John Hussman

John Hussman is one of the best minds in the business, in my opinion, and in this presentation from the recent Sonoma Wine Country Conference he addresses what he labels the 'unstable equilibrium'. 
Sit back and enjoy a master at work

This is guaranteed to give you goosebumps! Alice Fredenham

Obnoxious Prick that he is, Simon Cowell does have a knack for uncovering some phenomenal talent. 

Last week, a shy, 28-year-old beauty therapist and walking bag of nerves from Hertfordshire named Alice Fredenham stood on the stage in front of four judges and a couple of thousand people.

She had come alone and hadn't told anybody she was auditioning, because she 'didn't want to fail and let anybody down'. You can probably guess what happened next right,  but ... FARK-IN-WOW!!

 this is guaranteed to give you goosebumps. Simply bloody beautiful

Richard Koo essay on Japans BOJ Kaboda sans Qualitative Easing benefits and Dangers

The existing (and ongoing) massive expansion of base money into the banking systems of the US, England, and Japan is without precedent. As Nomura's Richard Koo notes, at 16x statutory reserves, the liquidity 'should' have led to unprecedented inflation rates of 1,600% in the US, 970% in the UK, and 480% in Japan.

However, it has not, yet. In short, Koo continues, businesses and households in these economies have stopped borrowing money even though interest rates have fallen to zero. And with no one borrowing money and many actually paying down debt, the money multiplier has turned negative at the margin - because of the severe damage caused to balance sheets when the bubble collapse drove asset prices lower while leaving debts intact (so-called balance-sheet-recession).

This suggests that there is little physical or mechanical reason for the BOJ’s easing program to work. But the program could also have a psychological impact - and Japanese media is on an 'inflation' full-court press currently. The risk here is that not only borrowers but also lenders will start to believe the lies. No financial institutions anticipating inflation could ever lend money at current interest rates. No actual damage will be done as long as the easing program remains ineffective. But once it starts to affect psychology, the BOJ needs to quickly reverse the policy and bring the monetary base back to 'normal'. If the policy reversal is delayed, the Japanese economy (and inflation) could spiral out of control.

Via Richard Koo, Nomura,

The Money Multiplier... and inflation...

The problem is - what if the people start to believe...

The risk here is that not only borrowers but also lenders will start to believe the lies. No financial institutions anticipating inflation could ever lend money at current interest rates. A financial institution that suddenly saw inflation on the horizon could not continue holding 10-year government bonds that yield 0.6%. The resulting rush to sell could trigger a crash in the JGB market, inflicting heavy damage on domestic financial institutions.

The question is how the Kuroda BOJ would respond to such a crash. If it began buying more JGBs, the monetary base would expand, stoking inflation concerns at a time when private demand for funds was already recovering and the money multiplier had turned positive at the margin.

But if the BOJ sold its JGB holdings in an attempt to quell inflation concerns, bonds would drop further, blowing a large hole in the balance sheets of financial institutions and the government.

By that time the monetary base could easily have grown to, say, 15 times statutory reserves. In that case the money supply would continue growing, causing inflation to spiral out of control, unless the central bank reduced the monetary base to about 1/15th of its current level.

I suspect that the BOJ would employ all the tools at its disposal to achieve this, including a sizable increase in the statutory reserve ratio, but all of those measures would serve to push rates higher, resulting in large losses for the BOJ and other JGBs investors.

And don't rely on 80 year old 'proof' since it is different this time...

Mr. Kuroda’s methods have frequently been compared to those of the 1930s-era finance minister Korekiyo Takahashi, who championed a successful policy of BOJ underwriting of government debt issues. But Japanese people in those days could not move money freely overseas. The authorities today need to be especially careful inasmuch as almost anyone can move funds abroad with a telephone call or a few clicks on a computer screen.

Be careful what you wish for...

No actual damage will be done as long as the easing program remains ineffective. But once it starts to affect psychology, the BOJ needs to quickly reverse the policy and bring the monetary base back to a level more in line with the value of statutory reserves.

If the policy reversal is delayed, the Japanese economy could spiral out of control at a time when base money equal to many times statutory reserves is sloshing around in the market.

Moreover, the act of scaling back the monetary base must be carefully calibrated so as to minimize damage to the JGB market. The BOJ, Ministry of Finance, and Financial Services Agency should also have contingency plans in place in the event that easing triggers a crash in the yen or the bond market.

Full article below...

Richard Koo Quantitative and Qualitative Easing 2013 04 16

Richard Koo Quantitative and Qualitative Easing 2013 04 16

"within a month or two the zeros start coming back"

In his essay above, Koo makes clear that Japan has LOTS of positive things to do yet

He is superb, one of the great economists of the world ... tho I realise he does not fit in to the dominant themes on my blog.

But Koo and his ideas ... including making sure that common working people are the ones benefited, with jobs and incomes ... are a good part of why Japan has never had a 'depression' since its giant market crash 23 years ago, and why Japan has remained an okay place economically.

What is missing from the above summary, is Koo's optimistic presentation of the other parts of the new Japanese government's programme, which Koo thinks could well succeed, and help to avoid the problems mentioned in this article, if they are implemented promptly.

Koo writes in his Nomura research piece given above:

« One concern is the fact that while the first pillar of Abenomics—monetary accommodation—is already being implemented, the second and third have been slow in coming. I think the base money supplied by the BOJ would come to life if the government announced an accelerated depreciation scheme for capital investment or a bold plan for deregulation of the energy sector.

The Abe administration therefore needs to present concrete proposals for the second and third pillars of its economic strategyas soon as possible.

Other options for the “second pillar” that are being discussed include policies to encourage business investment, such asinvestment tax breaks or accelerated depreciation schemes. If such measures succeeded in ending the private sector’saversion to debt, I think everything would start moving in the right direction at a time when interest rates were low and banks willing to lend.

The third pillar of Abenomics—structural reforms and deregulation—needs to provide the kinds of attractive investment opportunities that tend to be in short supply in a mature economy like Japan’s.Oft-mentioned candidates for reform and deregulation include energy, environmental businesses, and agriculture. I think policies aimed at achieving more effective use of urban land, enabling residents to live in larger homes for less money, would create significant new domestic investment opportunities.There are few city dwellers in Japan who do not want to live in larger homes. 

Yoshifumi Tachibana, 32, might be one. He recently bought an apartment worth 60 million yen (£478,782; $766,430) in central Tokyo.

“I was told I’d get the best mortgage rate if paid about 20% up front, so I did,” he says.

“Low interest rates were definitely one of the reasons for me to decide to buy my first home. I borrowed 47 million yen and I am on a 35-year repayment plan with an interest rate of 0.075%.”

But despite such attractive rates, real estate agent Hidetaka Miyazaki says he has not seen an increase in the number of buyers and investors in the last 20 years, especially not in sub-urban areas.”

http://www.doctorhousingbubble.com/japan-real-estate-bubble-home-prices-back-30-years-zero-percent-mortgage-rates/

Any system of money whose survival depends upon perpetual credit expansion for consumption as a model is doomed. There is always a saturation point, a point where no matter how low the rate is no one can assume a pennies worth more. Fundamentally all credit is, is the pulling forward of future demand with the kicker of interest. Imagine if you will 100 year car loans, 500 year home loans...regardless of how far into the future you push things you still need a minimum cash flow in order to service the debt. While debt can be expanded infinitely in theory, cash flow cannot. Add to that the insidious nature of interest which compounds over time and has to be created by the same mechanism all money is created (loaned into existence) and it should be obvious to everyone (which its not) that the system we live under is doomed.

Japan is a tragic but shining example of the failure of Keynesian/Fisherism. 20+ years of propping up the crony banks and their crony pols and crats has yielded nothing but bankruptcy for the Japanese people. Sidenote: until recently most of the "borrowed" money that the JapGov pissed away came from the Japanese people via the Postal system.

Now the the JapGov is basically turning Japan into a Chinese protectorate. The Chinese gov must love that they can not only basically "buy" Japan" but that they can also buy out their foreign asset holdings cheap. i.e. the Chinese can "recycle" their toilet paper dollars via Japan's US asset holdings and at a song too.

I wonder how close the Japanese will grow to like the Chinese in the coming years?!             

If Japan was a horse it would be in a very rare and expensive Findus sausage roll by now ... and waaay past its use-by date.

bon appetite

Yen Yield Rocks U.S. REITs

US Equity Reits are already significantly overvalued; many are forcing income into the current category solely to keep their payouts up there.
In the pre-08-crash period, US Reits engaged in a wide variety of accounting gimmicks, unsound leasing practices, and risky debt and financing maneuvers in order to bolster the price of their stock. Since the resurgence in prices in 2011-present, a whole new collection of gimmicks and falsities have bolstered equity reit prices. the referenced VNQ - Vanguard's benchmark Reit ETF - is now estimated to be selling at over 135 percent of NAV, namely, for every intrinsic dollar of real estate value in the companies that are included in the ETF, one is paying $1.35 cents for their shares.
REIT bubbles and busts are as common in the industry as cranky old men harboring delusions that they're "captains of industry" because some investment banker can raise money from lemming investors.

U.S. real-estate investment trusts are big in Japan. That could turn into a problem for U.S. investors.

In a low-return world, the steady dividends U.S. REITs provide have made them an investor favorite, especially in Japan, where the central bank is going all out to end two decades of stagnation that has left an aging population desperate for income.

Enlarge Image

CoStar Group

Japanese investors have poured money into funds that invest in U.S. REITs and that offer dividend yields that far-and-away exceed yields on the REIT's themselves.

The yield on the Vanguard REIT exchange-traded fund, for instance, is 3.2%. In yen terms, due to that currency's weakening, it would be 2.7%. In contrast, the largest Japanese REIT fund, the Shinko U.S.-REIT Open Fund, sports a yield of 17.5%. The Daiwa America REIT Fund, pays out 18.4%.

The Japanese funds' ability to sustain such yields looks iffy. That could put U.S. REIT shares at risk, because of the large holdings some of the Japanese funds have amassed in them.

The reason the Japanese funds' yields are so high? They distribute not just the dividends their REIT holdings generate, they also base payouts on what can be unrealized capital gains in the REIT shares.

So if U.S. REIT shares rise, the Japanese funds pay out all or some of those gains to investors, even though they may not have sold their holdings.

Moreover, when investors are putting new money into the funds, the funds needn't sell shares to make distributions, because they can simply recycle fresh cash inflows back to existing investors.

Because REITs have risen so much lately—especially when seen through the prism of a yen that has fallen 18% against the dollar in the past year—the funds have been able to pay handsome monthly dividends. The offset is that the funds' net-asset values don't reflect the share-price gains that U.S. REITs have seen.

While the MSCI U.S. REIT index is up 45% in yen terms over the past year, the net-asset values of big Japanese REIT funds haven't risen as much.

The danger is that, if the music stops playing, the Japanese funds could be in a precarious position.

Here's why. Say prices of the U.S. REITs stop rising, and the yen stabilizes. Then the Japanese funds will no longer be able to pay such generous dividends without selling off some of their holdings.

This could depress some U.S. REIT shares. And that could provoke more sales in following months as the Japanese funds sought to continue the dividend payouts.

Such sales would also lead to falling net-asset values for the Japanese funds. Although Japanese investors view these as annuity-like products and presumably understand a decline could occur, there is the risk some get spooked and pull money out, lowering net-asset values further and potentially provoking more sales.

None of this would be much of a concern to U.S. investors if the Japanese funds' holdings weren't substantial. At last count, Japan's top 10 U.S. and global REIT funds owned 8.6% of mall and shopping-center owner Simon Property Group, SPG -0.35%according to FactSet. They owned 10.1% of Vornado Realty Trust VNO +0.24% .

It's easy to imagine a future where REITs get rocky.

Risk - It's Not Just A Board Game

Superb presentation, very well researched and entertaining.

you can see why central banks are so secretive regarding their gold holdings/leasing , amazing not more fireworks when we learned it would take 7 years to return just small proportion of Germany's gold.
When the shit finally hits the fan, governments will make ownership of gold illegal paying a 50% premium to those who turn it in as the USA did in 1933. They will then start again with a new devalued "gold backed" currency and the promise "WE WILL NEVER LET THIS HAPPEN AGAIN"

Japan front and centre

Art Cashin is a true legend on the floor of the NYSE and a great student of history. Art can always be relied upon for a considered reaction to any market gyrations, and his opinions are widely respected. In this interview he gives his thoughts on recent developments in Europe and the US,  and the disconnect between market action and the seeming reality behind it.
Art is 'very, very concerned' about Cyprus, explains how Dijsselbloem's comments could lead to a major bank run, and of course weighs in on Japan.
Click here to listern:
http://kingworldnews.com/kingworldnews/Broadcast/Entries/2013/4/6_Art_Cashin_files/Art%20Cashin%204%3A6%3A2013.mp3


With Japan front and centre, what better time to take a look back at all the rises and falls of
the Nikkei through the last three decades, courtesy of Doug Short. great historical perspective on Japan's bonds, equity markets, and interest rates over that extended period.

CARGO - Tropfest Australia 2013 Finalist (TSI "Balloon")

This film is only about 7 minutes long However captivated from beginning to end. It was directed by Ben Howling & Yolanda Ramke.  CARGO tells the story of a man trying to survive after a zombie outbreak while also watching out and caring for his infant daughter. 
Superb short Film. enjoy! 

what's wonderful about a video with no dialogue? everyone in the world can enjoy it equally!

Every Central Bank Is Trying To Debase Their Currency

“For the first time in recorded history, we have nearly every central bank printing money and trying to debase their currency. This has never happened before.” – in Peak Prosperity

Tokyo Investment Writers Jazz Club Analysis Unit Selection

This month's dozen starts off with a couple of tunes from the archives taking in some spiritual grooves, as well as a hard bop piano trio number from Toshiko Akiyoshi. Then it's back to the present day with new tunes Soren Gemmer, Eldar Djangirov and Rafiq Bhatia as well as tracks from the debut albums from Yuki Futami Trio and Tres Men. Enjoy ...

The Call - Sahib Shihab (from Spiritual Jazz 4: Americans In Europe on Jazzman Records 2012)

Vaya Mulatto - Stone Alliance (from Stone Alliance on 3D 2005 reissue)

Bootsie's Lament - Oneness of Juju (from Space Jungle Luv on SHOUT! Productions 2013)

The March - Toshiko Akiyoshi (from Listen to 和ジャズ・ディスク・ガイド on Think! Records 2013)

Southern Island - Yuki Futami Trio (from Banzai Oscar on T-Toc Records 2013)

At First - Soren Gemmer (from At First on ILK Records 2013)

Morning Call - Eldar Djangirov (from Breakthrough on Agate/Motema 2013)

Art For Life - Makoto Kuriya (from Art For Life on Pony Canyon 2011)

Try - Rafiq Bhatia (from Yes It Will on Spectral Life 2012)

Freeness Part 2 - The Heliocentrics (from 13 Degrees Of Reality on NowAgain 2013)

Morphine - The Sign Of Four (from Hammer, Stirrup & Anvil on Jazzman Records 2013)

Sister Jane - Tres Men (from Tres Men on Playwright 2013)

The Tokyo Jazz Notes Dozen #33 ~ April 2013 by Tokyojazznotes on Mixcloud

Japanese real estate mirror

Looking into the Japanese real estate mirror: Residential home prices in Japan back to levels last seen 30 years ago in spite of near zero percent mortgage rates. http://www.doctorhousingbubble.com/japan-real-estate-bubble-home-prices-... Excerpt: "When the Japanese housing bubble burst in 1990 the economy was left in disarray.hard to believe that this happened 23 years ago but real estate prices in Japan are now at levels last seen in 1983. In other words, thirty years of virtually no real growth in real estate values. " Ouch! .

When the Japanese housing bubble burst in 1990 the economy was left in disarray.  Hard to believe that this happened 23 years ago but real estate prices in Japan are now at levels last seen in 1983.  In other words, thirty years of virtually no real growth in real estate values.  In a system conditioned by inflation this is a perfect example of asset deflation.   Many simply assume that real estate appreciation is going to happen one way or another but we are now following a low rate policy similar to what the Bank of Japan did with quantitative easing.  2012 is not a good example to set a baseline for a trend because interest rates were pushed down heavily by the Fed and inventory continues to be held off creating a low level of supply on the market.  Yet when we look at what Americans can afford on a monthly basis, it is virtually locked because household incomes have been stagnant for well over a decade.  The Japanese asset boom and bust provides many parallels to what we should expect in the US.  Many point to 2012 as some sort of divergence but this is more a reflection of aggressive quantitative easing and low inventory more than a sustainable boom because of solid economic and wage growth.

Japan Prices back to 1983 levels

Residential property values in Japan are now back to levels last seen in 1983:

Japan is an important case example because in 1990, Japan had a GDP of $3.1 trillion and the US was at $5.7 trillion.  Japan for many years was the second largest economy.  But today Japan’s GDP is what it was in 1995.  The Bank of Japan bailed out the banking system with bucket loads of troubled assets and forced rates to incredibly low levels.  You can get mortgages in Japan in the 2 percent range but once again, refer to the first chart.

Some people take the next step and talk about zero percent mortgage rates.  Why speculate when we can look at Japan for an example:

“(BBC) Yoshifumi Tachibana, 32, might be one. He recently bought an apartment worth 60 million yen (£478,782; $766,430) in central Tokyo.

“I was told I’d get the best mortgage rate if paid about 20% up front, so I did,” he says.

“Low interest rates were definitely one of the reasons for me to decide to buy my first home. I borrowed 47 million yen and I am on a 35-year repayment plan with an interest rate of 0.075%.”

But despite such attractive rates, real estate agent Hidetaka Miyazaki says he has not seen an increase in the number of buyers and investors in the last 20 years, especially not in sub-urban areas.”

Essentially what is happening is market manipulation of rates to keep home prices inflated for banks.  In Japan, the support to banks has been nearly unlimited since the real estate bubble burst in 1990.  The Fed is following a very similar road allowing banks to selectively hold off properties from the market whilepushing rates lower to keep prices higher.  Since there are zero conditions on bailouts or funding, banks can do what they see fit even in the aftermath of the greatest housing bubble in US history.

Sales from the bottom

Here is an interesting take from economist Dean Baker:

“Both the NYT and USA Today have convinced themselves that house sales are well below their trend level, with the latter telling us that a 5.5 million annual sales rate of existing homes considered healthy. In fact, we are pretty much back to trend levels of sales. In the mid-90s before the bubble began to distort the market, sales averaged about 3.5 million a year. A simple adjustment for the 15 percent population growth over this period would imply an annual sales rate of 4 million existing homes. That is somewhat below the current 4.5 million sales rate.”

Today existing home sales are 5.04 million in November of 2012.  There is massive speculation and much of this is coming from investors, flippers, and foreign money.  Low rates create massive market distortions.  At least in this sense we are different from Japan but this is going on right now.  Will investors continue to be a big part of the market moving forward?  Not long-term.  Yields are already collapsing in many places like Arizona and Las Vegas and investors will pull back.

US and mortgage rates

US home values are now back to prices last seen in 2003.  A lost decade has already occurred:

Keep in mind that in 2003, mortgage rates were in the 6 percent range and now have fallen by over 50 percent thus increasing what Americans can take on to purchase a home.  Home prices have not shot up in a similar fashion because households have not seen any real wage increases:

Someone nailed the prediction on lower mortgage rates here:

“(Daily Wealth, mid-2011) Every year since I can remember, real estate brokers have warned, “You’ve got to buy now… before mortgage rates go up.”

Every year, the majority of economists and experts predict that “interest rates simply can’t fall any farther.” And then they do.

I don’t want to make a prediction today. But I do want to point out two facts:

1) For the last 30 years, the trend in interest rates has been down.

2) Mortgage rates in Japan today are less than 2%.

Let’s take a look at each of those facts…

In the 1980s, nobody could imagine a mortgage rate below 10%. In the 1990s, nobody could imagine a mortgage rate below 7%. In the 2000s, nobody could imagine a mortgage rate below 5%. Yet here we are, in 2011… and mortgage rates have spent the last month in the 4.5% range.”

Rates today are in the 3 percent range (a drop of 33 percent from the 4.5 range when the article was written).  The big take away really is that in 2012, much of the boost in prices came from this added leverage that households could take on.  For example, run the numbers for the median US household income of $50,000:

$150,000 mortgage at 4.5%

Principal and Interest =            $760

$150,000 mortgage at 3%

Principal and Interest = $632

$180,000 mortgage at 3%

Principal and Interest = $760

This is the big change here.  All else being equal, that drop from 4.5 percent to 3 percent allowed the typical US household to purchase $30,000 more of a home without any real income growth.  This is all well and good but now, unless real incomes go up, the Fed has to continue to push rates lower or face a stagnant market.  Japan provides a really good example that even with mortgage rates at zero percent, longer-term unless you see real economic activity and productivity pick-up with real wage growth housing values will end up becoming stuck.

While Japan was slower to realize that they had an asset bubble and react, the US acted aggressively and subsequently, our government debt is soaring much faster than Japan:

We are already hearing rumblings from within the Fed that bond buying is likely to slow down this year:

“WASHINGTON (MarketWatch) — There was a general sense among Federal Reserve officials that their bond-buying program would last, at most, until the end of the year, according to the minutes from their meeting last month that were released on Thursday.

“Several” Fed officials thought that the central bank would be able to slow or stop the purchases well before December 2013.”

Nationwide we have already seen a lost decade in home prices.  In 2012 home prices did go up.  Yet I see this more as a reflection of low rates and constrained supply instead of it being a healthy market.  Last year, nearly 30 percent of all home sales went to investors so you have new home buyers and families competing with these groups to bid home prices higher. Japan’s real estate values are back to levels last seen 30 years ago.  It should be obvious to people that with real household incomes stagnant, that most of this growth is occurring because of other forces pushing prices up in the short-term.

The End of a Japanese Tradition

The Japanese tradition of taking care of one's own in old age is fast headed towards extinction. The cause, as for so many of Japan's current and future woes, is down to demographics. Using statistics kindly provided by Professor Noriko Tsuya of the Department of Economics at Keio University, Beacon Reports paints a grim picture of what we, as residents of Japan, will most likely experience firsthand. Professor Tsuya serves as chair of the subcommittee on population change and economy for The Science Council of Japan. She also chairs the subcommittee on population and social statistics for the statistics committee of the Cabinet Office and chairs the committee on population projection for the Social Security commission of the Ministry of Health, Labor, and Welfare.

In many Asian cultures, including that of Japan, it is tradition for the eldest son to look after aging parents. That burden, of course, falls largely on the spouse of the eldest son. Therefore, as a group, women have been de facto primary care givers to the elderly in Japanese society. Will there be enough of them to continue this time-honored tradition given Japan's changing demography?

We all know the headline demographics — Japan's rapid aging and low birth rate means the population will shrink by one-third, down on average by about one million people per annum over the coming decades. The ratio of those of working age (aged 15 - 64) to the elderly (seniors, aged 65+) will shrink from roughly 3:1 to 1:1 so that only about half the population will be in paid employment by 2060, when those aged 65+ will represent 40% of the total population.

Figures for 2010 show about 11% of Japan's total population is aged 75+. For every 100 persons aged 75+, there are 117 primary care givers (Japanese women aged 40 - 59). And only 3% of Japan's total population is aged 85+.

At first glance, then, it would appear that the supply of and demand for informal care is in balance — the ratio of care is almost 1:1 for those aged 75+. But that's not quite the case, as on average 72.3% of women aged 40 - 59 hold jobs outside the home. The burden of holding two jobs, one formal and another informal, puts an added strain on care givers.

While currently stressed, the tradition of informal care giving could survive if not for rapidly changing demographics.

Sixty years ago, life expectancy at birth averaged 61.3 years (59.6 for males and 63 years for females). With better sanitation, healthcare and increased living standards, those today aged 65 can look forward to an average 21.4 additional years of life (18.9 for males and 23.9 for females).

Yet the fertility rate has fallen steadily since 1947. The number of average births per woman in Japan is currently 1.4, well below America's 1.9 and well below the replacement level fertility rate of 2.1, the level of fertility at which a population exactly replaces itself from one generation to the next.

Simply put, the society is aging. As a result, the percentage of the population aged 75+ is expected to increase from 11% to 20% by 2035. Likewise, the percentage of the population aged 85+ is expected to increase from 3% to 9% over that same period.

By 2060, 27% of Japan's total population will be aged 75+, with more than 13% aged 85+.

The fact is, those aged 85 - 89 are in the most rapidly growing age segment of Japanese society. That's important, because it is generally accepted that, as a group, health declines rapidly after age 85. By 2060, one-third of all seniors will be aged 85+ and by 2015 (very soon) more than 50% of all seniors will be aged 75+.
The speed of change is frightening and difficult to comprehend. As the below chart shows, Japan's population is aging faster than any other developed nation. France's elderly (aged 65+) doubled in size from 7% to 14% of the total population over the course of 126 years; Japan took 24 years to achieve the same doubling. France's elderly are expected to double in size from 10% to 20% of the total population over a 77 year period for the year ending in 2020; Japan had already accomplished that feat over a 20 year period for the year ended 2005.

The impact of rapid demographic changes on the tradition of primary care giving will be devastating. This graph shows the number of primary care givers per 100 elderly as broken out by age group.

In 2010 there were 117 and 435 primary care givers, respectively, for every 100 elderly aged 75+ and 85+.

Roll the calendar forward to the year 2035 and the story darkens. In 2035 there are projected to be, respectively, only 61 and 134 primary care givers for every 100 persons aged 75+ and 85+.

Roll the calendar forward even further to 2060 and there will be, respectively, 43 and 87 primary care givers for every 100 persons aged 75+ and 85+.

To add to the troubles, the historic trend of increasing female employment is expected to continue. This chart shows between 2012 - 2030 another 7.4% of primary care givers will likely join the workforce, taking the average women aged 40-59 in paid employment to almost 80%.
Care workers will therefore be far outnumbered and overworked. Beacon Reports asks, who will take care of the elderly? By 2060, perhaps much earlier, the tradition of primary care giving will be a fading memory.

Professor Noriko Tsuya of the Department of Economics at Keio University. The projections presented in this report are based on the most likely expected outcomes. The statistical degree of error increases with the length of projection. Short term projections are likely to be more accurate than those that are longer in term. All opinions, based the statistics provided by Professor Tsuya, are that of Beacon Reports alone.