > like this. If everybody in Japan is a millionaire that really would
> > be something to talk about. But then why are so many Japanese slaving
> > away in salarymen's jobs?
Most Japanese are millionaires. A full time job paying less than 1
million yen per year is not worth having.
Matthew
Mike Pest-er
>
> In article <703b5o$db0$1...@brokaw.wa.com>,
> cro...@kuentos.guam.net (Robato Yao) wrote:
> > In <702urm$2n2$1...@nnrp1.dejanews.com>, fathersm...@usa.net writes:
> > >In article <701jqp$5iu$1...@brokaw.wa.com>,
> > > cro...@kuentos.guam.net (Robato Yao) wrote:
> > >> >things looked pretty good, lots of new cars, no homeless, Shanghai is
> > >> >booming its like a wild-west frontier town, My personal opinion is that
> the
> > >> >US media wants us to believe simply that someone somewhere is worse off
> than
> > >> >we are, but the fact is the US is quickly becoming a second class nation,
> > >> >
> > >
> > >
> > >Japan seems to be trying to conceal the fact that they now have all of the
> > >world's personal savings, with these stories about how bad the Japanese
> > >economy is doing.
> >
> > It is neither media. Frankly, I think you are in fantasy if you wish to
> > imagine that the Japanese are very rich or has the world's savings. You
> > probably don't deal with Japanese much---I have to deal with them
> > everyday and I even have a few in my employment.
> >
> > Yesterday I was in our local K-Mart trying to buy some mailers. Two
> > Japanese girls, tourists, were loudly scrounging over a large basket of
> > underwear put on clearance sale. Does that act like a couple of
> > "millionaires" to you?
>
> ***** Actually, the answer is *yes.* I often deal with some rather wealthy
> people--often entrepreneurs--and one thing is striking: rich people LOVE a
> good deal!!! Perhaps there is a cause and effect there. The awareness of
> apart. The converse is also true. Often, poor people are among the
> least-educated/aware consumers who may spend money on valueless features,
> overpay for a good or service, etc.
>
> this. (Yeah, some are actually cheap SOBs!!! :)
>
> >
Uh, huh-huh-huh, what does this have to do with Japan? uh-huh-huh...