Japan does not need to worry about unemployment even if interest rates are raised if interest rates are raised， “zombie companies” will be eliminated and there will be “no sadness．”
After 30 years of ultra-loose monetary policy by the Bank of Japan, even a slight interest rate hike could lead to an accelerated weeding out of “zombie companies,” which are unable to pay their debts, and this could lead to an accelerated weeding out of these companies. Zombie companies are defined as businesses that are unable to cover interest payments on their loans with operating profits alone, and have survived for many years thanks to Japan’s low interest rates and government support. Zombie companies, which are unable to invest or hire personnel, hinder the creation of new businesses and impede employment mobility. Clearing out zombie companies isn’t such a bad thing and could free up space for healthier new companies to enter the market, said Nicholas Smith, a strategist at CLSA Securities. Smith said that “there will be no sadness” if all the zombie companies go bankrupt, and that “in Japan, there is no need to worry about unemployment, and rather, the most worrying situation is a serious labor shortage. For details, see source 2024/10/22.
>>1 If companies go bankrupt, it will be harder to get hired and the number of unemployed people will increase. The Bank of Japan’s monetary easing is intended to promote consumption among the working generation, whose spending has shrunk due to aging. If interest rates are raised, consumption among the working generation will decrease, leading to a recession, and the high prices of goods imported from overseas will continue to weigh on consumption.
If interest rates are raised, complaints will come from the upper class of Japanese who are investing in Japanese stocks.
0024Use the printed yen to reduce consumption tax and social insurance premiums.Oct. 23, 2024 (Wed) 23:36:37.90ID:TVN8APpF0(1/2)
>>3 International interest rate hikes are done to lower inflation, but Japanese interest rate hikes are done as a religion. The tax hike has led to poor sales and prices being cut, so the core-core CPI has already fallen below 2%. While other countries continued to experience inflation for decades, Japan continued to experience deflation for decades, resulting in a huge gap with other countries. Current interest rate Japan 0.25 ← Japan is the cheapest country with the lowest inflation rate among developed countries, but religion has caused interest rate hikes and a major recession where products with a CPI below 2% don’t sell. United States 5.5, Eurozone 3.65, Canada 4.25, UK 5, Australia 4.35, China 3.35, South Korea 3.5, India 6.5, Brazil 10.5.
Where does this strange idea of protecting zombie companies come from? What Japan needs is improved productivity. There is almost no interest right now, so there is no growth at all. We need to normalize quickly and encourage productivity growth.
In these threads, there are occasional idiots who try to increase productivity, but production volume depends on consumption, so increasing productivity in a low-consumption society means promoting high volume at low profit margins, which is a stupid idea that would promote deflation under deflation.
>>10 It depends on the economy In other words, it’s the politicians’ fault So it’s not worth voting for active politicians Except for those who keep saying we need to stimulate the economy properly.
>>10 In economics, labor productivity is the number obtained by dividing “sales, profits, or added value” by “number of employees, amount of labor per hour, etc.” This does not mean that production is efficient. In a deflationary economy, productivity is low, and in an inflationary economy, productivity is high. In Japan, where domestic demand is in a deflationary state, it is inevitable that industries that depend on domestic demand have low productivity.
>>18 Demand can be stimulated, not just by waiting for rain. Reducing the content and lowering the price is also a way to increase production efficiency.
Schumpeter now lol So it doesn’t apply to the Japanese economy. Haven’t you seen the reality that the trickle-down hypothesis was defeated miserably in Japan recently?
If interest rates are raised, the national finances will be in trouble as the government will have to pay more than 1000 trillion yen in national debt.
The bosses at zombie companies just run away with their money, but the lower-level people who follow them die lol. We need a law that allows us to confiscate all the assets of the higher-ups lol.
>>27 It’s a company that’s practically dead, like a zombie. Zombies are run by mysterious forces, but zombie companies are only run by government support, etc. If that is no longer available, they’re dead.
First of all, 90% of the world has a fixed exchange rate system or a common currency. Only 10% have floating exchange rates and manage their own currencies. There’s a reason why it’s only 10%: there’s no benefit to doing so.
It may be good for Mr. Smith, a foreigner, because it will make it easier for him to enter the market, but there is Japanese manufacturing involved, so we need to protect it.
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