• 858 days Will The ECB Continue To Hike Rates?
  • 858 days Forbes: Aramco Remains Largest Company In The Middle East
  • 860 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,260 days Could Crypto Overtake Traditional Investment?
  • 1,265 days Americans Still Quitting Jobs At Record Pace
  • 1,267 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,270 days Is The Dollar Too Strong?
  • 1,270 days Big Tech Disappoints Investors on Earnings Calls
  • 1,271 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,273 days China Is Quietly Trying To Distance Itself From Russia
  • 1,273 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,277 days Crypto Investors Won Big In 2021
  • 1,277 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,278 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,280 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,281 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,284 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,285 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,285 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,287 days Are NFTs About To Take Over Gaming?
How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

  1. Home
  2. Markets
  3. Other

Following Japan's Failed Economic Model

Japan Economic Cartoon

With Charles Hugh Smith & Gordon T Long

26 minutes

Charles Hugh Smith and Gordon T Long discuss the failed Japanese Economic Model and what it means for those nations following the Japanese path of QE and then QQE.

It's not just about Japan as a nation failing -- but that it's critically important to understand that the model Japan followed in the postwar era is failing.

Japan reached preeminence via an Asian-specific form of Capitalism with these four characteristics:

Four Pillars


Four Failed Pillars - Lessons Learned

1. Integration of government ministries and private-sector cartels,

2. Heavy reliance on export sectors for growth and profits,

3. Domestic savers provide the capital for export expansion,

4. Defaults and write-offs of bad debt cause loss of face and are thus hidden from public view

Charles Hugh Smith spells out why all four have failed.

This model will fail in every nation that relies on it.

Japan's response to the failure of its growth model is not a solution but an additional problem:

-- Expanding fiscal deficits to enable more government spending,

-- Monetizing government debt (Bank of Japan creates money and uses it to buy government bonds)


Is Japan's economy unique in the world? Yes and No.

YES: It is an island state with a homogeneous populace that is culturally attuned to producing high quality goods, saving money and sacrificing individual interests in favor of the greater good. That is unique.

NO: But the mercantilism, state-capitalist, debt-dependent model is not unique -- it has been copied by other developing nations as the gold standard for rapid development."

Japan has marched down the road that all the other developed economies are presently marching down.

Following Japan's Failed Economic Model

 

Back to homepage

Leave a comment

Leave a comment