What is an economy?

Every generation needs a revolution - an entrepreneurial revolution

The word economy is a big word.   We go back to Adam Smith.  and many other Economy guru.  

We talk about macro and micro economy

This post would tend to favor micro.  It is about a buyer and seller changing goods and currency, from producer to consumer    The activities could  be less or more. or plentiful

Growth means more transactions, stagnation means same number of transactions.   Decline or recession means less transaction

Sales activities have something to do with economy.

Sales makes the economic world go round.  

Challenges to Japanese Economy: stagflation, 30 years recession, high public debt

Every generation needs a revolution - an entrepreneurial revolution

ADB papers on Japan's 30 year recession/stagflation

Japan was poised as the 2nd biggest economy in the world in the 80s to compete with USA in word economic supremacy.  That did not happen

After the real estate bubble burst in 1980, Japan's economy was never the same:

1.  Inflation was high

2.  GDP growth stagnated

3.  Debt as % of GDP was at 260% (one of the highest in the world)

A slight mistake among theiri economic bosses would turn their currency into "Perang Hapon"as we knew the Japanese currency in WW2. 

Couple this with demise of big companies like Sharp, Toshiba, and weakening of car companies Nissan and Mitsubishi

Tis crumbled my admiration for Japan's management system and their supposed superiority in manufacturing and business.  This post discovered their vulnerability.   Beneath their glitzy city and tourist spot, all is not well for Japanese economy

As of December 2022, the Japanese public debt is estimated to be approximately 9.8 trillion US Dollars (1.29 quadrillion yen), or 263% of GDP, and is the highest of any developed nation. 43.3% of this debt is held by the Bank of Japan.  

(It has not beaten US whose public debt stands at $31 trillion)

From Researchgate: debt as % of GDP of nations

Its challenging to be optimistic in 2023

Every generation needs a revolution - an entrepreneurial revolution

Its a good idea to be optimistic and tough amidst the turmoil in 2023  But look around the external environment:

1.  Big banks in US and Europe failing  (3s in the States, CSB in Switzerland, Deutsche Bank next?)

     What follows, industries failing too?

2.  Europe and US are reported  to be in recession?

3.  The only way that Central Banks and US Feds can control inflation is to put the economy into

      recession -  lay offs so that the consumer will buy less;

4.  Big company closures in Japan:     Sharp, Toshiba, the scandal at Olympus cameras

     (It incurred big losses when it parlayed into stocks, and other unrelated non camera ventures; the

     only saving grace was the Olympus medical)

     Sharp company failure

     Inappropiate accounting procedures at Toshiba

     Japan's 20 year recession - ADB

     We are better off than Japan whose GDP growth was reported to be only 1%;  vs Philippines 6%

      Japan used to be our idol in the 1990s for growth innovation and management

Doomsayer - world wide recession in 2023

Every generation needs a revolution - an entrepreneurial revolution

Many experts:   Robert Kiyosaki, banks (BoA) World Bank  many YT videos predict of impending world wide recession due to China problem with Covid, world wide inflation due to US Fed increase of interest

rates, impending illiquidity of big banks (due  to countries saddled with huge deficits and debt to to GDP ratio which incudes Japan and USA (over 100% - Phil at  60+ still looks healthy

We still do not know for sure how true these predictions are (but even Feng Shui experts seem to affirm that 2023 is going to be bad.)

But we must be resilient and dig in defensively:    hold on to commodities - gold and silver and  real estate.   Currency may be worthless   We can end up like Nigeria or Venenzuela  (In Venenzuela, a Big Mac cost millions)

https://www.worldbank.org/en/news/press-release/2022/09/15/risk-of-global-recession-in-2023-rises-amid-simultaneous-rate-hikes

How come Japan is into negative territory?

Rizal Philippines
April 24, 2016

Japan has again fallen intor recession

Japan has been into recession (contracting economy) for several years now.  The President IMF, LaGarde is worried not so much with less developing countries but with Japan. Japans public debt is 237% of its GDP, the highest among developed countries - WSJ  Although yen is now the darling of world currency, she was worried about too much debt of Japan, although mostly yen denominated (US has plenty of debt too - almost trillion dollars)

And its giants like Nissan, Toshiba, and Sharp have been taken over by foreign partners.  Of late, Mitsubishi is in trouble because of its alleged cheating on emission tests (like VW)  Because of the recent earthquake at Kyushu, giant car makers Toyota and Honda have ceased production because of disruption of supply chain.

From Japan Times - Sharp and Toshiba face dire prospects

The combination of  natural calamities, (earthquakes) aging population plus mistakes in fiscal and monetary policies have brought Japan into this challenges.  Let us add management complacency and smugness.  The Japan tiger of yore has become slow, and probably unmindful of world developments which included China.  The Japanese management and technological prowess on Kaizen, QFD, Gemba, TPM 5s was overcome by cheap and mass produced products from China. Everybody was caught unprepared.

Some say that loss of entrepreneurship fueled by conservative Japanese banks who favored large and and ongoing concerns, contributed to loss of innovation and change in Japan.  The likes of Akio Morita of Sony and Konosuke Matsushita who were for sound management and innovation was gone.