Of Interest

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Sunday, September 9, 2012

A Microcosm of Japan’s Tough Future?


A Microcosm of Japan’s Tough Future?

The population of Yubari in Hokkaido has shrunk more than 90% of its peak, services are vanishing and white elephant public works projects have left the greying inhabitants with a mountain of debt. Welcome to Yubari, Japan in miniature. 

If the city of Yubari is, indeed,  a glimpse of future Japan,  this may be what the Nikkei has been or starting to discount.  The index is still down a stunning 77 percent from its December 29, 1989  all-time high and has only managed a 27 percent bounce off the October 2008 low.
It’s the economy demographics,  stupid!

Japan has suffered through severe trials and tribulations, including the bursting of a real estate and stock market bubble, a prolonged depression,  and a tragic earthquake and tsunami.   One can only wonder about the social stability of, say, the U.S.  or other western countries if they were to experience the same scale of testing.  Just imagine a similar stock market nightmare which would put the S&P500 at 282.99 in August 2026.  Ouch!
What a testament to the non-entitlement  mentality of the Japanese people.   Godspeed, our Japanese friends.

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