What You May Have Missed Last Week: Chinese and Japanese Economic Landmarks
The Chinese and Japanese economies hit desired landmarks this week.
The Chinese - according to one method of calculation - are now the largest economy in the world. You'd think the headlines would have been more pronounced on this one, but they weren't.
In any case, you can read more about this HERE. The author, Brett Arends, who writes a financial column, believes this is kind of earth-shattering news, perhaps more because it's happened far earlier than anyone predicted. The fact that it's happened however, should surprise no one. The trend has been in place for years. However, we might note that Mr. Arends correctly notes that economic ascendency has historically marked the beginnings of a shift in power from the dominant country or empire to the rising economic power. And that, one has to believe, should concern us Americans who have been the world's singular Big Shot ever since the Soviet Union's collapse in 1989-1990.
Meanwhile, the Japanese government reached its goal of depreciating the value of the Yen relative to the US dollar. It hit the 120 mark on Friday. It began its march from an overvalued 80 and as it has steadily declined in value, the Japanese stock market has floated up. The theory here is that with a cheaper currency, Japanese goods will be more desirable to the rest of the world, hence the Japanese economy should get a goose from the government's trashing of the Yen. What's actually happened, though, is that Japan has slipped into recession. But apparently the Japanese stock market pays this no mind, which really makes no sense. Then again, perhaps some combination of foreign investment - from those who've been trumpeting Japanese stocks for the last couple of years - and the government policy of buying stocks with government reserve funds has successfully reversed the laws of financial gravity and pushed up stocks even in the face of economic recession.
Add all this to your list of worldwide economic discombobulation. ("Discombobulate": disconcert or confuse.)
The Chinese - according to one method of calculation - are now the largest economy in the world. You'd think the headlines would have been more pronounced on this one, but they weren't.
The new ranking is based on "real" economic output, which means the numbers aren't adjusted for changes in foreign exchange rates, just on actual output. Maybe the news silence was based on the subtlety of this way of calculating the rankings; maybe it was just something that wasn't considered happy news about the U.S. economy, something the American financial media use as a general guideline in publishing headline stories.The Chinese economy just overtook the United States economy to become the largest in the world. For the first time since Ulysses S. Grant was president, America is not the leading economic power on the planet.
It just happened — and almost nobody noticed.
In any case, you can read more about this HERE. The author, Brett Arends, who writes a financial column, believes this is kind of earth-shattering news, perhaps more because it's happened far earlier than anyone predicted. The fact that it's happened however, should surprise no one. The trend has been in place for years. However, we might note that Mr. Arends correctly notes that economic ascendency has historically marked the beginnings of a shift in power from the dominant country or empire to the rising economic power. And that, one has to believe, should concern us Americans who have been the world's singular Big Shot ever since the Soviet Union's collapse in 1989-1990.
Meanwhile, the Japanese government reached its goal of depreciating the value of the Yen relative to the US dollar. It hit the 120 mark on Friday. It began its march from an overvalued 80 and as it has steadily declined in value, the Japanese stock market has floated up. The theory here is that with a cheaper currency, Japanese goods will be more desirable to the rest of the world, hence the Japanese economy should get a goose from the government's trashing of the Yen. What's actually happened, though, is that Japan has slipped into recession. But apparently the Japanese stock market pays this no mind, which really makes no sense. Then again, perhaps some combination of foreign investment - from those who've been trumpeting Japanese stocks for the last couple of years - and the government policy of buying stocks with government reserve funds has successfully reversed the laws of financial gravity and pushed up stocks even in the face of economic recession.
Add all this to your list of worldwide economic discombobulation. ("Discombobulate": disconcert or confuse.)
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