Now at this serious recession or remaining financial crisis time, some say US dollar will fall drastically in the 2 or 3 years and America will experience crazy hyper inflation then. If it really happens, not only world economy but also world order will have to be reset, no matter if it’s better or worse.
On the contrary, now Japan is struggling in serious deflation of economy. Many of the countries are worried about inflation, but in Japan, things are going different direction.
Japanese people are now afraid of reduction of income, which make them refrain from new purchase activity. In order to sell more things, makes or supply side will be involved in price down competition. If the deflationary policy effects well, upturn of economy might be expected.
But the basic problem of Japan is that demand is not enough. So the price down policy is not working for a long time. To make next demand, suppliers must let the price down more and more.
People could be happy at the time of price down, on the other hand, makers of products are faced with sales down by the price down. It means most of the Japanese companies will be in red balance or sales down. Next, comapanies must cut the salary of workers down to run in black. Finally, the workers or the consumers will be faced with serious income down.
Then, consumers will again refrain from buying things, which lead the deflation into never ending games of shrinking economy.
This is called Deflation Spiral.
Japan is apparently in this deflation spiral, which means economy of Japan is on the sliding-down slope without stopping unless someone stops this bad circulation.
Recent economy news of Japan, we often hear the word, Deflation Spiral. If this situation continues, Japan will have to reset before American dollar’s problem really happens.
In Japan, there are many interenationally working companies, but they also work for domestic sales. If Japan keeps losing consuming power at this speed, companies of Japan will have to leave Japan to other countries with more demand, maybe like China or India. It means Japan loses the innovation power and technology arising from inside because the companies going overseas start working with local labours, and the human power will be grown there, not in Japan.
I’m not sure how it would be on this problem, but more or less, Japan must change the industrial structure because demand is certainly going down with the decreasing population. There is no increase of demand where the population is less.
Japanese big time might be over in the sense of economy, I personally think that Japan should choose the future more on the mental satifaction, not on the business expansion.
Actually, people of Japan are enjoying new pop cultures like anime, movies and music, also they are happy to enjoy new stlyle meals with enconomy price. Some enjoy working for own agricultural produce, and some don’t choose the high education to be more skillful from younger age.
Japanese people now need their own ways. I know it’s hard for them though.