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Wednesday, April 3, 2013

Japan – Too Old To Grow?

 

The Japanese Social Security system has a report out on the aging problem in Japan (Forbes link).  That Japan has a rapidly aging population is an old story, but the new numbers are worth considering.

 

Japanese Work Force

2010 = 82m

2025 = 71m (-13%)

2040 – 58m (-30%)

 

Japanese Total Population

2010 = 127m

2050 = 80m (-37%)

 

Japanese Aged Population

2010 – 11% of population is 75 or older

2025 – 22%+ will be >75 (Double)

 

I defy any economist to show me a road map for Japan that does not lead to crisis based on these numbers. I don’t care what Abe says, or what the new head of the Central Bank, Kuroda, does. It will not matter.  As a country, Japan is a long-term short.

Japan’s pay-as-you-go Social Security system will rob future worker’s paychecks. The cost of medical care for the +75 group is 5Xs that of younger citizens. Budget deficits to pay for all this will have to explode, the national debt with it.

There have been dozens of rallies in the Nikkei the past 23 years. With each rally, the bulls came out and proclaimed that the bottom had been set. The current rally is no different. The thinking by many is that a new golden age for Japanese stocks is upon us. I find that hard to believe. I don’t care how much money Japan prints. Those printing presses can’t offset the powerful force of demographics, at least not for long.

nikkei

 

 

There are always different views on Wall Street. There are plenty of folks who love Japanese stocks, believe that printing money solves all problems and that demographics don’t really matter at all. Time will tell.

 

bloomberg

 

cnbc

 

bi

 

krugman

 

WSJ

 

bloombergII

 

bullbear.bk

 

 

 

 

Comments

  1. It figures that MORON Krugman likes the idea of endless debt, endless political spending — and stick future generations with the bill.

  2. I know, you know, Bubba Joe knows, that it is wrong and will not end well. But having said that, I’ve lost almost all of my investment monies “betting” against the FED over the years. The bastards will control the markets here as well as Abe in Japan, and money will be made. …..unless you are like me, foolishly thinking that there is still a smidgeon of honesty to pull you thru.
    Make it while you can, but be prepared to jump at a moments notice.

    • How many times have we heard that line before? Don’t worry about the smoke, keep partying, we can all run through the fire exit at the last minute. Or the famous words of that jack@ss who ran Citibank into bankruptcy: As long as the music is playing, you gotta dance.

      I don’t expect the FOMC criminals to have a sudden epiphany and become honest. But I do think that people who fall for the exact same scam over and over are dumb. We all know how this will end — even Bernanke knows his policies will end in ruin (and he doesn’t care).

      The part we don’t know is why anyone still wants to play his game? Guess what happens to the Goldman Squid and all the Congress members they own when clients pull their money?

      It happened before (in the 1970s), and it will happen again soon. Assuming we can all fit through the fire exit at the last minute though… that is dumb.

      Still listening to con-artists like Krugman? Then you deserve to suffer. Don’t expect a bailout or food stamps. Expect to be a debt slave, working your entire life to pay off Krugman’s debts. No whining, no crying, no pleas for sympathy. You voted for Krugman policies, you deserve what you vote for.

      • Bubba Joe,

        A very interesting point. Very interesting indeed.

        Chuck Prince was the dancer you refer to. I imagine his cumulative compensaton was pretty damn good over the years. Way better than the muppets that followed him. I wonder what would have happened to him if he had tried to scale back risk taking in 2005? My guess is he would have been fired. Revolution from within by the MDs in the what used to be called Salomon.

        Stan O’Neill. Another genius. What else can you call a man who single-handedly broke ML. My recollection was that he cashed in for well over 100mn. Thats USD. The penalty for destroying other people wealth is making your fortune!

        So the bottom line is that no one actually wants managers who can read writing on the wall. They want another fool like themselves only in a better suit.

        Are you really that different? You see, no one cares about the right thing. They care about easy money. Always did.

  3. Pretty much the same situation in the USA (a few years back) — yet a certain blogger (ahem) keeps trying to tell us Social Security can be saved

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