The only thing I find seems to justify constantly expanding credit is constantly expanding population. Although I'm sure credit creation is far out pacing population growth. Once again where back to the Japanese where population is in decline. I guess that's the Australian story- ever expanding population growth = ever expanding gdp..until were full like Japan.
The only problem with that relationship is that it was well known in the 80s and before than the Japanese population could be in the current state it's in. Didn't prevent the bubble. So no, the idea that perpetually expanding debt is associated with population growth is not some kind of empirically proven condition is tenuous at best.
The only problem with that relationship is that it was well known in the 80s and before than the Japanese population could be in the current state it's in. Didn't prevent the bubble. So no, the idea that perpetually expanding debt is associated with population growth is not some kind of empirically proven condition is tenuous at best.
Each individual needs their fair share of commodities and resources to to sustain themselves. In turn have no choice but to offer services or contribute to the production of goods for example in order to obtain funds to sustain themselves. Each individual can also sustain a certain level of debt. So if you increase the amount of individuals you have most likely increased the size of the economy. You can of course increase the size of the economy without increasing population. That is only possible if individuals increase their consumption .that's increase. So that's most likely why the Japanese economy can't grow any longer. They have probably reached the limits of individual consumption and production. Increasing economic growth via population I think is the terrible path Australia is on. More people puts downward pressure on wages and upward pressure on assets making individuals worse off. The Japanese seem smart enough to avoid this path.
The only problem with that relationship is that it was well known in the 80s and before than the Japanese population could be in the current state it's in. Didn't prevent the bubble. So no, the idea that perpetually expanding debt is associated with population growth is not some kind of empirically proven condition is tenuous at best.
Here's a good paper on the Japanese experience from the Bank of Japan.
Abstract This paper reviews the implications of asset price fluctuations for financial and macroeconomic stability, based on Japan’s experience of the asset price bubble. That experience was characterised by euphoria, that is, excessively optimistic expectations with respect to future economic fundamentals, which lasted for several years before dissipating.
Each individual needs their fair share of commodities and resources to to sustain themselves. In turn have no choice but to offer services or contribute to the production of goods for example in order to obtain funds to sustain themselves. Each individual can also sustain a certain level of debt. So if you increase the amount of individuals you have most likely increased the size of the economy. You can of course increase the size of the economy without increasing population. That is only possible if individuals increase their consumption .that's increase. So that's most likely why the Japanese economy can't grow any longer. They have probably reached the limits of individual consumption and production. Increasing economic growth via population I think is the terrible path Australia is on. More people puts downward pressure on wages and upward pressure on assets making individuals worse off. The Japanese seem smart enough to avoid this path.
The falling and ageing population in Japan make it a special case. Probably at the end of this century some other nations will be in a similar position, but not a growing nation like Australia. We are a long way off being full/
Take risks - if you win you will become wealthy, if you lose you will become wise
Sorry mate I only got 5 pages in .I don't understand why you guys keep drawing attention to the tech boom in Japan? All my comments we're in regards to Japan's current situation in which they are faced with an ageing and declining population resulting in frequent contractions in gdp (just my theory ).the piece you linked me to seems to go into great depths to explain the cycle of an asset bubble which are all obvious. Thanks anyway but I enjoy watching it live - The Australian housing market!
Rufus
6 Jan 2017, 09:49 AM
The falling and ageing population in Japan make it a special case. Probably at the end of this century some other nations will be in a similar position, but not a growing nation like Australia. We are a long way off being full/
Yes we are. I guess the major problem with our population ponzi is thatunless you continue at the current % it will become less effective. Australia could be so much smarter by growing industries instead of population. Dick smith I think has a point. Grow the size of the pie instead instead of cutting it into smaller pieces
Sorry mate I only got 5 pages in .I don't understand why you guys keep drawing attention to the tech boom in Japan? All my comments we're in regards to Japan's current situation in which they are faced with an ageing and declining population resulting in frequent contractions in gdp (just my theory ).the piece you linked me to seems to go into great depths to explain the cycle of an asset bubble which are all obvious. Thanks anyway but I enjoy watching it live - The Australian housing market! Yes we are. I guess the major problem with our population ponzi is thatunless you continue at the current % it will become less effective. Australia could be so much smarter by growing industries instead of population. Dick smith I think has a point. Grow the size of the pie instead instead of cutting it into smaller pieces
Read the document and look at the key factors that lead to the Housing Bubble.
The central argument of this paper is that variation in the performance of the financial system across the two depressions was primarily due to variation in the condition of the financial system prior to each depression. We show this by examining the behaviour of a range of indicators of financial stability over the decade prior to each depression.4 These indicators are: (i) the level and nature of investment; (ii) property market speculation; (iii) credit growth; (iv) capital inflows; (v) degree of risk management within the financial system; and (vi) competitive pressures in the financial sector
Sorry mate I only got 5 pages in .I don't understand why you guys keep drawing attention to the tech boom in Japan? All my comments we're in regards to Japan's current situation in which they are faced with an ageing and declining population resulting in frequent contractions in gdp (just my theory ).the piece you linked me to seems to go into great depths to explain the cycle of an asset bubble which are all obvious. Thanks anyway but I enjoy watching it live - The Australian housing market! Yes we are. I guess the major problem with our population ponzi is thatunless you continue at the current % it will become less effective. Australia could be so much smarter by growing industries instead of population. Dick smith I think has a point. Grow the size of the pie instead instead of cutting it into smaller pieces
It really doesn't matter where you stand politically on this issue, what matters is what will happen. So what do you expect to happen - immigration or no immigration. That's the question.
Take risks - if you win you will become wealthy, if you lose you will become wise
It really doesn't matter where you stand politically on this issue, what matters is what will happen. So what do you expect to happen - immigration or no immigration. That's the question.
Immigration does not necessarily prevent bubbles nor does it have any direct relationship to debt or debt deflation. In Japan's case, both happened without immigration.
Immigration does not necessarily prevent bubbles nor does it have any direct relationship to debt or debt deflation. In Japan's case, both happened without immigration.
Quote:
both happened without immigration
Terry, that's the point. thank you for highlighting it.
Take risks - if you win you will become wealthy, if you lose you will become wise
Immigration does not necessarily prevent bubbles nor does it have any direct relationship to debt or debt deflation. In Japan's case, both happened without immigration.
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