Politics
Out of context: Reply #15535
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- TheBlueOne0
"I am def. no economist - how the hell did japan gain the leverage to own so much of our debt? " - bonseff
I'm no economist either, my degree was in comparative politics. But I was in college during the late 80's early 90's. The big economic menace then? Japan. At least according to the Milton Friedman/Chicago school. They of course got it wrong. You had books like this:
http://www.amazon.com/Coming-War…
Silly in retrospect.
But Japan was a very wealthy country by essentially playing the role that CHina does now for a good portion of the late 50's through the 70's. Japan built a huge economy on increasingly innovative products and cheap manufacturing. What you'll notice is that since the US has the global reserve currency anyone with growing assets tends to put those holdings into dollars or US assets as they are deemed "safe" in the long term. Also Japan had a huge real estate bubble fueled by it's banks in the late 80's through early 90's. (sound familiar?) It was during this point when Japan also acquired alot of US assets as companies turned what became useless, overvalued Tokyo real estate investments into cash and then into investmests in the US. Japan also dumped alot of money into useless and really ugly infrastructure projects to keep the economy from overheating at the time (the way China is doing now btw).
Japan is still the world's 3rd largest economy, but thats been slipping and will probably continue to do so. As Japan's economy cooled after it's real estate bubble in the 90's China has become the increasing primary buyer of US investments as assets for the same reason - the apparent safe (ROI) nature of assets of the global reserve currency holder.
Same way a small nation like Britian became an empire - the Pound was the reserve currency for quite along time before it was superceded by the US$. Geographical size doesn't necessarily scale to economic might per se. Population and demographics have a huge role as well.
So essentially getting rich off of a lucrative manufacturing base in one phase, then when that cooled, making huge profits off inflated real estate values - and then dumping all the reserves into US investments (bonds, treasuries, real estate) to retain value is how Japan got to be major holders of so much US debt. Now they are forced to continue to buy into and prop up the US debt to retain the value of their own investments.
Like the saying goes - "I owe you $10,000 that's my problem. I owe you $1 billion dollars, that's your problem."
- "Comparative politics", then what the fuck are you doing hanging out on a design website for flashing your********
- political wares, Jesus fucking Christ dude... if you're so damn smart, and want to show off head over to a Politics site********
- I'm pretty sure you'll be able to circle jerk over at CNN Blog comments and fight at Fox, but maybe you're afraid, lol!********
- because I gave up academics for a highly lucrative career in front end web design.TheBlueOne
- it was the 90's and the web was far more exciting than the bullshit that was in DC at the time...TheBlueOne
- gracias, señorBonSeff
- That's just a back of an envelope answer. Probably do some more reading online to get a better handle BonseffTheBlueOne
- better yet, read into "Chicago Democratic Corruption", then look at Obama********
- "Comparative politics", then what the fuck are you doing hanging out on a design website for flashing your