Japanese Postal Savings Accounts
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:
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. The U.S. would have increased its national assets by less than $125 billion had it not been for the projected $300 billion trade deficit. In the last 3 decades, the value of the yen to the dollar 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, which 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:
"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. Testimony of Martin A. Armstrong before US Congressional House Way & Means Committee reports Japan's total Postal Savings Accounts at $10 Trillion. 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:
This is incorrect, in addition to misleading. It is a miniscule problem by contrast to the mountain of money in Japanese Postal Savings Accounts alone. The article is factually in error when it states that a bank loss of perhaps 2-3% of their savings 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:
This is abundant evidence that the average Japanese score on the TIMSS math test (a score of 605 compared to the US score of 500) is very relevant to today's economic and 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 their total personal investment in stocks to be 9 billion yen--$75 million--less than 0.003% of their savings.
Between August-October 1998, the value of Japan's savings on the
world market increased by $6.25 trillion ($25 trillion x 25%), JUST because the value of
the yen increased from 147 to 117.6 in only the last two months. While the media is
replete with stories about the "Japanese Economic Crisis, Japan's GDP has not
declined by any credible source:
1994 1995 1996 1997 1998 Europa World Yearbook 1998 483 487 505 n.a. n.a. (GNP trillions yen) UN Statistical Yearbook 42nd 475 479 505* n.a. n.a. (GDP trillions yen) Asiaweek 479 505 542 626 (GDP trillions yen)
*The Statistical Yearbook of the United Nations, Forty Second Issue,
pg. 167 reports Japan's 1995 GDP to be $5,217 billion. The yen was as high as 80 yen to
the dollar in 1995, but to get 505 trillion yen they had to use 96.8 yen to the dollar to
estimate Japan's 1995 GDP in dollars.
The percent of Japanese managers who are women reached the unprecedented high of 1% of all managers by the mid-1980s, 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. Personal Savings are the lowest ever, at 0.4% (per the White House), Consumer Credit is higher than ever at $1.2 Trillion, Home Loan Debts are higher than ever at $3.7 Trillion, and there still is no plan to decrease the $5.5 Trillion Public Debt . Personal Savings of 0.4% is $28 Billion, and if 100% of it were used to pay off the debts, it would take 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]. Wouldn't this have been the totally expected outcome of affirmative action?
Japan's $1.7 Trillion Public Debt is less than 8% of its savings, and these savings could pay off Japan's Public Debt and have $23.3 Trillion left over. 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 assets in Japanese commercial banks are 8 times the assets in US commercial banks, this is less than a quarter of the amount Japan has in savings.
For the U.S. 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?
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
f) International Monetary Fund, "Saving Behavior & the Asset 'Bubble' in Japan", Occasional paper 124, Ulrich Baumgartner, April 1995.
g) OECD, working paper #73, "The Savings Behavior of Japanese Households", Kenichi Kawasaki, January 1990.
h) National Bureau of Economic Research, Working Paper No. 3690, "Japan's High Savings Rate Reaffirmed", Robert Dekle, Lawrence Summers, April 1991, Table 1(a).
i) United Nations Statistical Yearbook, 1997