Poor, Helpless, Weak Japan

Doug Henwood dhenwood at panix.com
Mon Feb 8 09:15:50 PST 1999

Rob Schaap wrote:

>G'day Doug,
>You write of Japan:
>>For sure, the talk of collapse so fashionable in the English-language
>>press is >way overdone, but you can't run an accumulation engine on sub-5%
>>profit rates.
>Er, why not?

Because: 1) it's not worth the additional risk of investing in production when riskless assets, like U.S. Treasury bonds, pay almost as much, and 2) over the long term, since tomorrow's investment is funded from yesteray's profits, you couldn't sustain the high levels of investment necessary to keep the accumulation engine running with such low profits.


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