In this video, Patrick Bet-David explains the economic impact of Japan’s “Lost Decade” and how a similar phenomenon could shape China’s future. Discover the similarities and differences between the two economies in this thought-provoking video.
On March 19th, Japan’s central bank raised the country’s interest rates for the first time in 17 years, from -0.1 percent to a range of 0 percent to 0.1 percent. The decision to do this followed a spike in wages following an uptick in consumer prices.
The country’s interest rates were slashed below zero in 2016 as a way to help the economy, which had become stagnant following the financial crisis.
The stock exchange of Japan, which is called “Nikkei,” reached its peak of 39,000 in 1989 and did not return until now. How is that possible?
Nikkei 225 Index – 67 Year Historical Chart
Learn the benefits of becoming a Valuetainment Member and subscribe today!
Comparatively, it took the US economy just a few years to recover twice over the past two decades.
In the 1980s, Japan’s property market was priced four times more than the US market. The Imperial Palace in Tokyo was worth more than the entire state of California.
Tokyo’s Imperial Palace (Credit: Getty Images)
From 1956 to 1986, the price of land increased by as much as 5,000 percent in Japan. Tokyo real estate could sell for as much as $139,000 per square foot, which was nearly 350x as much as Manhattan. Land constituted about 65 percent of Japan’s national wealth.
From 1945 to 1991, Japan enjoyed a rapid and sustained growth, becoming a global leader in the 1980s with the highest per capita GDP. Japan’s car and electronics companies led their industrial boom.
At the time, Japanese consumers also enjoyed a higher level of personal capital, with their ratio of savings to disposable income being 18.3 percent compared to 7 percent in America.
Watch the rest of Patrick’s video to learn what happened to Japan and why China might be following in their footsteps.
Shane Devine is a writer covering politics, business, and culture for Valuetainment. Follow Shane’s work here.
Add comment