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The purpose of this article is to examine the fiscal flows for Japan to assess how the stock market can make all-time new highs at the same time that the economy is in recession and
Japan In Recession But Its Stock Market Makes All Time Highs, This Is How
Summary
- The Japanese stock market has reached all-time highs despite the country being in a recession.
- The three main sources of fiscal flows in Japan are federal government spending, the current account balance, and bank credit creation.
- These fiscal flows have contributed to a positive aggregate demand and are expected to continue supporting the stock market rally.
Trading real estate, equity and bond markets using fiscal flow analysis, functional finance, demographics and the real estate cycle.I stand on the shoulders of giants such as the work of Professors Wynne Godley, Micheal Hudson, Steve Keen, and William Mitchell, Roger Malcolm Mitchell, Warren Mosler, Robert P Balan and many others.One can analyze a country in seconds with four numbers as a % of GDP and these are G P X C where[G] Federal spending.[P] Non-Federal Spending.[X] Net Exports[C] CreditOne can then derive a set of accounting identities that are correct by definition.GDP = G + P + XAggregate Demand = G + P + X + C or GDP + Credit.GDP = GDIG and X are regularly reported in official national account statistics and one can work out P as follows:P = G + XFederal Deficit ↑ = Private Surplus ↑ = Risk Asset markets ↑
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