Many thanks this morning to commenter "Troy." He has increased the value of my hastily-set down, half-formed opinions with links, supportive statements and counterarguments.
Though I value all of his comments--and hope my readers do likewise--I would like to highlight two of his most recent contributions.
The first is the link to the Ministry of Finance's English-language brief Japan's Fiscal Condition. While an update is due, the paper nevertheless provides an invaluable review, in just a few pages of graphs, of the background to the decisions being made regarding the country's finances. If you ever want, as I do, to rid yourself of the "It is my understanding that..." disease, going over this paper is a great first step.
The second contribution is a graph of the size of Japan's 25-45 years-of-age cohort (Link). While I for selfish reasons despair at the narrowness of the window described, Troy's graph does show the fundamental macroeconomic problem: the swiftly falling numbers of persons in the top consumption years. Reductions in Japan's productive capacity can be made up with increased participation of women in the workforce, delayed retirement and increased productivity. However, the loss of domestic consumption is an issue the government and business either fail to grasp or want to face.
One big victim of the shrinkage in the domestic market will have to be keiretsu tribalism. That Japan's markets are not free -- that purchases by either corporate consumers or individuals are guided as much by keiretsu loyalties as price or quality -- can be accepted and acceptable as long as the domestic market is growing or stable. The reality of a shrinking market -- that in order to keep sales on the same level, one must make inroads into a competitor's customer base -- is not something Japan's established businesses want to think about.
However, do not make any investments based upon the above. No matter how inevitable the collapse of a large institutional structure, it will survive longer than reason dictates or suggests.
Video: A Look at North Korea from its Neighbors
7 hours ago