Personal Savings

Personal Savings& Incomes > > U.S. vs. Japan > > Japan saves 34% % of GDP each year, vs. 15% in the US. > > Japanese Savings exceed $25 Trillion. > > Of the World's Top 52 Commercial Banks, 17 are Japanese, with assets > of $5.6 Trillion. > > US media reports that the Japanese economy is on the verge of collapse > are misleading. > > Media coverage of this economic disaster is irresponsible! > > Asiaweek's "Bottom Line" reports that the U.S. saves 15% of GDP, while > Japan saves 34%. The fundamental difference in the long term impact of > those savings is: > > 1. Japan's interest payments of its $1.9 trillion in debts are less > than $20 billion per year, so the vast majority of its projected > 1998 savings of $2,325 billion will become assets. > 2. U.S. interest payments on its $10.4 trillion in debts exceed $1 > trillion, not much more than our projected 1998 savings of $1,125 > billion > > In 1998 alone, Japan will increase its national assets by $2,305 > billion in savings plus another $134 billion in its positive balance > of trade, while the U.S. would have increased its national assets by > less than $125 billion--had it not been for the $300 billion trade > deficit. > > In the last 3 decades, the value of the yen to the dollar has > increased 3.4 fold, from 400 yen/dollar to 117 yen/dollar. There is no > evidence that this trend will not continue or even accelerate, over > the next 3 decades, would could make the yen worth 34 yen/dollar by > 2030. > > The article "The Social Contradictions of Japanese Capitalism" by > Murray Sayle (http://www.theatlantic.com/issues/98jun/japancap.htm) > states > > "postal savings ... system now holds, with insurance and > pensions, the yen equivalent of $3 trillion". > > "Japan Statistical Yearbook, 1998",page 462 reports that the Japanese, > in just the year 1996, deposited more than 213 trillion yen (or $1.3 > Trillion) in the "postal savings account", and that the Japanese have > been saving 23.9% of their incomes for the last 5 decades, "Bottom > Line" in Asiaweek reports Japan's savings as 31-34% of GDP during that > time. Median Japanese incomes in 1994 were $89,000, so 42 million > Japanese workers saved an average of $29,370 each, which is $1,233 > Billion in savings in 1994 alone. Edward W. Desmond reports that > Japan's total personal savings are $13 Trillion (see > http://www2.crosswinds.net/san-diego/~manifesto/j1.htm). Testimony of > Martin A. Armstrong before US Congressional House Way & Means > Committee reports Japan's total Postal Savings Accounts at $10 > Trillion (see http://www2.crosswinds.net/san-diego/~manifesto/j3.htm). > The United Nations "Statistical Summary" reports the balance in their > Postal Savings Account to be $22 Trillion. > > References B) & F) below report: > > 1) Total Deposits in Domestically > Licensed Banks 477 trillion yen > (Private Deposits grew from 37.5 > trillion in 1970 to 402 trillion > in 1996--10% compounded annually) > 2) Credit Associations 113 trillion yen > (grew from 24 trillion yen in 1975 > to 113.3 trillion yen in 1996--6% > compounded annually) > 3) Private Commercial Banks 700 trillion yen > 4) Trust Banks 251 trillion yen > 5) Shankin 107 trillion yen > 6) Foreign Banks 4 trillion yen > 7) Postal Savings Accounts 1,200 trillion yen > > Total in yen 2,852 trillion yen > Total in dollars at 117 yen/$ $24.4 trillion > > Murray Sayle writes that Japan's > > "postal savings ... system now holds, with insurance and > pensions, the yen equivalent of $3 trillion" > > and: > > "The Finance Ministry has confessed that Japanese banks hold bad > loans worth a confidence-crushing 76.7 trillion yen ($614 > billion), proportionally ten times as much as America's > savings-and-loan failures cost." > > This is incorrect, in addition to misleading. This is a miniscule > problem in contrast to the amount of money in the Japanese Postal > Savings Account alone. The article is factually in error when it > states that a bank loss of perhaps 2-3% of their Postal Savings > Accounts is "proportionally ten times as much as America's > savings-and-loan failures cost." The cost of our S&L scandal was about > the same size in absolute dollars, but a $614 billion bank loss to the > U.S. is "proportionately" 28 TIMES the amount of our official Personal > Savings of $28 billion, compared to only 3% of Japan's savings. > > He compounds this error: > > "'If the Nikkei [the Tokyo stock index] drops below twelve > thousand, the world economy goes bust.' I checked the papers: the > Nikkei, which touched 38,915 on December 29, 1989, was yo-yoing > between 14,000 and 15,000. (It is since up.) New York in 1929 > felt edgy and nervous, old-timers say, just as Japan does in the > spring of 1998." > > This is scientific evidence that the Japanese average score on the > TIMSS math test (a score of 605 compared to the US score of 500) is > very relevant to today's education crisis. The Japanese, but evidently > few Americans, understand that the Nikkei average is almost irrelevant > to the average Japanese family or worker. The Japanese intimately > understand the low probability of a good return on personal stock > investing, so they don't do much of it. "Japan Statistical Yearbook > 1998" shows that their total personal investment in stocks to be 9 > billion yen--$75 million--less than 0.003% of their Postal Savings > Account. > > The average American family has $4,000 in Personal Savings, $90,000 in > Public Debt, and $18,750 in Consumer and Home Loan Debt, which is > pocket change to that Japanese family. Chart 2 at: > http://www.economist.com/editorial/freeforall/current/index_sf1139.html > is misleading. It suggests that Japanese government debt is 140% of > GDP, but http://www2.crosswinds.net/san-diego/~manifesto/j5.htm shows > Japan's Public Debt to be $1.7 Trillion, or 29% of GDP. > > Asian Total Top 52 Consumer & > Economic Personal Commercial Banks Home Loan Public Debt > Crisis?! Savings in the World Debts > > Japan $23,000 $5,600 Billion $178 Billion $1.7 > Billion Trillion > > US $203 Billion $709 Billion $4,900 $5.5 > Billion Trillion > Japan:US 113X 7.9X 0.036X 0.31X > US:Japan .0088X .127X 27.5X 3.2X > > The percent of Japanese managers who are women reached an > unprecedented high of 1% of all managers, and has since declined to > 0.5%. The percent of US managers who are women increased from 19% in > 1973 to 44% in 1995, and the economy has never been in worse shape in > terms of Personal Savings ($203 Billion or less than 3% of GDP), > Consumer Credit ($1.2 Trillion), Home Loan Debts ($3.7 Trillion), and > the Public Debt ($5.5 Trillion). Wouldn't this have been the totally > expected outcome of affirmative action? > > Our current official rate of Personal Savings is reported by the White > House to be an all time low of 0.4% per year, which is $28 Billion. If > 100% of our Personal Savings were used to pay off these US debts, it > would take us 42 years to pay off the $1.2 Trillion Consumer Credit, > 132 years to pay off the $3.7 Trillion in Home Loans, and 196 years to > pay off the $5.5 Trillion Public Debt--or a total of 370 years. > [Standard & Poor's "Current Statistics", July 1995, Vol. 61 #7] > > Japan's Public Debt, on the other hand, is less than 8% of its Savings > ($1.7 Trillion). Japan could pay off its Public Debt and have $23.3 > Trillion left over in Personal Savings. The Japan Statistical Yearbook > 1998 shows that Japan's total Consumer Credit including home mortgages > is $178 Billion, giving us more than 27 times as much consumer debt as > Japan. Japan could use its Savings to pay off all of its debt in ONE > year, AND pay off all of OUR debts, and still have $12.9 Trillion left > over. > > In 1973, the US had 4 commercial banks with assets which were larger > than any other bank in the world, with twice as many assets as the > largest Japanese bank (B of A with $47 Billion vs. Dai-Ichi with $22 > Billion). The World Almanac, 1998, pg. 115 shows that in 1996, Japan > had 8 commercial banks which were more than twice the size of our > largest commercial bank (Bank of Tokyo with $648 Billion vs. Chase > Manhattan with $272 Billion). Of the top 52 commercial banks > worldwide, 17 are Japanese with assets of $5.6 Trillion, and 3 are US > with assets of $709 Billion (one eighth the assets of the top Japanese > commercial banks). Even though Japan has more than 8 times as many > assets in commercial banks than the US does, the amount they have in > commercial banks is less than a quarter of the amount in Savings. > > For a nation like us, with such huge debts and such miniscule savings, > to suggest that a nation like Japan, with such huge assets and with > such low debts, is having a "financial crisis" is the pot calling the > kettle black. It proves only one thing--the ability and willingness of > our government to lull us into a sense of complete unawareness is like > a fine tuned violin. > > Which Economy Is In Trouble--Japan or the US? > > GDP & GDP > per Worker, > Japan & the U.S. Japan > U.S. > UN > Statistical > Yearbook, Ounces Ounces > Forty second Dollars Gold Yen Dollars Gold Yen > Issue, pg. > 175 > 1995 GDP > (billions) $6,955 18.0 681,590 $5,218 13.5 511,364 > 1970 GDP > (billions) $1,000 25.7 360,000 $197 5.1 70,868 > Delta in GDP > (billions) +$5,955 -7.7 +321,590 +$5,021 +8.4 440,496 > 1995 GDP per > Worker > > US=124.9 > million > workers with > 46% women $55,685 144.1 5,457,000 $80,899 209.3 7,928,124 > > Japan=64.5 > million > workers with > 40.5% women > > 1970 GDP per > Worker > > US=75.2 > million > workers with > 40% women $13,298 341.8 4,787,234 $4,691 121.4 1,687,333 > > Japan=42 > million > workers with > 40.5% women > > Delta in GDP > per Worker +$42,387-197.7 +669,766 +76,208 +87.9 +6,240,791 > Percent > Change +319% -57.8% +14% +1,625% +72.4% +370% > 1970 Public Debt, Consumer & Home Loan Debt, and Bank Assets and > Savings > Public Debt > (billions) 412 10.6 148,320 102.4 2.6 36,864 > Consumer & > Home Loan 230 5.9 82,800 3.2 0.08 1,152 > Debt > Bank Assets > & Savings 749 19.3 269,640 179.2 4.6 64,512 > NET 107 2.8 38,520 73.6 1.9 26,496 > 1998 Public Debt, Consumer & Home Loan Debt, and Bank Assets and > Savings > Public Debt 5,500 18.0 646,250 1,700 5.6 199,750 > Consumer & > Home Loan 4,900 16.0 575,750 184 0.6 21,620 > Debt > Bank Assets > & Savings 3,700 12.1 434,750 25,000 81.7 2,937,500 > NET -6,700 -21.9 -787,250 +23,116 +75.5 +2,716,130 > CHANGE IN > NET -6,807 -22.2 -799,823 +23,042.4 +75.3 +2,707,435 > PROTECTED TO 2026 Public Debt, Consumer & Home Loan Debt, and Bank > Assets and Savings > Public Debt 73,422 30.6 2,816,000 28,223 12.1 1,082,358 > Consumer & > Home Loan 104,391 43.4 4,003,000 10,580 4.5 405,750 > Debt > Bank Assets > & Savings 18,277 7.6 700,962 3,487,723 1,451 133,756,607 > NET -66.4 +1,434.4 > > THE FACTS: > > 1) The US has never had a higher Public Debt, a higher Consumer Debt, > nor a lower level of Personal Savings than it now has. > > 2) The real purchasing power of today's two-income families are > literally one third of what one-income families were in 1973. > > 3) The "low unemployment rate" the media touts is, according to every > economist on record, a prognosis for dismal future economic > competitiveness and progress. > > 4) The US hasn't had an after-inflation GDP growth rate in the last 30 > years equivalent to the average after-inflation growth rate of Japan > for 48 of the last 50 years. > > 5) During the same period of time that the U.S. lost $7.5 trillion in > national assets, Japan gained $23 trillion. > > References: > > a) Japan Statistical Yearbook, 1998, Statistics Bureau, Management & > Coordination Agency, Government of Japan, pgs. 458. > > b) The Europa World Yearbook, 1996 Volume 1, 37th Edition, banks. > > c) Current Statistics, Standard & Poor's, July 1995, Vol. 61 #7. > > d) Journal of Japanese Studies, "How Postal Savings and Public > Pensions Support High Rates of Household Savings in Japan", Stephen J. > Anderson, pg. 88. > > e) Testimony before Congress of Martin A. Armstrong which reports that > Japan's Postal Savings Accounts contain $10 Trillion > (http://www2.crosswinds.net/san-diego/~manifesto/j3.htm) > > f) International Monetary Fund, "Saving Behavior & the Asset 'Bubble' > in Japan", Occasional paper 124, Ulrigh Baumgartner, April 1995. > > g) OECD, working paper #73, "The Savings Behavior of Japanese > Households", Kenichi Kawasaki, January 1990.