Losing the war with Japan Pt.1 (modified) .mp4
Jesse Colombo This article was written on June 4, 2012.
In the 1980s the end, following a long economic miracle three decades, Japan has seen its economy infamous bubble with the stock and real estate prices have reached stratospheric heights driven by speculative mania Nikkei the average Japanese shares reached a record level in 1989, falling down dramatically shortly after, causing their housing bubble collapse and throw the country into a severe financial crisis and a long period of economic stagnation known as the lost decades.
very traditional society of Japan has undergone significant changes after their defeat in World War II because, in part, to westernization influences Allied occupation forces Molasky 1999 The Marshall Plan of the United States provided aid to rebuild the Japanese economy and the two countries improved relationship created an opportunity for Japan to export products manufactured in the United States increasingly affluent.
The Japanese industry was first dominated by the major industrial and financial conglomerates controlled by the family known as the Zaibatsu reflected in the financial clique, which developed into business conglomerates keiretsu in the second half of the twentieth century typical keiretsu conglomerates were organized as a series of interlocking industrial societies organized around a Japanese bank, which has provided banking and financial services to industrial companies most companies in a keiretsu conglomerate wore name which were global brand name versions of their keiretsu, for example Mitsubishi Bank, Mitsubishi Corporation, Mitsubishi Heavy Industries and Mitsubishi Motors other examples of keiretsu conglomerates Sumitomo Mitsui, Fuyo, Dai-Ichi Kangyo and Sanwa Wikipedia, nd from the 1950s and accelerated during the Japanese bubble, the keiretsu companies bought shares of the other to form a vast network of cross-shareholdings, a practice that was considered important to ensure long-term stability and development of lasting business relationships d.
keiretsu conglomerates have received a very high level of support from the Japanese government a crony capitalist system that became known as Japan, Inc., which was both revered and reviled by commentators and Western leaders for his unfair advantage on domestic firms.
Japanese industry got its competitive advantage by copying Western products, improving them and sell them to the West to lower prices to compensate for their relative lack of natural resources, Japanese companies have focused on developing innovative and efficient manufacturing methods and improve the quality of their products, giving Japan a competitive advantage in high value-added export products such as cars and electronic BPIR 2002 end of the 1970s, the use Japanese assembly line robots in the automotive industry who has committed a non-existent human error and boost overall quality, sent shivers throughout the US auto industry, which was still assembling cars by hand Furthermore, the energy crisis bearing 1970s have reduced the attractiveness of the traditional energy-V8 Car American style and have increased considerably consumer interest in smaller, more energy efficient vehicles made by Japanese automakers such as Honda and Nissan Datsun now.
In the 1970s and 1980s, Japan has extended its dominance in the global electronics industry as it has made most consumer electronics products in the world and has introduced new innovative and revolutionary products such as radio transistor pocket recorder VHS and Sony Walkman, which created a consumer love affair that was similar to the Apple iPod and iPhone craze of recent years, the Japanese electronics manufacturers have also set up a strategic foothold in the computer hardware industry booming, almost monopolize the market for semiconductor chips, circuit boards and other computer components almost everything except for the production of CPU chip, which was still dominated by US companies in the 1980s, many people believed that Japanese companies Sony and Hitachi would eventually acquire American trade electronic caine Intel trend indicators and the role IBM Japan as king of the global electronics industry was solidified after the US video game industry has experienced SEV before the bust in the early 1980s, creating the opportunity for the Japanese video game power plants Nintendo and Sega CORNER virtually the video game market explodes.
economic miracle of the late twentieth century caused the country standard of living to soar among the highest in the world and its people have the longest life expectancy in the world of Japan in the 1980s, GDP Japan per capita rivaled or even surpassed many Western countries and the country has become the largest Japanese men creditor nation in the world clamored working salarymen or white collar professionals for keiretsu companies in the country Although salarymen worked very long hours and should provide greater loyalty and sacrifice of their society, they were rewarded with the lifestyles of the middle class background and promise of lifetime employment an important step in place a very modest life most Japanese lived before the Second World war.
Japan's economic boom in export postwar and strict fiscal policies that were designed to encourage household savings resulted in a cash surplus in the banking system of the country which ultimately leads to more lenient lending trade surpluses healthy country and the Plaza Accord in 1985, which sought to weaken the US dollar against the Deutsche Mark Yen and German, has caused the currency Yen appreciate against other currencies, making investments foreign capital relatively cheap for Japanese companies.
The combination of excess liquidity in the banking system, financial deregulation and the country's export miracle eventually led to overconfidence and excessive optimism in Japan's economy, which has become the second largest economy in the world after the United States in decades banks have begun to take the risks increasingly excessive that were partially funded 186000000000000 value yen borrowed from various financial markets.
Nearly 40 billion was invested in buyouts in risky leverage the United States, including 40 of the amount used in the acquisition of RJR Nabisco, which ended in the biggest corporate scandal in the United States the time and became the theme of the book and film Barbarians at the Gate Watkins, 1994 in 1990, a group of Japanese companies have acquired the golf course Pebble Beach, causing the US Open a tournament prestigious golf playing on a golf course owned by foreigners for the first time New York times, in 1990 other famous American institutions acquired by Japanese commercial interests were Rockefeller Center and Columbia Pictures in Hollywood Powel, 2009.
Overconfidence and the Bank of Japan monetary policy accommodative mid-1980s to the late leads to aggressive speculation and national real estate stocks, pushing the prices of these assets to unimaginable levels from 1985 to 1989, the Nikkei stock index of Japan tripled to 39,000 and accounted for over a third of the economist of the market capitalization of the world, 2011 keiretsu conglomerates practice of each other cross-ownership of shares has played an important role in increase in inventories and caused the wealth of Japanese companies ball with stock prices also many Japanese companies have practiced a corporate invention known zaitech or financial engineering, where speculative profits and gains capital were reported as income on the financial statements zaitech-practicing companies received low-interest loans and used them to buy stocks and real estate, which surged and helped companies to report earnings spurt as long as asset prices continued to r ise At one point, it was estimated that an incredible 40-50 of Japanese corporate earnings were derived from e zaitech at the height of the bubble, a 1989 survey of institutional investors showed that the majority of them did not believe that the Nikkei was Barsky overvalued, 2009, p 32.
house prices experienced a similar manic action with prices in the first of Tokyo rising to levels that made them 350 times more expensive than comparable land in Manhattan, New York, 2010 Investopedia earth under Tokyo Imperial palace has been rumored is that as much as the entire state of California in the same year Impoco, 2008.
Soaring stock and property prices have generated staggering amounts of wealth of the bubble in Japan, part of which found its way into the art market and created a bubble of art prices records were paid famous works of Western art in 1987, a Japanese insurance company paid nearly 40 million Vincent van Gogh Sunflowers a version that was later claimed to be made a false This was overcome by Ryoei Saito, a billionaire from the paper industry, which paid 82 5 million to another painting by van Gogh, Dr. Gachet he admitted that he paid 30 million more than it had expected, but he did not care because he wanted so anyway Associated Press, 1998 wealthy Japanese tourists has become an ever-present camera in the high-end auction houses, art galleries and luxury shops cities like New York and London.
In 1989, Japanese officials have become increasingly concerned about the growth of the country's asset bubble and the Bank of Japan decided to tighten monetary policy Soon after, the Nikkei stock bubble popped and fell near 50 of about 39 000 to 20 000 over 1990, hitting 15,000 in 1992 by the Japanese stock market bubble imploded also popped the housing bubble in the country, creating zaitech back and throw the country into a deep financial crisis and put an end to the old economic Miracle of three years in its tracks.
Japan deteriorating competitiveness against other Asian exporters, including China and South Korea, and regularly deflate stock prices and property during the 1990s and 2000s led those decades being called lost decades During this time, many unprofitable businesses and screened debts were buoyed by frequent bailouts from the government, leading to their nickname, the Zombie companies in 2004, residential real estate in Tokyo was worth 10 of its peak of the late 1980, while the most expensive land in the district of Ginza in Tokyo business had fallen just 1 of its 1989 level in the same year Barsky, 2009 as well, the Nikkei stock index is currently trading around 10,000, just over a quarter of its peak has been over two decades since the bursting of the Japanese bubble economy and the country is toujour s actively struggling with deflationary forces that are so powerful that the near zero policy interest rates of zero interest or ZIRP, repeated episodes of quantitative EASI ng some call printing money and constant interventions Yen-weakening currency has barely made a dent.
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Japan's bubble economy of the 1980s, Japan's bubble economy, 1980.