Why Japan Is Heading To Bankruptcy

Japan is on the brink of bankruptcy. Here’s why the country is facing disaster, and how it could spill over into the United States.
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Got a "why" you want answered? Give us your questions here:

[Richardcarlett]

Bankruptcy is a legal process that individuals or businesses can undergo when they are unable to repay their debts. It provides a framework for financial relief and a fresh start. There are different types of bankruptcy, such as Chapter 7 and Chapter 13 in the United States, each with its own rules and implications. Bankruptcy can have long-term effects on one's credit and financial standing, so it's essential to carefully consider the decision and seek professional advice when facing overwhelming debt.

[javabean]

Prosperity is gained through production. In the 1600s, Spain raided over 100 tons of gold and 25, 000 tons of silver from the Americas. They thought this made them "wealthy", when in fact all of that "wealth" put them headlong into a depression that led to the decline of their empire. They had so much "currency" that they stopped producing goods, choosing instead to buy them from their adversaries. Eventually they ran out of gold and silver, and their population was not able to resume producing goods that others wanted.

You can only buy your way out of a financial crisis for a very short term. Then either the money runs out, or you print so much money that it's worth less than the paper it's printed on. Either way, you're betting your future against long term stability.

[AAAXYZ]

I appreciate that this channel values my time by making short videos. Short videos are more difficult to make than long (20 min) videos because you have to get concise information into less time while still being clear. Such editing demonstrates that care has been taken and that clarity of thought is important to this channel. Thank you.

[SardonicDog]

You cannot print yourself out of recession.

[stevenscott]

It's amazing how, despite the long and vivid history of failures by governments and other large organizations, people are still so eager to hand over control of EVERYTHING to them. Our laziness is truly epic.

[luongo]

When I was in MBA School, I was the black sheep for advocating for the Gold Standard. Had we been on the Gold Standard, NONE of this nonsense would have taken place.

[billF]

I guess Japan didn’t pay attention to what we did.

[darkaxel]

Let's not forget what led the Japanese economy into ruin: Overinflated real estate valuation. At one point, the city of Tokyo was said to be worth more in real estate than THE ENTIRE UNITED STATES. All of them. Their entire economy was pretty much based around real estate loans secured by assets overinflated in value to the point of ridiculousness.

[emanuellepiz]

You should do an episode of Javier Milei and why his economic policies are working. It could be a follow up video to the one you did about inflation in Argentina a year ago

[petuniasevan]

Japan is an extreme example of what happens (among other things of course) when a population has a very low birthrate and ages out. There's fewer new workers to generate commerce, tax funds, and buy goods, all the things that make an economy run. Pair that with the huge percentage of elderly in Japan: about 30% of the population is over 65 years old. This means that in the next thirty years, Japan's population will drop drastically to under 100 million people unless birthrates rise. The elderly have to rely on support (fewer younger people to support them), the children being born are way too few to stabilize the population, and the economy is being propped up by stopgap methods that WILL eventually give out with no recourse.

[AustralianGovernment]

Every country wishes to be a developed one, but it's almost as if as soon as any country becomes developed, it starts facing problems which are seemingly impossible to get out from.

[latte]

Japan is literally dying. No works, lot of part time workers, slavery and more pain😭😭😭😭

[BillHimmel]

"There are four types of economies: developing economies, developed economies, Argentina and Japan". Let's be honest: nobody understands why Japan isn't suffering from hyperinflation after these decades of money printing!

[mikerevendale]

Unfortunately, the censors on this platform don't like us discussing key topics, such as who owns most of our debt. It's not other foriegn nations but a banking cabal that's not part of our government at all, even though it pretends to be otherwise. And that entity could assume any of our foriegn debt effortlessly, unless they deem it's time to topple our nation. It's unsettling to ponder that we've given that kind of power to a foriegn, self-serving entity.

[robdavidson]

I used to read The Economist magazine until they started push lefty agenda and grip about that "awful out of dats document" the United States Constitution.. You have explained the Japanese and American economic ties in clearer and simpler language and at much less cost than the Economist ever did. Thanks. Keep doing what you're doing.

[joejackson]

Excellent. Also demonstrates Nixon's greatest mistake. Which was not Watergate, but taking the US currency off the gold standard. Rule 1 of currencies, if the paper is not backed by a tangible worthwhile good(s), it is just paper and it's value is an illusion.
Though admittedly the problem with hard assets, they have to be converted to cash, before you go to the grocery store.

[clearviewmoai]

Japan's downfall began when the Japanese stopped producing more Japanese. The only sure way to prosper is to be fruitful and multiply in strong families.

[robertalaverdov]

Keynesian cultists will say that Japan is doing fine despite having a +200% debt to GDP ratio. What they don't tell you is that In 2023 Japan spent 22% of its budget on servicing its debt and by 2034 it's expected to hit 47%. And with a declining population and stagnant economy it won't be long before its debt payments outpace its ability to pay. Japan has essentially sold out its future for a better present day. The basic rules of economics 101 still apply; there is no free money, it all has to come from somewhere.

[nealdenison]

Does anyone think history won’t repeat what happened to Germany after WW1 when it went the printing money route? Nick knows

[elielful]

Hayek was the best economist in modernity but no one listened