Kasz216 said:
Mr Khan said:
kowenicki said:
Train wreck said:
want to, Guess I'm talking about the world low rate environment we are in.
By leaving interest rates in most of the developed world at record lows, its pretty much worthless to save your money so you are left to spend it or invest it. The Japanese tried this experiment first after their market and property bubble crashed in 1989 and they have yet to recover, wondering why other governments of the world are thinking this time around will be different. |
it isnt an experiment, they need to and they also want to... interest rates have to be low and if a bi-product of that is that people go out and spend they will be very happy too.
The reasons for Japanese long term low interest rates are different to the global (western) situation now.
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Right, the problem with Japanese low interest rates is because savings is too high, period, but that there needs to be some sort of cultural change to encourage spending (or stronger pension programs/elimination of mandatory retirement ages. Japanese save so much because they live forever but have to retire earlier than most).
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Less high then you'd think lately... because the old people are spending their retirements and there aren't enough young people to counterbalance it by saving.
Which is problematic since it might shrink Japan's debt market.
Which means they have to go overseas.
Which means they need to go to outside creditors....
which means higher interest rates and well.... nothing good from there.
Japan really needs to cut it's budget and get corruption under control.
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Japan's got a lot of problems that stem from the fact that their politics moves like molasses. Took them decades to get the birth control pill approved, for instance.
