The Japanese Yen is About to Crash
Japan has the second lowest birth rate in the industrial world.
Another problem is that their life expectancy rate is rising.
The elderly are quickly becoming the largest segment of Japan's population.
20 percent of Japan's population is now over 65 years old while here in the U.
S.
the 65 and older crowd constitutes only 12 percent.
Not an insignificant number by any standard but when you compare the population size between the two, Japan's 20 percent is a startling figure.
The low birthrate means a smaller workforce and smaller tax base.
As the economy contracts, businesses pay less taxes.
Their aging society consume social security, health care and pension benefits.
These are costs paid out directly by the government in legacy entitlements.
Japan's recession began 20 years ago.
Since that time, the government has poured trillions into their banking system in bailouts and economic stimulus.
This month the government will give every citizen a check for 12,000 yen (approx.
$120) in another misguided attempt to stimulate the economy.
Another $20 billion down the drain.
Japan has managed to produce the world's most debilitating debt and budget deficit.
Japan owes $7.
8 trillion to it's creditors ($157,000 per person) and expects to borrow an additional $1.
1 trillion to stay solvent.
Government debt to GDP is the ratio used to compare a nations indebtedness.
In the UK, the debt to GDP ratio is 48 percent.
The U.
S.
has a debt to GDP of 75 percent.
Japan has a debt to GDP ratio of 187 percent and will increase to 217 percent by the end of 2009.
Japan's economy is in shambles.
They have almost an entirely export-based economy which has been severely depressed with the global recession and deleveraging.
In the past six months of this year Japan has lost $250 billion dollars from declining exports, their first trade deficit in 12 years.
With every 1 percent increase in the value of the yen it loses $400 billion in export revenue.
It has no other alternative except a wholesale devaluation of it's currency.
It has become clear that the Japanese government will never be able to pay back the money it owes.
Another problem is that their life expectancy rate is rising.
The elderly are quickly becoming the largest segment of Japan's population.
20 percent of Japan's population is now over 65 years old while here in the U.
S.
the 65 and older crowd constitutes only 12 percent.
Not an insignificant number by any standard but when you compare the population size between the two, Japan's 20 percent is a startling figure.
The low birthrate means a smaller workforce and smaller tax base.
As the economy contracts, businesses pay less taxes.
Their aging society consume social security, health care and pension benefits.
These are costs paid out directly by the government in legacy entitlements.
Japan's recession began 20 years ago.
Since that time, the government has poured trillions into their banking system in bailouts and economic stimulus.
This month the government will give every citizen a check for 12,000 yen (approx.
$120) in another misguided attempt to stimulate the economy.
Another $20 billion down the drain.
Japan has managed to produce the world's most debilitating debt and budget deficit.
Japan owes $7.
8 trillion to it's creditors ($157,000 per person) and expects to borrow an additional $1.
1 trillion to stay solvent.
Government debt to GDP is the ratio used to compare a nations indebtedness.
In the UK, the debt to GDP ratio is 48 percent.
The U.
S.
has a debt to GDP of 75 percent.
Japan has a debt to GDP ratio of 187 percent and will increase to 217 percent by the end of 2009.
Japan's economy is in shambles.
They have almost an entirely export-based economy which has been severely depressed with the global recession and deleveraging.
In the past six months of this year Japan has lost $250 billion dollars from declining exports, their first trade deficit in 12 years.
With every 1 percent increase in the value of the yen it loses $400 billion in export revenue.
It has no other alternative except a wholesale devaluation of it's currency.
It has become clear that the Japanese government will never be able to pay back the money it owes.
