Tuesday 19 February 2013

When Singularities Become Serious

As a change from short items the link below is a longish and heavy duty post from “Don’t Shoot The Messenger” on Nouriel Roubini’s economonitor dot com site.

It is written by Edward Hugh and Claus Vistesen about Japan and its current economic situation which they judge is about to become more intricate and very difficult. 

They consider whether Japan is on the brink of a fundamental economic change that will inevitably impact seriously on both the international markets and economy.  The theoretical model is that of the effect of singularities in complex analysis.

The article suggests that Japan is not alone with these and related problems.  Reading the article there seem to be aspects that tell us a lot about the developing UK situation and the potential consequences.

As well as this, Japan is embroiled in a nasty row with China as to who has the territorial rights in areas of the South China Sea.  Oil and gas matters are involved as you might expect.  This could get rough and there are long memories of what happened between the late 1920’s to the 1950’s.

Japan is prone also to severe geophysical shocks as are parts of China.  These can be earthquake or volcano or severe weather events and can happen suddenly and with little warning.

One thing that will interest some is that apparently in Japan the old, of whom there are many and increasing in proportion have been largely stripped of their savings by the cheap money policies. 

This means imposing heavier taxes and increasing State burdens on the young to support the old in a declining economy in a shrinking world.

One way or another, this will not have a happy ending.

1 comment:

  1. "One way or another, this will not have a happy ending."

    Neither for the young, nor the old.