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Chart of Australia v Japan v USA house price falls from peak; Where is it?
Topic Started: 21 May 2012, 01:28 PM (6,850 Views)
peter fraser
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Dr Watson
23 May 2012, 02:14 PM
The graph Peter linked to indicates their population growth rate peaked around 1960.

Japan has many problems, but key among them is that Mr and Mrs Watabe shunned debt after the bubble burst, despite the ultra-stimulatory policies of the BOJ.

The same thing could happen here.

We have "enjoyed" 100 basis points of reductions since November (leave aside the out-of-cycle increases) and what have we to show for it?

House prices continue to fall.

So what is needed to stabilise the market? Another 50-point cut? Another 100? 200?

When will Australians gleefully resume bidding up the value of their homes again?

We could very well turn Japanese.
Quote:
 
The graph Peter linked to indicates their population growth rate peaked around 1960.


Well population growth over the last half century peaked in the sixties, but prior to WW2 I believe birth rates were higher. From my graph you will have noticed that the growth actually ceased in 2005 and then turned negative.

But that is only part of the story - the population in Japan has been ageing and that means progressively less workers supporting increasingly more aged people who are unable to work.

You seem like an intelligent guy - so have a look at the graphs here and draw your own conclusions - Graphs

Quote:
 
When will Australians gleefully resume bidding up the value of their homes again?


IMHO not for a few years at least, but they will. How long that process takes will depend upon whether any recession is caused by falling home prices, or whether a fall in home prices is caused by a recession. Seriously there is a difference.

Think about that and work it out for yourself.

Cheers...


Any expressed market opinion is my own and is not to be taken as financial advice
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miw
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Dr Watson
23 May 2012, 02:14 PM

Japan has many problems, but key among them is that Mr and Mrs Watabe shunned debt after the bubble burst, despite the ultra-stimulatory policies of the BOJ.

I often wonder if the Japanese consider the state of their economy to be as big a problem as a lot of outsiders seem to do. Could it be that they realised some time ago that their population was peakng and that they should be less worried about GDP than about GDP per capita and maintaining current quality of life.

Right now Japan is still the biggest creditor nation on earth. They have a lot of government debt, but it is at effectively 0% interest rates and it is owed to the Japanese, not to outsiders in the main. Their foreign reserves exceed China's and they have been rising recently.

Population is declining so there is little need to build housing or infrastructure.

In a previous job I used to go to Tokyo on business a lot, and one of my colleagues once said to me "we've been in recession for 14 years but we are used to being in recession. It's the new normal." Certainly people who got laid off from that company in huge numbers when they shut down their operations all seemed to have jobs very quickly, and getting good people is as hard in Japan as anywhere - if not harder. Didn't seem like an economy in recession from that point of view.

Given that it would have been fairly easy at several points to reflate the economy, but instead they seemed almost on purpose to shut down the recovery, I am beginning to wonder...
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
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Doubtful
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miw
23 May 2012, 02:56 PM
Dr Watson
23 May 2012, 02:14 PM

Japan has many problems, but key among them is that Mr and Mrs Watabe shunned debt after the bubble burst, despite the ultra-stimulatory policies of the BOJ.

I often wonder if the Japanese consider the state of their economy to be as big a problem as a lot of outsiders seem to do. Could it be that they realised some time ago that their population was peakng and that they should be less worried about GDP than about GDP per capita and maintaining current quality of life.

Right now Japan is still the biggest creditor nation on earth. They have a lot of government debt, but it is at effectively 0% interest rates and it is owed to the Japanese, not to outsiders in the main. Their foreign reserves exceed China's and they have been rising recently.

Population is declining so there is little need to build housing or infrastructure.

In a previous job I used to go to Tokyo on business a lot, and one of my colleagues once said to me "we've been in recession for 14 years but we are used to being in recession. It's the new normal." Certainly people who got laid off from that company in huge numbers when they shut down their operations all seemed to have jobs very quickly, and getting good people is as hard in Japan as anywhere - if not harder. Didn't seem like an economy in recession from that point of view.

Given that it would have been fairly easy at several points to reflate the economy, but instead they seemed almost on purpose to shut down the recovery, I am beginning to wonder...
Tell me more about this purposeful shutdown. As far as I am aware japan has run massive stimuls programs and a very low interest rate over the last twenty years, with neither measure proving very successful. This is why many are drawing comparisons between the lost decade(s) and current US policy (ZIRP, TARP, QE etc etc)

from http://www.aei.org/article/economics/financial-services/japans-lost-decade-outlook/

As the collapse of equity prices intensified and land prices began to fall, the Bank of Japan reversed course and cut its discount rate rapidly by 275 basis points in the year following June 1991. Subsequent additional cuts of 150 basis points in 1993 brought the discount rate down to 1.75 percent by September 1993. Simultaneously, Japan pursued three major fiscal stimulus packages totaling 6 percent of GDP between August 1992 and September 1993.

The effects on the economy of these extraordinary stimulative measures were limited. Growth recovered only slightly--to just over 1 percent in 1994--for several reasons. First, the Bank of Japan was late to initiate its easing. By the time of the first rate cut in June 1991, Japan's nominal GDP growth, which in the long run should not be allowed to fall below policy interest rates, had dropped to about 2.5 percent, headed down to a negative level by 1994. That level was far below the 6 percent discount rate in place


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miw
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Doubtful
23 May 2012, 03:22 PM
Tell me more about this purposeful shutdown. As far as I am aware japan has run massive stimuls programs and a very low interest rate over the last twenty years, with neither measure proving very successful. This is why many are drawing comparisons between the lost decade(s) and current US policy (ZIRP, TARP, QE etc etc)
I don't purport to be able to get inside the Japanese mind. It's just that we keep reading stuff written about western economists about how bad the Japanese economy is, but I never get to read much about the Japanese view of their economy and the Japanese I have dealt with (who are obviously a very tiny sample) do not seem to be so worried about the economy. Also, at least twice, as the economy has started to recover, the BOJ has raised rates and killed the recovery. In the west it gets called incompetence, but is it?

Also, if Japan's GDP is flat, their GDP per capita rises. They don't need the same rate of growth to keep moving forward as Australia an the US do, and as a resource-poor nation they have an added incentive not to increase consumption of energy and commodities.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
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newjez
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It may be a model that we all have to follow in the not too distant future. An economic model not based on growth.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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peter fraser
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miw
23 May 2012, 02:56 PM
Dr Watson
23 May 2012, 02:14 PM

Japan has many problems, but key among them is that Mr and Mrs Watabe shunned debt after the bubble burst, despite the ultra-stimulatory policies of the BOJ.

I often wonder if the Japanese consider the state of their economy to be as big a problem as a lot of outsiders seem to do. Could it be that they realised some time ago that their population was peakng and that they should be less worried about GDP than about GDP per capita and maintaining current quality of life.

Right now Japan is still the biggest creditor nation on earth. They have a lot of government debt, but it is at effectively 0% interest rates and it is owed to the Japanese, not to outsiders in the main. Their foreign reserves exceed China's and they have been rising recently.

Population is declining so there is little need to build housing or infrastructure.

In a previous job I used to go to Tokyo on business a lot, and one of my colleagues once said to me "we've been in recession for 14 years but we are used to being in recession. It's the new normal." Certainly people who got laid off from that company in huge numbers when they shut down their operations all seemed to have jobs very quickly, and getting good people is as hard in Japan as anywhere - if not harder. Didn't seem like an economy in recession from that point of view.

Given that it would have been fairly easy at several points to reflate the economy, but instead they seemed almost on purpose to shut down the recovery, I am beginning to wonder...
That's a novel way of looking at the situation. I can see that if all is travelling well at the moment they may be tempted to allow the current status quo to continue, especially when there seems to be political fragility at the moment in Japan.

But what will they do when the few are supporting the many as the population pyramid reverses? they aren't having babies fast enough, and they don't like immigration.

There must come a crunch moment.

Any expressed market opinion is my own and is not to be taken as financial advice
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themoops
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peter fraser
23 May 2012, 04:28 PM
But what will they do when the few are supporting the many as the population pyramid reverses? they aren't having babies fast enough, and they don't like immigration.
They'll just get by. They have a spine. All this worry about an aging population is a ponzi scheme as well. They'll probably just means test the pension or can it altogether.

You're just a retard who can't see past growth is good and you live in denial about the fact that growth can't be infinite and some things are priceless, like being able to get to fucking work in under an hour.

Nationalising some things like bread, milk and a few other staples and selling them at cost would be a good idea. To feed the old farts, and the bulls when they go tits up. :lol
Edited by themoops, 23 May 2012, 04:59 PM.
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Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments.
Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck!
See here
Property will be 50-70% off by 2016.
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peter fraser
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themoops
23 May 2012, 04:57 PM
They'll just get by. They have a spine. All this worry about an aging population is a ponzi scheme as well. They'll probably just means test the pension or can it altogether.

You're just a retard who can't see past growth is good and you live in denial about the fact that growth can't be infinite and some things are priceless, like being able to get to fucking work in under an hour.

Nationalising some things like bread, milk and a few other staples and selling them at cost would be a good idea. To feed the old farts, and the bulls when they go tits up. :lol
They'll just get by. They have a spine. All this worry about an aging population is a ponzi scheme as well. They'll probably just means test the pension or can it altogether.

Really I don't care what they do in Japan, I was interested in an opinion by miw.

You're just a retard who can't see past growth is good and you live in denial about the fact that growth can't be infinite and some things are priceless, like being able to get to fucking work in under an hour.

Your capacity to get to work in under one hour is the last thing on my mind, it's up to you to organise your life to the maximum advantage to you, it's just not my responsibility. Growth can't be infinite? - why not? Your statement makes no sense.

Nationalising some things like bread, milk and a few other staples and selling them at cost would be a good idea. To feed the old farts, and the bulls when they go tits up. :lol

They have tried price control on bread and milk in this country and it didn't work. Surely you knew that?

Apart from mindless trolling, what do you have?


Any expressed market opinion is my own and is not to be taken as financial advice
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Andrew Judd
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miw
23 May 2012, 02:56 PM
I often wonder if the Japanese consider the state of their economy to be as big a problem as a lot of outsiders seem to do. Could it be that they realised some time ago that their population was peakng and that they should be less worried about GDP than about GDP per capita and maintaining current quality of life.

Right now Japan is still the biggest creditor nation on earth. They have a lot of government debt, but it is at effectively 0% interest rates and it is owed to the Japanese, not to outsiders in the main. Their foreign reserves exceed China's and they have been rising recently.

Population is declining so there is little need to build housing or infrastructure.

In a previous job I used to go to Tokyo on business a lot, and one of my colleagues once said to me "we've been in recession for 14 years but we are used to being in recession. It's the new normal." Certainly people who got laid off from that company in huge numbers when they shut down their operations all seemed to have jobs very quickly, and getting good people is as hard in Japan as anywhere - if not harder. Didn't seem like an economy in recession from that point of view.

Given that it would have been fairly easy at several points to reflate the economy, but instead they seemed almost on purpose to shut down the recovery, I am beginning to wonder...
You might want to check out the views of professor richard Werner who was once an advisor to the bank of Japan and told them back in the 1990's a more agressive reflation policy would be needed to prevent deflation. His view is that at least one Bank of Japan governor was undemocratically restructuring the inefficient Japanese economy via a deliberate deflationary monetary policy.

At one time he was working for Jardine Fleming but is now a UK university professor and reasonably outspoken monetary policy critic.

He has also written a best selling book in Japan available in English

http://en.wikipedia.org/wiki/Richard_Werner

Werner's book Princes of the Yen was a number one general bestseller in Japan in 2001 [4] The book covers the monetary policy of the Bank of Japan specifically and central bank informal guidance of bank credit in general.[5]
Edited by Andrew Judd, 23 May 2012, 05:27 PM.
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miw
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Andrew Judd
23 May 2012, 05:19 PM
You might want to check out the views of professor richard Werner who was once an advisor to the bank of Japan and told them back in the 1990's a more agressive reflation policy would be needed to prevent deflation. His view is that at least one Bank of Japan governor was undemocratically restructuring the inefficient Japanese economy via a deliberate deflationary monetary policy.

That would fit in with other things I am reading about disagreement between the BOJ and the government and moves to limit the independence of the BOJ.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
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