Economically Yen Appreciate

Japan smth like mercantilist

Interest rate goes up because people keeps buying cost of living, prices,
wages, production goes up, making it very difficult for things to be produced in
Japan.
Factories all moved out to other countries where cost was cheaper
employment goes up lower purchasing power lower demand
Government depends on macroeconomic policies (lower interest rates) to handle
the problem to increase stimulate purchasing power.
Current Issue
- Banks are stringent in lending money now, because afraid that clients keep
eating into their capital, costing the share markets to drop. Then the
shareholders will go after the banks.
2. Deflation prices fall consumers will not buy with the perception that
things will go even cheaper in the next round.
In order to simulate demand, govt lowered the interest rate even lower hoping
that the people will go to the bank to take out loans to buy cars, furnitures etc
so this increases business peoples confidence the business people will start
hiring employees once more.
The response customers dont want to spend because afraid that they will be
retrenched soon banks instead put the money in the Federal Reserves to drive
up the capital.
**Japan once had negative interest rates (charge you for saving money) in order
to deter people from saving money.
**US keeps printing money and now the value of money is no longer backed by
gold so one day the value of USD will drop in value.
If the value of money drops and when people have no confidence in the
economic system, we would go back to gold.
3. Demographics
- Birth Rate low, Retiring People rate high. With birth rate low, less people paying
tax, government has no revenue, there would be not enough retirement fund for
the retired people.
- Immigration Japan is a very homogenous society, not open to foreigners .
Attract young people to come in. The culture should be that if you are talented,
people should accept you. Individualistic based on merit.
** Singapore is now encouraging immigrations.

- Innovation Attract young enterprise, creative people. Attracting blue collar

labour would not help only keeps wage rate low.
4. Benefits, cost and risks.
Benefits: Tourism
Cost: Japan cost is still high
Risks: Aging Population
5. India = migration from rural areas to urban areas, larger population,
Bad = Terrorism, corruption, power struggle,
Conclusion = INDIA IS BETTER