Re: Y2K

Tim Bates (
Fri, 19 Feb 1999 12:09:22 +1100 said
>In fact, it is likely that in such a time of economic uncertainty people
>would want to increase their total savings (cash plus bank accounts).
>This is a common response to hard times. People want to build up a
>savings "buffer" in case they lose their jobs or face other economic

It is interesting thing to think about this in the Japanese situation.

Their government cannot convince them to spend their savings for love nor money. It is currently earning less than .25% (yes, less than one quater of a percent), and that just makes them want to save harder! Why? Becuase they are saving for their old age.

But upon what will they spend this money when they are old? The reason they need to save is that there are no young people to do the work. In the, mostly retired, future, there will be few goods to buy nor services to purchase.

The saved money will then suffer tremendous inflation (more money than goods = higher prices for goods). No use trying to buy American or Australian goods (2 countries for whom the age bulge will hit around 15 years later than in Japan), as no one will want to swap dollars for those Yen when there is nothing in Japan to purchase.

Tough times ahead for Japan, I think.