Why the Japanese Yen is Collapsing

Japan has been living in the year 2000 since the 1980s

“Developed, undeveloped, Argentina, and Japan” Quote of the day

Its worse here, our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.

A Japanese living in Japan here. Around March, I was checking Amazon for various products to put down a lawn in my yard, and where the Gardena sand rolling tool was in the 6000 yen range, I see now that it is in the 8000 yen range. The price of other tools must have gone up as well, so I have given up on putting up the lawn this year for now. I'll see how it goes and do it next year, but there is no guarantee that it will be in better condition by then.

Japan's lost decades were largely triggered by the USA who were in the late 80s downright paranoid about that country's ascendance in manufacturing. Those old enough to be an adult then will remember it well. In the 1980s the yen was 220 to the USD and it was an export led economy that had eye-watering trade surpluses with every developed country in the world. Through a combination of political pressure and currency manipulation (which the USA was uniquely able to do due to the power of the petrodollar, especially in those days), they forced the YEN to appreciate to 110 to the dollar making Japanese goods twice as expensive to crater its exports, and crater it did. With corporate profits tanked, companies stopped investing. Whereas this would normally result in a deep recession and high unemployment for a few years before growth returned again, as Japanese culture view lay-offs as anathema, they retained their employees and depressed wages instead. So we have this unique scenario of consistent near full employment with deflationary pressure instead. Lower energy prices (stronger currency buys more barrels for the same amount) also put deflationary pressure on goods manufactured for the domestic market. Stagnant wages + deflation, of course people are gonna tighten belts. With C & I & X gone for ye old C+I+G+(X-M) formula, of course doemstic asset prices and financial markets also crash and a vicious circle occurs. As a side note, Japan's lost decades helped open the door for Korea and China rise. Once upon a time, you can't go to the electrical section and find it filled 90% with Japanese products, now it's filled with Korean and Chinese TVs and refrigerators. In the case of the latter, perhaps the tale will have an ironic twist whereby America's fear of Japan helped a create a bigger dragon to rise and this was one is nowhere near as friendly to the US as Japan was/is.

If Japan’s economy is considered “collapsing” then what does that make my country 😭🇳🇬 we must have collapsed to the depths of hell at this point

pacing is SO important there are a lot of videos that I can't watch because all of the information is disorganized and spewed out at once this video has a VERY steady pace, easy to metabolize, really appreciate that!

Standard of living is extremely high in Japan. Food and drink are fairly inexpensive. Low growth is still progress, and people like stability and predictability. Japan reached its "mature economy" status quickly.

I’m Japanese living in UK and recently went back to my country, I was shocked people have a good life in Japan there is lots of cheap and delicious food all over the places so they can eat out almost every day( in fact cheaper eating out than cooking it yourself) goooooood health care service in Japan. ❤

It’s quite sad for a great country like Japan and Korea to be under control from US government.

2:38 "The bubble burst, and continued to burst for a while" I don't know why that caught me off guard

Many people worry about Japan, but they should worry about their own country first.

The lost decade of Japan was due to the Plaza Accord between the US, France, Germany and the UK, and more importantly by the forced ending (demanded by the US) of the Window Guidance state credit system in Japan. Window guidance (credit lending by the state via the Bank of Japan and not by private lenders via private stock exchange) is seen as the most important financial and monetary policiy that made the Japanese economic miracle possible.

Great video, very informative. Consider changing the typography for definitions and graphics - it’s difficult to read when it’s all written in capitals and lettering isn’t adequately spaced. Thanks

But then I pretty well remember around 1996 I just arrived in Japan from Brazil as a manual laborer. And there was this Brazilian in my workplace who was going back to Brazil with like 70,000 US dollars saved. He already exchanged at 152 yen because, as everybody at that time thought, the tendency is to ONLY devalue and the sooner the better to dollarize it. And then in a matter of weeks it went below 130... Bottom line is you never ever know.

Does "Plaza Accords" ring a bell? This lop-sided accord basically handcuffed the Japanese.

The UK is very dependent on imports too, particularly for energy, and has done a lot of QE recently followed by a period of stubbornly high inflation. People in the UK have also been more focused on paying off debt than taking on more over the last year or so and house prices are falling - all sounds familiar then!

The quest for infinite growth on a planet with finite ressources. What could go wrong?

Props to the news reader - well presented. Clearly spoken and well paced delivery.

Gotta look up the Plaza Accords.