Professor Elam

Accounting & Investing Info for San Antonio A & M

recent posts

about

Is the Sun Setting on Japan?

Monday March 8 2010

Japan's moniker is the Land of the Rising Sun, no doubt a reference to its island status offshore Asia. But since its stock market top in 1989, the sun has been setting. This article  suggests that debt is about to overwhelm savings and production. Readers will recall this is the same problem the PIGS face in Europe and that CA AZ NY NJ face here, Japan is just getting there faster. A population that is not replacing itself cannot pay off the debt and obligations of the previous generation. 

The basic accounting equation is A = L + OE. The problem is that Assets are getting smaller and the L fails to reflect lots and lots of off balance sheet liabilities for govts around the world. Govt Pensions like social security are example number one. 

Meanwhile France and German have announced some sort of short term rescue for Greece, okay what about Spain Portugal and Ireland, not to mention New Jersey…

Posted in

2 responses to “Is the Sun Setting on Japan?”

  1. Aaron Avalos Avatar
    Aaron Avalos

    I am suprise to read that Japan is in alot more trouble than we are. With Japanese bonds on the verge of losing its value. Mish list a couple of things that wrong with Japan right is becasue their againg popluation, no one is retiring, and the fact that their debt is nearly 200% of their GDP. Japan is headed in a downward spiral that is going to take a mircale of some sort to get them out of the mess.

    Like

    Reply
  2. Dennis Elam Avatar
    Dennis Elam

    Yes and the problems Toyota is having seem to mirror the larger decline. Japan would not write of bad loans as we are not doing now either, a vision of things to come for America, too much debt?

    Like

    Reply

Leave a comment