The strong economic growth of the 1970s ended abruptly at the start of the 1990s. In the late 1980s, abnormalities within the Japanese economic system had fueled a speculative asset price bubble of massive scale by Japanese companies, banks and securities companies ... The combination of exceptionally high land values and low interest rates briefly resulted in heightened liquidity in the market. It led to massive borrowing and heavy investment mostly in domestic and foreign stocks and securities ... A debt crisis followed and the Japanese banks and insurances were now loaded with bad debts. The financial institutions were bailed out through capital infusions from the government, loans from the central bank and the ability to postpone the recognition of losses, ultimately turning them into zombie banks ... these banks kept injecting new funds into unprofitable "zombie firms" to keep them afloat, arguing that they were too big to fail ... However, most of these companies were too debt-ridden to do much more than survive on bail-out funds... Many Japanese firms were burdened with heavy debts, and it became very difficult to obtain credit. Many borrowers turned to sarakin (loan sharks) for loans... The 1990s therefore was the "lost decade" when the economy contracted or grew at a paltry rate... Unemployment rates were high, but not at a crisis level... With the traditional Japanese emphasis on frugality and saving, an impact on an average Japanese family was quite limited, whose standard of living did not deteriorate significantly from what it was in the 1980s... Despite the economic recovery in the 2000s, conspicuous consumption of the 1980s such as lavish spending on whiskey and cars did not return for the most part... Many Japanese companies replaced a large part of their workforce with temporary workers, who had little job security and fewer benefits... As of 2009, these non-traditional employees made up more than a third of the labor force. As of now, the nation's economy has not fully recovered from the 1991 crash...
At its height (1990), Tokyo's retail store space was going for $10,000 per square foot (I have not confirmed this number), this is way too high for any retailer to turn a profit. In the end, the economy tanked and never recover since for the next 20 years and now going towards the next 10 more years (please enlarge and read the graph). I believe another 10 more lost years is not impossible for Japan.
My partner-in-crime always reminded me that property prices cannot be infinite. At best, it can rise is at the rate of the GDP. Otherwise, the risk of having lost decades is real.
When one's pension fund disappeared due to speculative binge in the States in the not-so-distant past, 2009? $360b? One is hard pressed to replace the pension funds lost. The suggested way was to inflate his way through excessive increase in property prices. With the increased property prices, we do have a problem, we need great consumption to support the increase in rentals. Feverish importation of bodies into the fucken little island was the final result.
With priceless pigeon holes going at $1.2m per pop, I wonder how long more before this joke starts to get going. With lost decades in place, I am sure we will have lots of fun.
I may and do sound vindictive. After all, I am but a finest product of that fucken little island too. Hopefully, a phoenix may rise from its ashes. But, I am not too optimistic.
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