Tuesday, August 18, 2009

The World’s Worst Economy grows

The recession has certainly brought a lot of interesting analyses of the Japanese economy out of the woodwork. It seems to me like a bit of a Rorshach - pundits project their own prejudices onto the facts, and Japan has such a plethora of contradictory facts that just about any theory can be supported.

Most impressive, perhaps, was this Newsweek article arguing that Japan has the world’s worst economy. Compared to Bhutan or Zimbabwe, I can see her point...er....

In common with France and Germany and Hong Kong, but not the UK or USA, the Japanese economy is now growing again. Of course it's all smoke and mirrors stuff with most of the growth directly attributable to Govt spending, but that's the way the Japanese economy has always run anyway. Recently it has got a bit out of hand - everyone, even foreigners, got ¥12,000 dropped from helicopters as spending money, and our institute seems to have more money than we can spend. Maybe the gravy train will hit the buffers some time, but people have been saying that for years. and it is not clear that the day of reckoning is really any closer.

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