I take prognostications from Japan with a grain of salt. Following the devastating 1994 earthquake in Northridge California (Magnitude 6.7), a team of Japanese engineers published a scathing commentary in which they claimed Japanese construction standards were vastly superior to America's, and comparable damage would never have resulted in Japan. I believe it was one year and one day after the Northridge earthquake that Japan suffered its own earthquake of nearly identical proportions (Magnitude 6.9). Damages and fatalities in the Kobe quake were far worse than those in the US a year earlier.
So much for the geniuses in Japan.
That said, I don't totally ignore what the Japanese have to say about the economy either. They've had reason, after all, to take a serious look into the causes and effects of major economic collapse. Neither the United States nor China have been so inclined in a very long time.
China bubble in 'danger zone' warns Bank of Japan
China risks a repeat of Japan’s boom-bust disaster 20 years ago as exorbitant property prices combine with a demographic tipping point, a top Japanese official has warned.
Richard Koo, from Nomura, said worries about China’s slowdown have spread from financial markets to national security officials.
By Ambrose Evans-Pritchard, International Business Editor
9:06PM BST 21 Aug 2012
Telegraph.co.uk
“China is now entering the 'danger zone’,” said Kiyohiko Nishimura, the Bank of Japan’s deputy-governor and an expert on asset booms.
The surge in Chinese home prices and loan growth over the past five years has surpassed extremes seen in Japan before the Nikkei bubble popped in 1990. Construction reached 12pc of GDP in China last year; it peaked in Japan at 10pc.
.
.
.
Japanese stocks have fallen by 75pc and Tokyo land prices by 80pc since the economy first began to slide into a deflationary trap two decades ago, although real per capita income has held up well. Any such fate for China – a much poorer country today than Japan in 1990 – has shattering implications.
Such a warning from a Japanese official may ruffle feathers in Beijing. The Communist authorities have studied Japan’s Lost Decade closely and are convinced they can avoid the same errors.
More: http://www.telegraph.co.uk/finance/financialcrisis/9491069/China-bubble-in-danger-zone-warns-Bank-of-Japan.html
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
| 