For the longest time, I didn't even approach economics, because from a distance, it seemed so complicated. Ben's explanations are absolutely incredible, and I find that his approach is genuinely very eye-opening to the lies that are spread by mainstream economists.
Japan imports 62% of its food(25% of that from the US), to say the Japanese worker isn't feeling the inflation on food is bogus, they are feeling it acutely!
The Ponzi part of this debt exportation is because the USA spends all of its money on things that don't help its economy and then takes on all of the private debt of our economy and then sells that same debt back to the very people who got themselves in deadly debt in the first place, so THEY make money for getting into such debt in the first place.
The USA does not export debt, it issues Treasuries which anyone is free to buy, many Americans bought the awesome I Bonds. Every country in the world does the same too, no different than the USA.
@@drscopeifyit's not the same. The world doesn't use their own individual currencies as international reserve currency. It uses the US dollars as a reserve currency. Central Banks around the world inevitably have US dollars buildup in their economies if they are surplus payment economies and have nothing to do but buy US Treasury bills, which essentially funds US debt. If they don't, the US dollar will eventually start to fall against their own currencies, and make the Treasury bills they already own worth less, it makes the debt of other countries denominated in US dollars harder to pay off, and it makes their own exports less competitive while making US exports, or the exports of US owned companies more competitive against their own. It forces payment surplus countries to inevitably buy US government debt, trade in US dollars, and countries with payment deficits denominated in US debt through the IMF and World Bank, need to contribute to this international monetary system to try and keep the US dollar stable if they ever hope to pay off their IMF/WB debt denominated in US dollars.
@@Shadowless_KickI think that depends on the personality of the person. To try something that’s not natural to you would sound incongruent. He’s discussing serious topics, so not every listener would expect him to be humorous, imho. He needs to be true to himself.
too true. Money exists in the imagination. It's a fantasy world where Lawyers and Accountants live. Products and resources exist in objective physical reality where Engineers and Farmers live.
@@mijmijrm Indeed. That's why China's been buying US farmlands and businesses. Otherwise, what are they suppose to use those dollars for? non existent American TVs? Movies and subscriptions only reach to a point. And I certainly am not interested in photoshop subscription models. Next thing you know we'll be paying Steam subscription instead of the digital games we bought, which in itself is dubious.
This is the second time Japan has suffered economically for being the vassal state of the US. The first was in 1985 when it was asked to sign the Plaza Accord in which the yen was made to appreciate against the US dollar which led to the Japanese asset price bubble which lasted for at least a decade. Japan was on course to become the largest economy in the world when it was asked to sign the Plaza Accord. Recently, Germany overtook Japan as the third largest economy.
So true, the USA being the bully of the world and fearful of Japan during the 80s , becoming the biggest economy in the world, now USA is giving China the same treatment
Please don't say that the US is bullying Japan; we live in America, much more miserable than the Japanese. We have to spend a lot of energy to have a place to sleep and something to eat. The Japanese only buy necessary materials, while we have to buy finished products. You should say that the market managers in New York are not really Americans, who don't work by hand to make anything but earn the benefit of money moving, and they are borderless people.
The Plaza Accords did NOT cause the "asset bubble": the accord caused japanese exports to fall significantly. As a result, the Bank of Japan slashed interest rates to TRY to stimulate domestic spending. BUT, the japanese being the japanese took their savings out of low interest bearing accounts and parked it into stocks and property. This caused stocks and property valuations were already at speculative levels but the japanese public demand sent that into the bubble level as we saw the Nikkei index go into imaginary levels and properties across Japan go to levels worse than what happened in the US in 2007-08.
For short term, weak Japanese Yen may not have direct impact to average citizens. However, as Ben mentioned, Japan relies so much on import for food, energy and raw materials, long term it will drive up inflation w/o a doubt. So, I am not as optimistic as Ben saying ordinary citizens in Japan will be just fine. Both Japan government and BOJ has been mis-managing the balance-sheets for decades. The debt level is so high that they can only allow Yen to continuously depreciate. They don't have an option to raise the interest rate to slowdown the depreciation. In the end, this is just a way to take away wealth from citizens.
Seems like Japan's 1.1 trillion dollars in US treasury bonds would go a long way to at least mitigate the yen issue. But as Ben mentioned, the US seems to have told Japan's government to not do this, as it would drive up US inflation and government interest costs even more at an inopportune moment for the US. (Incidentally, the UK is doing the same as Japan, I believe.) I have been thinking that Japan's government may have agreed to keep propping up the US government's finances this way at least until November, when the US elections get done. Maybe then Japan will do what seems economically sensible and starts decreasing its US treasury bond holdings instead of just keeping buying more and more like now. In that case, whoever gets elected in November in the US might have to start (finally) enacting significant measures to decrease US federal deficit spending from 2025 onwards.
I'd imagine it's probably no different from how IL controls the US via AIPAC. If you secretly pay corrupt politicians enough money, they'll do whatever you ask them to do.
I'd imagine it's probably no different from how Izzreal controls the US via A.I.P.A.C. If you secretly pay corrupt politicians enough money, they'll do whatever you ask them to do.
I'd imagine it's probably no different from how Izzreal controls the US via APAC. If you secretly pay corrupt politicians enough money, they'll do whatever you ask them to do.
My comment keeps getting deleted by the UA-cam asshats. But all I was trying to say (without comment getting deleted this time) is that money corrupts. Just look at how Izzreal has the US by the balls.
Jesse Ventura, “When the government lies, the truth becomes a traitor.” US GDP records drug deals and other criminal activities as productive economic activity. White collar crime including wage theft, fraud, and service charge greed are also recorded as positive GDP activity. The same can be said about disaster relief, business subsidies and regulatory capture to evade paying the costs of business. And the largest nominal GDP flummery is Defence spending that only destroys and never produces constructive economic activity. GDP needs to strip out military, police, and justice spending, along with disaster relief, and business subsidies. Health care costs above average should also be stripped out of constructive GDP measures. Japanese currency devaluations may be due to forward depreciation of Japan's US currency holdings. Japan's access to a failing US market is also a fading asset. Lactantius, (late 3rd century) (The Divine Institutes): “In order to enslave the many, the greedy began to appropriate and accumulate the necessities of life and keep them tightly closed up, so that they might keep these bounties for themselves. They did this not for humanity’s sake (which was not in them at all), but to rake up all things as products of their greed and avarice. In the name of justice they made unfair and unjust laws to sanction their thefts and avarice against the power of the multitude. In this way they availed as much by authority as by strength of arms or overt evil.”
Agree that GDP and currency are not the only indicator of economy. But the Japanese industrial strength is also facing severe challenges. Auto industries is Japan's top employment sect which is being crushed by the EV revolution.
I agree. However its industrial potential is still marvelous. One good thing of Japanese policymakers is its ability to look ahead; this doesn't always occurs perfectly but significantly enough to help them to survive...and thrive. They have been industrial pioneers in contemporary sectors such as robotics and hybrid cars (which partially explain why do they lost the EV train), And now they decided to enter the world of green hydrogen, and they are going to probably succeed. The things is, they engage in things quietly, and work on them consistently, for decades until they get results. I believe they are going to be fine, particularly if they find a sustainable Modus Vivendi with China.
@@yohaneschristianp the problem is it might eat into the market share of their own ICE vehicles which is currently their cash cow. that is why their legacy carmakers are reluctant to go full steam ahead into EV manufacturing. Chinese EV makers are different because they are fresh and don't have their own ICE brand to worry about. For them EV is all or nothing. It's possible to start up brand new Japanese EV companies instead of relying on the traditional Japanese car companies but then these start ups would have to compete against the legacy ICE companies like Toyota, Honda etc in Japan first. That means somebody has to lose out in the domestic market. Japanese automakers are caught in two minds, should they slowly atrophy as other EVs take over their market share or should they risk killing their present ICE cash cow at the expense of tackling the foreign EV challenge head on. It's like the trapeze performer who is thinking of grabbing on the next swing but is reluctant to let go of the swing he is holding tightly to. The Toyota CEO recently just said that the ICE still has a future and EV's are 'failures'. It show their mentality and disdain going into EV.
USA exporting its economic problems? .. Israel may have the most moral army in the world, but USA has the most moral economic policy in the world. /snark .. in case it's not obvious
The U.S. economy is in bad shape because printing too much money causes inflation, so it has to raise interest rates to suppress inflation. The interest rates are too high, and banks cannot handle them by closing down their businesses. Companies are also unable to borrow money for investment and operations because the interest rates are too high. Companies are not doing well. Just lay people off. Laying off too many people will cause social problems such as social crime and homelessness. However, interest rates cannot be lowered because lowering interest rates will intensify inflation. Not to mention printing too much money and accumulating a national debt that cannot be repaid. This is an endless loop. . .
@@heaven9378 Simple, stop the money printing and cut down spending. It will take time to let the inflation down. But we all know that politicians will never do that.
Inflation can wipe out national and private debt, as long as you stop increasing it. As you cannot get something for nothing, the actual wealth to pay off the debt comes from the non asset owning population who will see a reduction in living standards.
Its a client regime of the US- most of the world is, unilateral hegemony, but its failing under its moral deficit. Russia has stood up and China fights with her!
No, the US Dollar value became too high so the Plaza tried to fix that, this did not damage Japan in fact it may have been one of the reasons for the large rise in the Japanese economy and the large bubble the formed, then later it collapsed but that was long after. If the Plaza accord did anything to Japan it was to boost the economy too much not damage Japan.
According to the IMF, China became the largest economy in the world in 2014 on Parity Purchasing Power measure, and is the increasingly larger economy by far. China grows 3 times the rate of the US even in nominal term every year for more than 20 years. Just because the US $ is the world reserve currency its strength is distorting statistics. China's manufacturing capacity is now bigger than that of the US and Europe combined. This fact is universally acknowledged. In terms of GDP, the US relies on expensive services sector. Its production of tangible goods is relatively small. China is the factory for the world. When US companies import from China they sell in the US at a healthy profit margin. The revenue is counted as part of the GDP, while on the other hand in China the export is lower in value of the same goods and this lower value is accounted for in China's GDP. So you have two different sets of data of the same goods. Anyway, this just illustrates how much more powerful China is as a producer. 122 countries in the world count China as their largest trading partner. Because of geopolitics the US has sacrificed its allies by asking them or forcing them to ban the sale of certain products to China. But where can they sell their "unsold" products to? No one. So they make less profit, lay off staff and reduce R&D. It is a downward spiral for them. They have found out to their pain after following the order from US for a couple of years that their source of revenue is dwindling whilst China invests heavily to make their own to become self sufficient. When relationship is repaired China does not want to buy those goods and machines from those US allies because China could now produce them themselves. This is the reality. Pawns are always sacrificed in a chess game.
You say it to make the listener think that pro-American countries are pawns to be sacrificed, but the Japanese are especially not led that easily. Americans may have been innocent before China, but Japan was not. With every gesture or every half-word of the Chinese, the Japanese know all the Chinese thoughts. You mentioned China's exports for a long time, but don't they also export products of Japan and Western? How long did Huaway or BYD debute? Japan cannot sell a lot to the Chinese. To conclude, keep your word until Huaway and BYD are made in Japan, then you can say anything that is right.
PPP is very misleading as it is using market price comparison which means that a country such as China that does major currency manipulation has data that is heavily distorted. If China's Yuan was let to freely float without guidance it would rise dramatically and caused industry and export to collapse, so PPP is seriously misleading as it stand on a foundation of false reality.
When energy prices rise, cost of living increases. This is why the Yen to Dollar ratio is important. Japan is not in BRICS. They cannot get cheap Russian oil. Being a US vassal has consequences.
@apostolostvable Those bases patrol the waters that make sure globalization and world wide trade can happen. Do you think that's a benefit to countries that import most of their necessities?
@jsyo9639 an asinine comment. Suppress who? The world has never been this prosperous, never. Never this kind of sustained peace. If you want universal equality, you're in the wrong universe. After WW2 every other country on Earth would have colonized half the planet, America didn't do that. Instead it ushered in the greatest era of growth and stabilization in human history!!
So basically Japan is the canary in the coal mine, it is slowly painting itself into a huge corner (debt), interest rates rise its screwed and endless QE is unsustainable, it cannot buy its own debt indefinitely either.
The U.S. killed the Japanese export based economy with the Plaza Accords by raising the price of Japanese labor (work added) for exports by 4x. Flip side was they went touring round the world on the cheap. Maybe now the Legendary Japanese Industrial Machine can ramp up once again if the yen hits ~350/450ish. Handmake your premium cars and watches again you Japanese dudes. I'd buy them for their quality knowing your culture of dedicating your entire clan to a craft. P.S. I'm sure there's some symbiosis possible somewhere where the Japanese produce ultra high end industrial products for Chinese Industry. Kinda like the Germans making perfectly flat mirrors for the Dutch to make those UV chip machines.
A weak currency can be good, if you produce products and services that can be exported. Its BAD when the only thing propping up your currency is it being used by most of the world.
Your channel is absolutely incredible. There is so much value here and its not plagued by the sponsors ad nonsense. Thank you, and I look forward to all your content!
`!!!!!!` nations are sick of imported inflation again and again (because of U$$D Over-Printing), disrupting their economic growth... while us enjoy their spending spree without feeling guilty/shame for the world... world-wide de-dollarization is inevitable and imminent, or is it?
Generally I get lost when people start speaking numbers but when Ben Norton does it, everything is clear. You're a great teacher Ben-economics or Norton-omics and it impacts geopolitically, it's all accurate just like that episode about Argentina. Thanks
Not only Japan, all those partners or vassals will face the same consequences as US main concern is to benefit it at the cost of others. This is geopolitics.
In my home country Brazil unfortunately the decrease of value of the national currency in comparison to the dollar (around 250% fall during Bolsonaro government) did meant a severe social economical crisis to our people since, differently than Japan, we were never allowed to have an industry in the international economical order. Worse than that, all the state money on agriculture goes to the big export monocultures so even the food, produce it by small agriculture more and more isolated, also got way more expensive with this crisis.
Thank You so much explaining the PPP. This makes perfect sense in relatable terms. I’m concerned about the value of our currency. If we’re just printing currency, then if it has no value, then we’re just shoveling paper around. And what difference will a bitcoin be if the currency has little to no value?!
Seems like average prices have gone up around 70% higher since covid here in Japan. People living here are in crisis, trying to make ends meet, taking every opportunity to scrimp and save.
I love the way this channel presents its information about the National Debt of both Japan and the USA and how neither country wants the status quo to change. But change is coming as it always does. And you either put yourself in a position to withstand the change or get washed away from it. I am trying to learn economics on my own so channels like this are vital for me.
Ben, a very nice presentation and agree with most of your points. Problem of Japan this time is that following Yan depreciation against the USD, export of Japan has not grown. And this brings back your point that the US government deficit is funded by Japan, or Japan is now harvested by the US,. Question is why Japan is happy to do so.
@@alexanderivkin7086 Nonsense Japan is free to do anything it wants in fact Japan had a free election in 1946 just 1 year after WW2 ended and they avoided Vietnam war and also later had a major major trade war with the USA in the 1970s and 80s with the USA banning many Japanese imports and Japan banning America imports as well. A proper trade war. Japan is not a vassal of the USA at all in fact the 2 had a very bad relations for a long time. Today with the threat of war with China the two countries are very close once again for obvious reasons. This is a failed strategy by China with their threats and wolf warrior policies it makes the world hate China but that's just failed policy by China
Like a kind of open university lecture on government accounts and exchange economics. Excellent work Ben… you are helping to educate people in the void that they usually face online and indeed in most universities. Glad you warned people away from certain other commentators like a certain Columbia University political science professor.
Nonsense Japan had a free and fair election in 1946 only 1 year after the war was over Japan already had a totally free and democratic election and a new government formed. Relations between the USA and Japan were not good in the 1950s-1990s due to many issues like lack of support of war in Korea and the later trade wars in the 1980s but slowly relations have become very strong due to the fear of war with China.
@11:50m: "... and the US government has a federal debt of 122% of GDP that has to be funded somehow.." It will be funded the same way as all Federal spending is funded - the US congress will pass a money bill authorising the requisite new spending. No question of 'debt' sustainability exists. When the 'debt' currently on issue matures the principal will simply be paid out. From the Fed. Resv's point of view, the bond holders cash will be moved from an interest earning investment account to a non interest earning cash account. @ 12m "...one of the main countries that is actually funding this US government deficit is Japan..." That is Japan's problem, not the US's problem. Japan is not funding the US deficit - it is parking its excess USD reserves in an interest earning account at the Fed rather than leaves those USD funds in a US bank cash account earning zero interest. Same goes for China's excess resvs. Both China & Japan have accumulated USD reserves due to running trade surpluses against the US. US bond issuance is a monetary operation (not fiscal !) to regulate the daily cash (interest) rate - it is in fact operationally optional - the same interest rate control could be achieved by paying banks interest on excess reserves. The US national 'debt' is only unsustainable in the sense that if all the USD held in 'reserve' external to the US were to be returned (spent back into) to the US in demand of real goods - then as Michael Hudson says, it would take in excess of 100yrs for the US to generate such volume of goods - i.e. it is impossible! In Japan's case, since most 'debt' is held onshore (or by govt. itself) no such sustainability problem exists. Suggest you read Bill Mitchell's billyblog of May 1 2024.
Its important to remember that debt you owe to yourself is not real debt just an accounting trick. The USA owes 5 trillion to the FED and another 7 trillion to the US Government itself so out of 34 trillion debt around 12 trillion is account tricks so the REAL us debt is actually only 22 trillion not 34.
I'd be more concerned about the giant US debt and the strongly rising dept servicing. The US is facing a severe economical meltdown in the next few years. One way out will be a strong and long inflation of the US$, so that those graphs will be upside down...
Still growing in 2024 too: Japan's exports increased for the third straight year in 2023, hitting a record high, according to preliminary figures released Wednesday by the Ministry of Finance, reflecting strong automobile shipments and the effects of the weak yen.
Great analysis as always but I disagree with your comments on how much it is affecting normal people in Japan. Our wages are not increasing nearly fast enough to catch up to inflation and it's getting harder and harder for people to get by day to day. It's important to remember that our food self-sufficiency is very low, so food prices are getting higher and higher. This is my daily lived experience in Japan. General analysis is probably onpoint and certainly the companies that export (as well as inbound tourism industry) are profiting a lot from the current situation but it's very dismissive to say that it's not affecting normal people. Workers are struggling here, a lot...
Great explanation and a much needed one; in order to understand how current economic issues faced by countries are intrinsically linked to Geo-political situations all over the world.
On the face of it A Japanese manufacturer is facing a double whammy in cost--higher wages and higher material cost due to lower yen. On top of that, the global economy is not robust, to say the least. For an export dependent economy like Japan, it should be a negative. One could say the lower yen makes the Japanese products more competitive. Looking at the Japanese stock market. It looks like the very low yen is economically positive for Japan. Their stock market says yes. It has hit new high. Has it really worked out that way?
What you say is true for the most part. Having said that, I can say while living in Japan for decades that the standard of living has been dropping for *most* Japanese people (perhaps those outside of the top 20%=top pentile) due to some inflation combined with little increase in income. Also food prices have gone up in japan at least 15% in the last 18 months (the government takes out "volatile" food costs in most inflation calculations.) I also think Japan should reduce their holdings of US Treasure bonds by at least 30%.
If all vassals of the reserve currency falls harder than the reserve currency is, then it will look like the reserve currency is still strong and not lose its status as a reserve currency. So, from this perspective, to save the reserve currency, there needs to be a falling vassals currency. For Euro it will work if there was a war created there.
Thank you Ben. Independent journalists with journalistic integrity are the heroes of our time.
He's not a journalist. He's a propagandist.
" Australia expelled two Indian intelligence operatives in 2020 as part of ‘nest of spies’, reports claim "
Correct, sir.
This state has Controlled and Used Japan for decades. Thanks Ben
Down with Chinese Social Imperialism! ✊✊
@@boi9842or the reverse, down with the Collective West?🤨
@@boi9842
@@brownman2370 we can oppose both sides, both are imperialist. We have nothing to gain by supporting Imperialsit powers.
Japan is us' comfort nation
For the longest time, I didn't even approach economics, because from a distance, it seemed so complicated.
Ben's explanations are absolutely incredible, and I find that his approach is genuinely very eye-opening to the lies that are spread by mainstream economists.
ECONOMICS are intentionally made complicated, just like our tax system so the thieves always walk free.
Down with Chinese Social Imperialism! ✊✊
@@boi9842🤡
When explanations are so confusing or "complicated" that you can't connect the dots, you are probably being lied to.
US bot@@boi9842
Japan imports 62% of its food(25% of that from the US), to say the Japanese worker isn't feeling the inflation on food is bogus, they are feeling it acutely!
You didn't liste, did you? Or... everything went over your head.
That’s why he said PPP is a more accurate measurement of the cost of living of the population
they feel a lot
There's been an increase of sex workers, so that's about something...
@@Leila-sd1sl price changes in supermarket are more straightforward.
Japan is being scarified by US.
Hopefully there will come a point where that will no longer be tolerated.
Again 🫠
Plaza Accord
And this will happen to Australia and those make believe submarines
liamporter You have no idea what kind of people Japanese people are.
Japan wouldn't dare to sell the US Treasury bonds. Japan has been told to stay put.
Maybe until the election in November, at least...
Japan no autonomy
The USA aka IOU-country, is always exporting their debts.
That is what Ponzi-scam means.
The Ponzi part of this debt exportation is because the USA spends all of its money on things that don't help its economy and then takes on all of the private debt of our economy and then sells that same debt back to the very people who got themselves in deadly debt in the first place, so THEY make money for getting into such debt in the first place.
The USA does not export debt, it issues Treasuries which anyone is free to buy, many Americans bought the awesome I Bonds. Every country in the world does the same too, no different than the USA.
@@drscopeifyUSA exports debt via their dollar, stoopid
This is what Michael Hudson refers to as Super-Imperialism.
@@drscopeifyit's not the same. The world doesn't use their own individual currencies as international reserve currency. It uses the US dollars as a reserve currency. Central Banks around the world inevitably have US dollars buildup in their economies if they are surplus payment economies and have nothing to do but buy US Treasury bills, which essentially funds US debt. If they don't, the US dollar will eventually start to fall against their own currencies, and make the Treasury bills they already own worth less, it makes the debt of other countries denominated in US dollars harder to pay off, and it makes their own exports less competitive while making US exports, or the exports of US owned companies more competitive against their own. It forces payment surplus countries to inevitably buy US government debt, trade in US dollars, and countries with payment deficits denominated in US debt through the IMF and World Bank, need to contribute to this international monetary system to try and keep the US dollar stable if they ever hope to pay off their IMF/WB debt denominated in US dollars.
This is Economics University + Geopolitics. Thanks for your truthful work.
I keep saying this - you deserve millions of subscribers! 😊
Agree, the only possible improvement is to add some sense of humor and laughters😅
@@Shadowless_KickI think that depends on the personality of the person. To try something that’s not natural to you would sound incongruent. He’s discussing serious topics, so not every listener would expect him to be humorous, imho. He needs to be true to himself.
@@erigerontriteleia Ben is smart and usually smart people have good sense of humor. I think he appears to be serious only because he is too upset.
@@erigerontriteleia...Totally in agreement!
Currency is paper NOT products or resources which really count
too true. Money exists in the imagination. It's a fantasy world where Lawyers and Accountants live. Products and resources exist in objective physical reality where Engineers and Farmers live.
@@mijmijrm Indeed. That's why China's been buying US farmlands and businesses. Otherwise, what are they suppose to use those dollars for? non existent American TVs? Movies and subscriptions only reach to a point. And I certainly am not interested in photoshop subscription models. Next thing you know we'll be paying Steam subscription instead of the digital games we bought, which in itself is dubious.
currency is paper protected by military and politics...they can ban river water...build a dam and make you pay for it...if they want it too...
This is the second time Japan has suffered economically for being the vassal state of the US. The first was in 1985 when it was asked to sign the Plaza Accord in which the yen was made to appreciate against the US dollar which led to the Japanese asset price bubble which lasted for at least a decade. Japan was on course to become the largest economy in the world when it was asked to sign the Plaza Accord. Recently, Germany overtook Japan as the third largest economy.
The German economy is in Freefall so its pretty horrifying if they're doing better than Japan.
So true, the USA being the bully of the world and fearful of Japan during the 80s , becoming the biggest economy in the world, now USA is giving China the same treatment
@@mikeborrelli193 Indeed.
Please don't say that the US is bullying Japan; we live in America, much more miserable than the Japanese. We have to spend a lot of energy to have a place to sleep and something to eat. The Japanese only buy necessary materials, while we have to buy finished products. You should say that the market managers in New York are not really Americans, who don't work by hand to make anything but earn the benefit of money moving, and they are borderless people.
The Plaza Accords did NOT cause the "asset bubble": the accord caused japanese exports to fall significantly.
As a result, the Bank of Japan slashed interest rates to TRY to stimulate domestic spending. BUT, the japanese being the japanese took their savings out of low interest bearing accounts and parked it into stocks and property.
This caused stocks and property valuations were already at speculative levels but the japanese public demand sent that into the bubble level as we saw the Nikkei index go into imaginary levels and properties across Japan go to levels worse than what happened in the US in 2007-08.
For short term, weak Japanese Yen may not have direct impact to average citizens. However, as Ben mentioned, Japan relies so much on import for food, energy and raw materials, long term it will drive up inflation w/o a doubt. So, I am not as optimistic as Ben saying ordinary citizens in Japan will be just fine. Both Japan government and BOJ has been mis-managing the balance-sheets for decades. The debt level is so high that they can only allow Yen to continuously depreciate. They don't have an option to raise the interest rate to slowdown the depreciation. In the end, this is just a way to take away wealth from citizens.
Seems like Japan's 1.1 trillion dollars in US treasury bonds would go a long way to at least mitigate the yen issue. But as Ben mentioned, the US seems to have told Japan's government to not do this, as it would drive up US inflation and government interest costs even more at an inopportune moment for the US. (Incidentally, the UK is doing the same as Japan, I believe.)
I have been thinking that Japan's government may have agreed to keep propping up the US government's finances this way at least until November, when the US elections get done. Maybe then Japan will do what seems economically sensible and starts decreasing its US treasury bond holdings instead of just keeping buying more and more like now. In that case, whoever gets elected in November in the US might have to start (finally) enacting significant measures to decrease US federal deficit spending from 2025 onwards.
Agreed.
How is like to be the vessel state of USA ? Someone should ask Japanese leaders.
Vassal lovebird , I think
I'd imagine it's probably no different from how IL controls the US via AIPAC. If you secretly pay corrupt politicians enough money, they'll do whatever you ask them to do.
I'd imagine it's probably no different from how Izzreal controls the US via A.I.P.A.C. If you secretly pay corrupt politicians enough money, they'll do whatever you ask them to do.
I'd imagine it's probably no different from how Izzreal controls the US via APAC. If you secretly pay corrupt politicians enough money, they'll do whatever you ask them to do.
My comment keeps getting deleted by the UA-cam asshats. But all I was trying to say (without comment getting deleted this time) is that money corrupts. Just look at how Izzreal has the US by the balls.
"To be an enemy of the US can be dangerous but being a friend of the US is fatal." - Henry Kissinger
yes, yes and YES, totally correct.- on the other hand, that would explain why USA have NO real friends....be safe.TH
The US has no friends; only hostages.
LOL
Jesse Ventura, “When the government lies, the truth becomes a traitor.”
US GDP records drug deals and other criminal activities as productive economic activity.
White collar crime including wage theft, fraud, and service charge greed are also recorded as positive GDP activity.
The same can be said about disaster relief, business subsidies and regulatory capture to evade paying the costs of business.
And the largest nominal GDP flummery is Defence spending that only destroys and never produces constructive economic activity.
GDP needs to strip out military, police, and justice spending, along with disaster relief, and business subsidies.
Health care costs above average should also be stripped out of constructive GDP measures.
Japanese currency devaluations may be due to forward depreciation of Japan's US currency holdings.
Japan's access to a failing US market is also a fading asset.
Lactantius, (late 3rd century) (The Divine Institutes): “In order to enslave the many, the greedy began to appropriate and accumulate the necessities of life and keep them tightly closed up, so that they might keep these bounties for themselves. They did this not for humanity’s sake (which was not in them at all), but to rake up all things as products of their greed and avarice. In the name of justice they made unfair and unjust laws to sanction their thefts and avarice against the power of the multitude. In this way they availed as much by authority as by strength of arms or overt evil.”
America has no friends, only slaves.
Agree that GDP and currency are not the only indicator of economy. But the Japanese industrial strength is also facing severe challenges. Auto industries is Japan's top employment sect which is being crushed by the EV revolution.
what else high tech value products japan has beside cars
I agree. However its industrial potential is still marvelous.
One good thing of Japanese policymakers is its ability to look ahead; this doesn't always occurs perfectly but significantly enough to help them to survive...and thrive.
They have been industrial pioneers in contemporary sectors such as robotics and hybrid cars (which partially explain why do they lost the EV train), And now they decided to enter the world of green hydrogen, and they are going to probably succeed. The things is, they engage in things quietly, and work on them consistently, for decades until they get results.
I believe they are going to be fine, particularly if they find a sustainable Modus Vivendi with China.
With low yen price, isn’t it time to get back? They can do a pretty good EV if they want.
Though stop following American’s Apple way of doing things.
@@yohaneschristianp the problem is it might eat into the market share of their own ICE vehicles which is currently their cash cow. that is why their legacy carmakers are reluctant to go full steam ahead into EV manufacturing. Chinese EV makers are different because they are fresh and don't have their own ICE brand to worry about. For them EV is all or nothing. It's possible to start up brand new Japanese EV companies instead of relying on the traditional Japanese car companies but then these start ups would have to compete against the legacy ICE companies like Toyota, Honda etc in Japan first. That means somebody has to lose out in the domestic market. Japanese automakers are caught in two minds, should they slowly atrophy as other EVs take over their market share or should they risk killing their present ICE cash cow at the expense of tackling the foreign EV challenge head on. It's like the trapeze performer who is thinking of grabbing on the next swing but is reluctant to let go of the swing he is holding tightly to. The Toyota CEO recently just said that the ICE still has a future and EV's are 'failures'. It show their mentality and disdain going into EV.
Many car brand have big loss too bc EV bloodbath price war
USA exporting its economic problems? .. Israel may have the most moral army in the world, but USA has the most moral economic policy in the world.
/snark .. in case it's not obvious
The U.S. economy is in bad shape because printing too much money causes inflation, so it has to raise interest rates to suppress inflation. The interest rates are too high, and banks cannot handle them by closing down their businesses. Companies are also unable to borrow money for investment and operations because the interest rates are too high. Companies are not doing well. Just lay people off. Laying off too many people will cause social problems such as social crime and homelessness. However, interest rates cannot be lowered because lowering interest rates will intensify inflation. Not to mention printing too much money and accumulating a national debt that cannot be repaid. This is an endless loop. . .
Genuine question; how do you get iut of such a loop?
@@heaven9378 Simple, stop the money printing and cut down spending. It will take time to let the inflation down. But we all know that politicians will never do that.
Inflation can wipe out national and private debt, as long as you stop increasing it. As you cannot get something for nothing, the actual wealth to pay off the debt comes from the non asset owning population who will see a reduction in living standards.
@@alanjenkins1508 How?
"Look look line go up" had me spitting coffee. 😂
ya 😂😂😅
The US damaged the Japanese economy with the Plaza Accord. Also Japan has a declining population.
Its a client regime of the US- most of the world is, unilateral hegemony, but its failing under its moral deficit. Russia has stood up and China fights with her!
No, the US Dollar value became too high so the Plaza tried to fix that, this did not damage Japan in fact it may have been one of the reasons for the large rise in the Japanese economy and the large bubble the formed, then later it collapsed but that was long after. If the Plaza accord did anything to Japan it was to boost the economy too much not damage Japan.
@@drscopeifythe Japanese people are not buying your BS please stop already
There are a lot of CCP people overstating the effect of this. The Bubble Economy of Japan had a banking crisis and there were other factors.
@@georgeinjapan6583the anti US propaganda is strong.
Great work Ben. Please keep it up! Thanks!
According to the IMF, China became the largest economy in the world in 2014 on Parity Purchasing Power measure, and is the increasingly larger economy by far. China grows 3 times the rate of the US even in nominal term every year for more than 20 years. Just because the US $ is the world reserve currency its strength is distorting statistics.
China's manufacturing capacity is now bigger than that of the US and Europe combined. This fact is universally acknowledged.
In terms of GDP, the US relies on expensive services sector. Its production of tangible goods is relatively small. China is the factory for the world. When US companies import from China they sell in the US at a healthy profit margin. The revenue is counted as part of the GDP, while on the other hand in China the export is lower in value of the same goods and this lower value is accounted for in China's GDP. So you have two different sets of data of the same goods. Anyway, this just illustrates how much more powerful China is as a producer.
122 countries in the world count China as their largest trading partner. Because of geopolitics the US has sacrificed its allies by asking them or forcing them to ban the sale of certain products to China. But where can they sell their "unsold" products to? No one. So they make less profit, lay off staff and reduce R&D. It is a downward spiral for them. They have found out to their pain after following the order from US for a couple of years that their source of revenue is dwindling whilst China invests heavily to make their own to become self sufficient. When relationship is repaired China does not want to buy those goods and machines from those US allies because China could now produce them themselves. This is the reality.
Pawns are always sacrificed in a chess game.
You say it to make the listener think that pro-American countries are pawns to be sacrificed, but the Japanese are especially not led that easily. Americans may have been innocent before China, but Japan was not. With every gesture or every half-word of the Chinese, the Japanese know all the Chinese thoughts. You mentioned China's exports for a long time, but don't they also export products of Japan and Western? How long did Huaway or BYD debute? Japan cannot sell a lot to the Chinese. To conclude, keep your word until Huaway and BYD are made in Japan, then you can say anything that is right.
*2013
PPP is very misleading as it is using market price comparison which means that a country such as China that does major currency manipulation has data that is heavily distorted. If China's Yuan was let to freely float without guidance it would rise dramatically and caused industry and export to collapse, so PPP is seriously misleading as it stand on a foundation of false reality.
Later on, companies from these so-called allies will be subject to foreign acquisitions
The real problem is China aggressively stealing intellectual property from the West. There has to be a response to that.
Ben_Norton, I thank you for your excellence. You're a living legend.
more of these please, your analysis and reports are actually thorough and well explained. Thank you.
When energy prices rise, cost of living increases. This is why the Yen to Dollar ratio is important. Japan is not in BRICS. They cannot get cheap Russian oil.
Being a US vassal has consequences.
It also has a Helluva lot of benefits.
@@tyrismaxey Some, yes, but debatable these days. The right to store US military bases on your territory?
@apostolostvable Those bases patrol the waters that make sure globalization and world wide trade can happen. Do you think that's a benefit to countries that import most of their necessities?
@@tyrismaxeyexcuses to suppress
@jsyo9639 an asinine comment. Suppress who? The world has never been this prosperous, never. Never this kind of sustained peace. If you want universal equality, you're in the wrong universe. After WW2 every other country on Earth would have colonized half the planet, America didn't do that. Instead it ushered in the greatest era of growth and stabilization in human history!!
My learning GDP ... correction, PPP, always increases while listening to this channel !
🤗🌟✌🏻
I am japense and I support china so many japense supports China now but usa don't like it
So basically Japan is the canary in the coal mine, it is slowly painting itself into a huge corner (debt), interest rates rise its screwed and endless QE is unsustainable, it cannot buy its own debt indefinitely either.
Thank you, Ben. Now I understand it. This channel gives me a bunch of knowledge and my favorite channel on YT. ❤❤❤
Thank you Ben This is a great economic analysis
Thanks "Prof Norton" for making the "long and complicated analysis" on Japan economics simple and engaging for the rest of us non-econ folks
I swear to God , you're a wonderful journalist.❤❤❤❤❤❤❤❤❤❤❤❤
Quality information and analysis a great way to start the morning thanks Ben
The U.S. killed the Japanese export based economy with the Plaza Accords by raising the price of Japanese labor (work added) for exports by 4x. Flip side was they went touring round the world on the cheap. Maybe now the Legendary Japanese Industrial Machine can ramp up once again if the yen hits ~350/450ish. Handmake your premium cars and watches again you Japanese dudes. I'd buy them for their quality knowing your culture of dedicating your entire clan to a craft.
P.S. I'm sure there's some symbiosis possible somewhere where the Japanese produce ultra high end industrial products for Chinese Industry. Kinda like the Germans making perfectly flat mirrors for the Dutch to make those UV chip machines.
A weak currency can be good, if you produce products and services that can be exported.
Its BAD when the only thing propping up your currency is it being used by most of the world.
Biden told Fumio Kishida, ' Follow me and I will lead you to the promised land.' Thank you, Ben
Ah the promised neverland 😊
Thanks for explaining this so well, Ben
Economics reminder! Thank you for the good service you provide.
“Ian Bremmer, a pundit…” You are being kind and generous, Ben.
Your channel is absolutely incredible. There is so much value here and its not plagued by the sponsors ad nonsense. Thank you, and I look forward to all your content!
`!!!!!!`
nations are sick of imported inflation again and again (because of U$$D Over-Printing), disrupting their economic growth...
while us enjoy their spending spree without feeling guilty/shame for the world...
world-wide de-dollarization is inevitable and imminent, or is it?
Generally I get lost when people start speaking numbers but when Ben Norton does it, everything is clear.
You're a great teacher Ben-economics or Norton-omics and it impacts geopolitically, it's all accurate just like that episode about Argentina.
Thanks
Not only Japan, all those partners or vassals will face the same consequences as US main concern is to benefit it at the cost of others. This is geopolitics.
In my home country Brazil unfortunately the decrease of value of the national currency in comparison to the dollar (around 250% fall during Bolsonaro government) did meant a severe social economical crisis to our people since, differently than Japan, we were never allowed to have an industry in the international economical order. Worse than that, all the state money on agriculture goes to the big export monocultures so even the food, produce it by small agriculture more and more isolated, also got way more expensive with this crisis.
Thank you for your information and presentation. I enjoy your work.
This is the best analysis I have seen about the recent JPY issues. I learned a lot abut the complexity of the matter. Thank you so much. Ben!
Thank you, Ben, for explaining this topic in simple terms making it easy even for a layperson like me to understand. Much appreciated.
Thank You so much explaining the PPP. This makes perfect sense in relatable terms. I’m concerned about the value of our currency. If we’re just printing currency, then if it has no value, then we’re just shoveling paper around. And what difference will a bitcoin be if the currency has little to no value?!
USA is using Japan as buffer.
No, Japan is using the USA as protection against China.
First educated analysis about world economy I have listened to in a very long time
Hello Ben. Just to tell you that you're a terrific reporter. I hope you're doing well. Take care
Seems like average prices have gone up around 70% higher since covid here in Japan. People living here are in crisis, trying to make ends meet, taking every opportunity to scrimp and save.
Great show, very interesting
Thank you, Ben! Your presentations and analyses are always, always coherent, concise, interesting, and informative! ✊🏽
Thanks!
Thank you Ben
Thank u. Very well put❤
Great discussion - Thank you Ben so much!
I believe Quantitative Easing was invented by Richard Werner and used by Japan when he was advisor to the Bank of Japan.
So effortlessly explained. Am watching while doing other tasks but i can understand everything. Am not even a finance inclined person
Incredible analysis! Thank you Ben
I love the way this channel presents its information about the National Debt of both Japan and the USA and how neither country wants the status quo to change. But change is coming as it always does. And you either put yourself in a position to withstand the change or get washed away from it. I am trying to learn economics on my own so channels like this are vital for me.
I genuinely want to thank this channel for unbiased information!
Excellent explanations Ben, thank you, love this channel!
Thank you, Ben, for the very insightful analysis of Japanese economy. It has given me a lot to think about as I am thinking of moving to Japan.
Ben, a very nice presentation and agree with most of your points. Problem of Japan this time is that following Yan depreciation against the USD, export of Japan has not grown. And this brings back your point that the US government deficit is funded by Japan, or Japan is now harvested by the US,. Question is why Japan is happy to do so.
Because as a country, occupied by USRAEL like Germany, Japan can´t do anything against it.
When you are somebody's slave, you have to always serve your master's needs even if you're 100% unhappy about it.
Japan, like Germany, has no sovereignty
@@alexanderivkin7086 Nonsense Japan is free to do anything it wants in fact Japan had a free election in 1946 just 1 year after WW2 ended and they avoided Vietnam war and also later had a major major trade war with the USA in the 1970s and 80s with the USA banning many Japanese imports and Japan banning America imports as well. A proper trade war. Japan is not a vassal of the USA at all in fact the 2 had a very bad relations for a long time. Today with the threat of war with China the two countries are very close once again for obvious reasons. This is a failed strategy by China with their threats and wolf warrior policies it makes the world hate China but that's just failed policy by China
Very good job Mr. Norton in disclosing the economic truth.
Like a kind of open university lecture on government accounts and exchange economics. Excellent work Ben… you are helping to educate people in the void that they usually face online and indeed in most universities. Glad you warned people away from certain other commentators like a certain Columbia University political science professor.
What an awesome G/E analysis. Thank you
I so appreciate your theoretical explanations that explain the economic underpinnings of geopolitical decision making. THANK YOU!!
Japan is not an independent country for decades after WW2.
Nonsense Japan had a free and fair election in 1946 only 1 year after the war was over Japan already had a totally free and democratic election and a new government formed. Relations between the USA and Japan were not good in the 1950s-1990s due to many issues like lack of support of war in Korea and the later trade wars in the 1980s but slowly relations have become very strong due to the fear of war with China.
@@drscopeify Japanese Yen...boom!!! boom!!!
Thank You Very Much Ben for Your Consistent Hard Work 💐💐 This is Valuable Information 💐🦋
@11:50m: "... and the US government has a federal debt of 122% of GDP that has to be funded somehow.."
It will be funded the same way as all Federal spending is funded - the US congress will pass a money bill authorising the requisite new spending. No question of 'debt' sustainability exists. When the 'debt' currently on issue matures the principal will simply be paid out. From the Fed. Resv's point of view, the bond holders cash will be moved from an interest earning investment account to a non interest earning cash account.
@ 12m "...one of the main countries that is actually funding this US government deficit is Japan..." That is Japan's problem, not the US's problem. Japan is not funding the US deficit - it is parking its excess USD reserves in an interest earning account at the Fed rather than leaves those USD funds in a US bank cash account earning zero interest.
Same goes for China's excess resvs. Both China & Japan have accumulated USD reserves due to running trade surpluses against the US.
US bond issuance is a monetary operation (not fiscal !) to regulate the daily cash (interest) rate - it is in fact operationally optional - the same interest rate control could be achieved by paying banks interest on excess reserves.
The US national 'debt' is only unsustainable in the sense that if all the USD held in 'reserve' external to the US were to be returned (spent back into) to the US in demand of real goods - then as Michael Hudson says, it would take in excess of 100yrs for the US to generate such volume of goods - i.e. it is impossible!
In Japan's case, since most 'debt' is held onshore (or by govt. itself) no such sustainability problem exists.
Suggest you read Bill Mitchell's billyblog of May 1 2024.
Its important to remember that debt you owe to yourself is not real debt just an accounting trick. The USA owes 5 trillion to the FED and another 7 trillion to the US Government itself so out of 34 trillion debt around 12 trillion is account tricks so the REAL us debt is actually only 22 trillion not 34.
❤❤Thanks Ben. Great tutorial❗️👍
Superb video & great content providing clarity.
Thank you, Ben, for your great effort to educate the world.
Excellent analysis and patience in your explanation on this complex subject which I'm trying to fully understand.
I'd be more concerned about the giant US debt and the strongly rising dept servicing. The US is facing a severe economical meltdown in the next few years. One way out will be a strong and long inflation of the US$, so that those graphs will be upside down...
Best commentary! Well done,sir.
Thanks Ben, your analysis tutorials are educational.
Thanks for this. Hard to find any meaningful analysis on Japan’s economy and currency situation
Still growing in 2024 too: Japan's exports increased for the third straight year in 2023, hitting a record high, according to preliminary figures released Wednesday by the Ministry of Finance, reflecting strong automobile shipments and the effects of the weak yen.
Enlightening exposé. Thank you for yet another great report. Ben Norton good✊🏼
Very useful episode, Ben; more of this system/mechanics kind, please.
Excellent video! Good job Ben.
Thank you for this. You are always illuminating the road ahead of us. Keep the good work.
Ben's commentary is always interesting and very informative. Thanks a lot.
Great analysis as always but I disagree with your comments on how much it is affecting normal people in Japan. Our wages are not increasing nearly fast enough to catch up to inflation and it's getting harder and harder for people to get by day to day. It's important to remember that our food self-sufficiency is very low, so food prices are getting higher and higher. This is my daily lived experience in Japan. General analysis is probably onpoint and certainly the companies that export (as well as inbound tourism industry) are profiting a lot from the current situation but it's very dismissive to say that it's not affecting normal people. Workers are struggling here, a lot...
Ben,you are a legend.
"Look at line. Line go up." - That's about right for Ian Bremmer...🤣
This is very true thank you so much ❤❤
Great explanation and a much needed one; in order to understand how current economic issues faced by countries are intrinsically linked to Geo-political situations all over the world.
On the face of it
A Japanese manufacturer is facing a double whammy in cost--higher wages and higher material cost due to lower yen.
On top of that, the global economy is not robust, to say the least. For an export dependent economy like Japan, it should be a negative.
One could say the lower yen makes the Japanese products more competitive.
Looking at the Japanese stock market. It looks like the very low yen is economically positive for Japan.
Their stock market says yes. It has hit new high.
Has it really worked out that way?
Thank you. it was very helpful.
Great explanation. Thanks for your clarity and articulate opinion!
What you say is true for the most part. Having said that, I can say while living in Japan for decades that the standard of living has been dropping for *most* Japanese people (perhaps those outside of the top 20%=top pentile) due to some inflation combined with little increase in income. Also food prices have gone up in japan at least 15% in the last 18 months (the government takes out "volatile" food costs in most inflation calculations.) I also think Japan should reduce their holdings of US Treasure bonds by at least 30%.
If all vassals of the reserve currency falls harder than the reserve currency is, then it will look like the reserve currency is still strong and not lose its status as a reserve currency.
So, from this perspective, to save the reserve currency, there needs to be a falling vassals currency. For Euro it will work if there was a war created there.
Military ⚔ occupied by USA 🇺🇸 is not only Japan 🇯🇵... Germany 🇩🇪 too ❤😂🎉😅😊
Well done
Thank you for great explanation. You are on par with Prof Wolfe. 😊
"To be friends of the US is fatal"
Kissinger