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Will Abenomics be good for Japan's economy?

Will Abenomics be good for Japan's economy?

  • Yes

    Votes: 8 25.8%

  • No

    Votes: 16 51.6%

  • Undecided

    Votes: 7 22.6%
  • Total voters
    31
gavinfielder said:
So now both you and JP claim Abenomics is doing exactly what it's intended to do.

Ok. Maybe it's a model after all.
Click to expand...

I never it wasn't. To me it's just another failed policy which will lead to massive inflation in Japan.
 
Japan Stocks Fall as Nikkei 225 Enters Bear Market on Yen

'Japan stocks plunged, with the Nikkei 225 (NKY) Stock Average entering a bear market at the close, as the yen rose to its strongest against the dollar in two months. All shares on the gauge fell for the second time this year.

All 33 industry groups declined on the broader Topix index, which sank 4.8 percent to 1,044.17 at the close in Tokyo. The Nikkei 225 slumped 6.4 percent to 12,445.38, its third fall of more than 5 percent in the past month. The gauge fell 20 percent from its May 22 high, passing the threshold some investors use to define a bear market. Nikkei 225 futures lost 6.2 percent in Osaka and 5.9 percent in Singapore.'

Japan Stocks Fall as Nikkei 225 Enters Bear Market on Yen - Bloomberg


The Nikkei 225 lost 843.94 points today...ouch.
 
'Marc Faber : Japan is Doomed

Marc Faber : “The yen is oversold, and stocks are overbought, and the correction is forthcoming,” Dr. Faber says. “But anytime the market would drop in Japan and the yen would strengthen, there will be more money printing.”
“As a result of massive money printing,” Dr. Faber continues, “the yen goes down and the bond market in Japan collapses. This would force the Bank of Japan to monetize even more because as interest rates go up on the Japanese debt, it becomes a burden on the Japanese government to pay the interest on the debt. So it would have to be met by more money printing, and that would lead to more yen weakness.”
And on and on it goes… until the yen is worth even less than the paper it’s printed on.
Such is the fate of all paper currencies backed only by the “faith and credit” of an untrustworthy government. The principles of “sound money” are largely ignored or forgotten. No one practices them anymore. They are the “Latin language” of global economics — discussed only in “theory” by a few steadfast economists who continue to pine for their return.'

Marc Faber : Japan is Doomed | MARC FABER BLOG
 
According to the latest data released early this morning, Japan's factory output is up 2% while their CPI has ended it's downward trend.

Japan got a dose of upbeat economic news Friday when the government said industrial production rose 2 percent in May from April, the fourth straight monthly increase, while the most-watched consumer price index stopped falling for the first time in seven months.

For years, Japan has been dogged by deflation, or falling prices, which can drag on economic growth, and the Bank of Japan has set a goal of 2 percent inflation within the next two years.

Prime Minister Shinzo Abe, meanwhile, has embarked on an ambitious economic revival program since taking office six months ago through massive monetary easing, public works projects and structural reforms — dubbed the "three arrows" of "Abenomics."

Data released by the government showed that the nationwide consumer price index minus fresh foods, which can be volatile, was unchanged from a year earlier after being in negative territory for six months. The last time it was zero percent was last October.
Click to expand...

The rest of the article can be found here.
 
JP Hochbaum said:
For the record monetary policy is not Keynesian, but Friedman who advocated helicopter money.

So yes I think Abenomics will not work, monetary policy never works. But good old fiscal Keynesian policies would be a welcome surprise to developed nations.
Click to expand...

It's funny how some people on this forum (usually conservatives) don't seem to know the difference.
 


Good clip talking about abenomics in the first half.

I've slowly been gaining confidence in it. Seems to be working.
 
Kushinator said:
According to the latest data released early this morning, Japan's factory output is up 2% while their CPI has ended it's downward trend.



The rest of the article can be found here.
Click to expand...

Wouldn't get too excited about it just yet. Japan has had inflation over the last year so it could be different reasons for this. ;)
 
Japanese Q3 Growth Tumbles As Abenomics Cracks Following Slide In Consumption And Exports

'Earlier today we reported that the Japanese cries of "more QE" have not only started but are getting progressively louder, when after a massive initial surge in the first half of the year following an epic currency dilution, the Nikkei's performance since May has largely been one big dud, which is putting not only the psychological "wealth effect" at risk, but also is tearing Abenomics apart, since perhaps the only key variable for the Prime Minister's plan of "growth" is the constant increase in the stock market, much the same as in the US. But while the market has gone nowhere fast, it is the economy that is truly starting to crack at the seams, as was confirmed hours ago when Japan reported that in the third quarter its economy grew an annualized 1.9%, following a quarter when the GDP grew at more than double that pace or 4.3%, which in turn succeeded a quarter with 3.8% growth. What's worse, in nominal terms, the actual third quarter growth was a paltry 0.4%: the lowest in all of 2013 while actual nominal consumption plunged to the lowest level since just after the start of Abenomics.'

Japanese Q3 Growth Tumbles As Abenomics Cracks Following Slide In Consumption And Exports | Zero Hedge
 
DA60 said:
Japanese Q3 Growth Tumbles As Abenomics Cracks Following Slide In Consumption And Exports

'Earlier today we reported that the Japanese cries of "more QE" have not only started but are getting progressively louder, when after a massive initial surge in the first half of the year following an epic currency dilution, the Nikkei's performance since May has largely been one big dud, which is putting not only the psychological "wealth effect" at risk, but also is tearing Abenomics apart, since perhaps the only key variable for the Prime Minister's plan of "growth" is the constant increase in the stock market, much the same as in the US. But while the market has gone nowhere fast, it is the economy that is truly starting to crack at the seams, as was confirmed hours ago when Japan reported that in the third quarter its economy grew an annualized 1.9%, following a quarter when the GDP grew at more than double that pace or 4.3%, which in turn succeeded a quarter with 3.8% growth. What's worse, in nominal terms, the actual third quarter growth was a paltry 0.4%: the lowest in all of 2013 while actual nominal consumption plunged to the lowest level since just after the start of Abenomics.'

Japanese Q3 Growth Tumbles As Abenomics Cracks Following Slide In Consumption And Exports | Zero Hedge
Click to expand...

Apologizing to their big neighbor for having used its citizens as guinea pigs for their chemical and biological weapons programs probably wouldn't hurt their economy.
 
Japan with the shut down of the majority of nuclear plants has seen a large increase in the importation of oil and gas. This has also lead to Japan having trade deficits for the first time in decades. More money spent on energy means less money spent on other goods.

As for Abenomics, it will be a failure for the overall economy, while benefiting it export manufacturing sector. The car industry has seen profits increase as the Yen has dropped in value. Japan has still not dealt with the effects of the asset bubble nearly 20 years ago. The overall debt level is very high, and the only reason it has not collapsed is because Japan still has quite a bit of savings (including foreign currency reserves
 
Lord Tammerlain said:
Japan with the shut down of the majority of nuclear plants has seen a large increase in the importation of oil and gas. This has also lead to Japan having trade deficits for the first time in decades. More money spent on energy means less money spent on other goods.

As for Abenomics, it will be a failure for the overall economy, while benefiting it export manufacturing sector. The car industry has seen profits increase as the Yen has dropped in value. Japan has still not dealt with the effects of the asset bubble nearly 20 years ago. The overall debt level is very high, and the only reason it has not collapsed is because Japan still has quite a bit of savings (including foreign currency reserves
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I personally believe that if Abenomics fail it's likely because of negative externalities, like what you mention about economy-wide energy inputs increasing and funnelling wealth out of country.
 
DA60 said:
Japan October trade deficit nearly doubles on energy bills

AFP: Japan October trade deficit nearly doubles on energy bills


Fuel Imports Send Japan's Deficit Careening To 3rd Worst On Record

Fuel Imports Send Japan's Deficit Careening To 3rd Worst On Record | Zero Hedge


Just as I (and many others) thought.

Sure slowly destroying the value of your currency will increase exports - but it will often increase imports faster.

Abenomics is (imo) dumbass Keynesianism in overdrive.
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Abenomics is not KEynes, lol. Please take a basic economics class that discusses Keynes. Abenomincs is MONETARY!!! It is a NEOLIBERAL agenda given to us by Milton Friedman!!!

from Friedmans own mouth:

http://faculty.chicagobooth.edu/joh...tary Economics PhD course/lecture_2_notes.pdf
 
JP Hochbaum said:
Abenomics is not KEynes, lol. Please take a basic economics class that discusses Keynes. Abenomincs is MONETARY!!! It is a NEOLIBERAL agenda given to us by Milton Friedman!!!

from Friedmans own mouth:

http://faculty.chicagobooth.edu/joh...tary Economics PhD course/lecture_2_notes.pdf
Click to expand...

"Trade deficit nearly doubles on energy bills" - No ****. A ten year old could have come into that extremely obvious conclusion. What does it have to do with Abenomics besides being a negative headwind? Are you saying Abenomics would have worked better had the unpredictable event of a massive earthquake/tsunami not hit the country and so egregiously affected the method of their energy supply (which used to be far more domestic, and thus this great and mystical trade flow adjustment)

Just as I (and many others) thought. - Common sense?

Sure slowly destroying the value of your currency will increase exports - but it will often increase imports faster. - Inflation increases the cost of imports.

Abenomics is (imo) dumbass Keynesianism in overdrive. - It doesn't have enough fiscal stimulus to be really Keynesianist, but it's more in line with it than QE.
 
gavinfielder said:


Good clip talking about abenomics in the first half.

I've slowly been gaining confidence in it. Seems to be working.
Click to expand...


Is that the same guy that put forward that Law - Economics has an equilibrium as well?
 
JP Hochbaum said:
Abenomics is not KEynes, lol. Please take a basic economics class that discusses Keynes. Abenomincs is MONETARY!!! It is a NEOLIBERAL agenda given to us by Milton Friedman!!!

from Friedmans own mouth:

http://faculty.chicagobooth.edu/joh...tary Economics PhD course/lecture_2_notes.pdf
Click to expand...

It should be noted that monetary policy is well within the realm of Keynesianism. What you are alluding to is the course of action, which was hypothesized to a greater degree by Friedman, i.e. unconventional monetary policy.

That is not to say DA60 has the slightest clue regarding modern macroeconomics.
 
JP Hochbaum said:
Abenomics is not KEynes, lol. Please take a basic economics class that discusses Keynes. Abenomincs is MONETARY!!! It is a NEOLIBERAL agenda given to us by Milton Friedman!!!

from Friedmans own mouth:

http://faculty.chicagobooth.edu/joh...tary Economics PhD course/lecture_2_notes.pdf
Click to expand...

It seems the Council on Foreign Relations (and a bunch of others) and various dictionaries disagrees with you.


'Abe's Keynesian-inspired plan, dubbed "Abenomics," takes a three-pronged approach to reflate the economy through monetary, fiscal, and structural policies.'

Abenomics and the Japanese Economy - Council on Foreign Relations


'Keynes·ian·ism noun \ˈkān-zē-ə-ˌni-zəm\

Definition of KEYNESIANISM

: the economic theories and programs ascribed to John M. Keynes and his followers; specifically : the advocacy of monetary and fiscal programs by government to increase employment and spending'

http://www.merriam-webster.com/dictionary/keynesianism



If you have a problem with this, I suggest you take it up with them.

No offense, but I really don't care that much.

I realize people on here LOVE to get into long debates about what words mean and what Keynesian or Austrian Svool or some other word/term means.

I am not one of them...couldn't give a sh@t.
 
Last edited:
Inflation is occuring because of energy imports, whch has little to do with Abenomics. Look at the U.S. for example, we are now exporting more energy than importing energy for the first time in 20 years and our energy prices went down and thus we actually experienced very small inflation of .1% in October.
inflation is not a monetary phenomona but a production phenomena.
 
JP Hochbaum said:
Inflation is occuring because of energy imports, whch has little to do with Abenomics.
Click to expand...

The nuclear power plants have been shut down since March, 2011--more than two-and-a-half years ago. Japan is looking at a major expansion of its trade deficit since then. What changed? Looks to me like the cost (in yen) of those energy imports.
 
Ahlevah said:
The nuclear power plants have been shut down since March, 2011--more than two-and-a-half years ago. Japan is looking at a major expansion of its trade deficit since then. What changed? Looks to me like the cost (in yen) of those energy imports.
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Uhhh you trying to be a parrot? lol
 
JP Hochbaum said:
Uhhh you trying to be a parrot? lol
Click to expand...

I would say I tend to agree with anyone who asserts that Japanese inflation is the result of one aspect of Abenomics, i.e. jawboning the Bank of Japan to buy more bonds.
 
Ahlevah said:
I would say I tend to agree with anyone who asserts that Japanese inflation is the result of one aspect of Abenomics, i.e. jawboning the Bank of Japan to buy more bonds.
Click to expand...

You should agree with the facts and real events, not some theories:

"Japan’s trade deficit last month nearly doubled from a year ago, official data showed yesterday, as soaring energy bills eclipsed an improving export picture.
Government figures showed that Japan logged a bigger-than-expected ￥1.09 trillion (US$10.9 billion) trade deficit last month.
The latest figure, a record for October, was nearly double a ￥556.2 billion shortfall a year earlier and marked the 16th straight month of deficit, the longest stretch in over three decades.
Energy imports surged after the 2011 Fukushima Dai-ichi crisis forced the shutdown of Japan’s nuclear reactors, which once supplied a third of the nation’s power.
A sharp decline in the yen, which is good for exporters’ profitability, has also forced up the cost of importing pricey fossil-fuels to plug the country’s energy gap.
Japan’s trade imbalance was largely due to the rising cost — and volume — of crude oil and liquefied natural gas shipments as well as surging purchases of electronic parts."

Japan trade deficit nearly doubles on energy charges - Taipei Times
 
JP Hochbaum said:
You should agree with the facts and real events, not some theories:

"Japan’s trade deficit last month nearly doubled from a year ago, official data showed yesterday, as soaring energy bills eclipsed an improving export picture.
Government figures showed that Japan logged a bigger-than-expected ￥1.09 trillion (US$10.9 billion) trade deficit last month.
The latest figure, a record for October, was nearly double a ￥556.2 billion shortfall a year earlier and marked the 16th straight month of deficit, the longest stretch in over three decades.
Energy imports surged after the 2011 Fukushima Dai-ichi crisis forced the shutdown of Japan’s nuclear reactors, which once supplied a third of the nation’s power.
A sharp decline in the yen, which is good for exporters’ profitability, has also forced up the cost of importing pricey fossil-fuels to plug the country’s energy gap.
Japan’s trade imbalance was largely due to the rising cost — and volume — of crude oil and liquefied natural gas shipments as well as surging purchases of electronic parts."

Japan trade deficit nearly doubles on energy charges - Taipei Times
Click to expand...

In October, 2012, Japan ran a trade deficit of Y556.2 Billion. This year it was Y1.09 trillion. The power plants have been knocked out since March, 2011. What changed in the last year? NOTHING, except Abe telling the Bank of Japan that its inflation targets were too stingy. Look at a one-year chart of the yen versus the dollar and you can see that, thanks to Abenomics, it takes more yen to buy energy this year than it did last year. Get off the Abetanic while you still can. It's about to hit an iceberg.
 
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