Japan.. is collapse inevitable?

No argument there, I'm just wondering if "over the next 20 years" will be sufficient if things go south in Asia.

as things stand now, if there's no demand for resources in the next year or three, I hardly see Australia being able to offer much else. I could be wrong of course, I'm no expert on Australia, but the media and government aren't the only ones raising these alarm bells, some fairly "switched on cookies", as you like to call them, have been saying the same things – http://www.marketwatch.com/story/australia-facing-a-hard-landing-andy-xie-2012-10-25

Been looking at this conversation for a while, I think you have a very good point Freckle.

Here's another commentator who doesn't agree with the "follow foreign example at all costs" policy, stating, and rightfully so, that it hasn't exactly served the rest of the world all that well, and also pointing to the fact that Japan has done well (and not "barely survived", as freckle puts it) on the last few rounds of economic strife –

http://economictimes.indiatimes.com/news/international-business/japan-shows-the-world-how-to-come-out-of-economics-of-stagnation/articleshow/18016340.cms

I'd hardly call Paul Krugman, a Nobel memorial prize in economics sciences winner, an anonymous village idiot. And while I'm not one to crown someone the oracle of Delphi just because they hold a title (or several dozens, in his case), I actually agree with every word.

(you can find the original article on the NYTimes archive, as the economic times credits at the start – it just loads a lot better there)

you seem to care a lot more for who's writing than what they actually say, don't you? I didn't expect this to be the case with you, to be honest.

No, i beg to differ, what this article says is that there's a wide range of mediums between the Austrian and Keynesian economic approaches regularly preached around the globe. There's no "one sure and absolute way" that works anywhere and for anyone to correct financial woes, as the last few years have demonstrated time and time again. I think this is best summed in this short observation of Krugman's –

"…That said, Japan never had the kind of employment and human disaster we've experienced since 2008…"

This in spite of the fact that the early nineties bubble burst and subsequent economic plunge should have turned them into the worlds worst civil war zone, if Greece, the Great Depression in the US, and Europe post WW2 are anything to go by. The Japanese concept of "being victims to their government's policies", as you put it, is quite different from that of other countries. While this works both ways (they'd be very hard pressed to suspect corruption or collusion with business, to name one of the downsides), it also means that they're quite far from the hands up, run for the hills, burn tires in the street that tends to happen invariably in the west at the first sign of fiscal crisis – and as a result, are also far more resilient to it, since they tend to work as a collective that stays cohesive in hard times as well as easier ones, and doesn't break into chaos at the first sign of trouble.

as freckle puts it, the economies of the world are a seesaw structure (I see it more as a circle running back on itself, but from a subjective timeframe perspective the differences are minute). If a depreciating yen will help exports for a time, the Japanese people, including domestic bond holders and savers, will take it in stride, and wait for better times, guaranteed. There will be no national or financial collapse, rioting in the streets, or even bank rushes. There will be muted complaint, bitterness, and resignation, then a tightening (what is called here the "shoganai" mentality – very loosely translatable as "ce la vi" or "what can we do", normally followed by unbelievable perseverance. Something to learn from, for those, like Krugman's, who have the balls to admit when they're wrong).

Incidentally, this is, again, why I believe the renewable energy initiative will be successful here as well, as mentioned earlier – because in this case, as opposed to the above, the Japanese public has actively, loudly and internationally spoken against its government policies – this was enough of an event (and you won't see this happening on the financial front, I promise you) for Japan inc. to take notice and invest a huge proportion of its wealth in renewable energy initiatives that are rapidly transforming it into a global clean-tech nation of not only world leadership, but gargantuan proportions even in an absolute perspective. Again, to ignore the significance of the Fukushima event and its effect on Japanese mentality is a severe error. Things are changing in Japan, and government debt, while not the least of Japan's urgent issues, is also very far from the top among them.

The problem is that once a Gov goes down the path of solving a debt problem with money printing it becomes a very slippery slope. I would have to agree that the Japanese people and institutions will probably better receive what their Government is in the process of doing to them, but this does not change the fact that the Yen is most probably going to dive in value and cost of living pressures will increase.

One of the effects of QE is the banking system lending a far higher portion of their funds to Government at the expense of businesses, this is happening in Australia too by the way. This is a problem as Governments tend not to be very good at allocating resources efficiently, and the only way to overcome inflation in this scenario is for large increases in efficiency.

How this will effect property prices I wouldn't know, their will be upward pressure from inflation but downward pressure in terms of affordability. I think the greatest risk for Australian investors is with the exchange rate.

No, a loss is a loss. If you are moving a large amount of cash out of one currency into another that captial is at risk from exchange rate swings and they don't necessary go up and down over the long term, in this case i think it will simply be down for a very long time. Don't take this as meaning i don't think people should invest in Japan, I know little about its property market. But they should be aware of this risk on their initial capital when making a decision, as they should if contemplating investing anywhere overseas., it is an added layer of risk.

                      I know this isn't relevant but I couldn't help myself :