I lived for 5 years or so in China and some years in Korea and Japan (and US). I am European.
I believe this piece is total non sense.
Japan is not what it used to be because they are getting older and older and because they have accumulated so much debt, but their products are as good as ever.
The country is extremely depressed if you talk with the people living there. With Abenomics and all the financial repression people get poorer every day. Their savings evaporate, future is dark.
On the other side, China economic boom made poor people feel great about the future. You could sense optimism whenever you were.
But in my opinion, China was(and is) a big bubble. Smart money wants to get out of China as soon as they can and need a greater fool to buy their investments. Smart money controls Bloomberg like a Puppeteer a puppet.
>With Abenomics and all the financial repression people get poorer every day. Their savings evaporate, future is dark.
Despite the 40% or so depreciation of the yen over the past 3 years, actual cost of living has only gone up something like 5 %. And a lot of that was due to the recent sales tax increase from 5% to 8% (supposedly)
Say what you will about QE, but the depreciation of the Yen basically stopped Sony and others from going completely insolvent. Dropping the value of the yen sucks a lot for things like travelling (and hey, now I have less money in absolute terms), but there was a very scary future in store if the yen kept its insanely overvalued position.
Anyways, this article is a bit of a stretch. There is the airbag thing which is terrible, but comparing Sony to Apple is comparing one extreme to another. There's some opportunities for Japanese companies, but I don't see how it's related to quality concerns.
The real problem with what's happening to the Yen, is that it hasn't even begun to scratch the surface of alleviating their problem: debt.
It's that debt that leaves their budget a disaster, requiring so much of it just for the interest on the debt. It's that debt that has robbed Japan of growth for so many years.
For preliminary 2015 figures on GDP per capita, they've crashed down to #24 thanks to the erosion of the value of the Yen - to $32,000 or so. That puts them below Israel and New Zealand, countries they towered over for decades on that metric. By comparison South Korea is at $27k and Spain is at $26k; at the present rate of Yen destruction (which is to say if they continue with their failed currency debasement attempt to inflate away their debt) it won't be more than a couple of years before Japan falls below that line. Next up after that is Taiwan at $22,000 per capita - another lost decade filled with debacles like Abenomics will get them down to that level. There's only so much you can erode before it begins to unravel the standard of living Japan has enjoyed for decades.
At one time their economy was a force to be reckoned with. Now it's a mere 22% the size of the US economy and shrinking. They had caught up to the US in GDP per capita in 1987. Soon the US is going to be at double their GDP per capita number. How will Japan be able to afford the care of their elderly, their debt service, the cost of infrastructure, the capital needed to invest into the future (R&D, science, et al.)? At this rate, they won't.
How is public debt the problem? If something, Japan case show that debt in your own money is not the problem.
Japan economy suffers from low spending and specially low investment. That could be because the private sector is deleveraging of because the private sector just don't see profits investing in japan. Are not the main Japanese companies opening factories in China and other countries?
> Smart money controls Bloomberg like a Puppeteer a puppet.
I don't know much about Bloomberg -- is there evidence out there that backs up this sentiment or is it just derived from a sort of "the-powerful-are-all-in-cohoots" cynicism?
I believe this piece is total non sense.
Japan is not what it used to be because they are getting older and older and because they have accumulated so much debt, but their products are as good as ever.
The country is extremely depressed if you talk with the people living there. With Abenomics and all the financial repression people get poorer every day. Their savings evaporate, future is dark.
On the other side, China economic boom made poor people feel great about the future. You could sense optimism whenever you were.
But in my opinion, China was(and is) a big bubble. Smart money wants to get out of China as soon as they can and need a greater fool to buy their investments. Smart money controls Bloomberg like a Puppeteer a puppet.