On top of that, if Japanese banks ever had to admit many of the loans they hold are worthless, they would go bankrupt themselves. Land prices have collapsed. Homeowners find the homes they bought in the 1980s are worth only half what they paid for them. And consumers aren t consuming. Part of that is the average household income is on a downward trend.
Part is because consumers are hoarding cash.
The bad news for them is that many financial experts in Japan fear banks have lent consumers savings to dubious business ventures, meaning some of those people will find their retirement savings have vanished. The population is growing very slowly and aging rapidly. Younger couples have fewer children. The government expects the population to begin declining in 2007, something almost unheard of for a modern industrialized nation. The old system of lifetime employment is gone.