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Japan & The UK Enter A Recession

In a sea of news over the last few days, American’s will be forgiven for not noticing that both the United Kingdom and Japan have both officially fallen into a recession, and many more major economies are expected to follow suit.

But, the data is actually much worse than most people realise, especially in the UK’s case, but we’ll get onto that in a moment.

Japan’s Trouble Looms

It isn’t exactly a surprise that Japan is in the news for a falling economy, as it’s been plagued by these problems for more than 4 decades at this point.

But the last few years Japan had been performing better than it’s trend, up until now.

what does this actually mean? Japan’s economy has fallen for two consequetive quarters.

(Despite what the Biden administration would like to be the case, that is still the most common definition of a recession)

In real numbers, their GDP has fallen by -0.4% over the last year, which is not a substantive number on its own.

The shocking figure is that their GDP fell by -3.3% over the last quarter, a much more serious decline.

To make the matter worse economists were expecting Japan’s GDP to grow by 1%, so this dramatic fall is a very serious departure from expectations.

In fact, Japan has now slipped from the 3rd largest economy in the world down to 4th, just behind Germany.

The reasons for this major drop isn’t entirely clear, but it is definitely in large part related to the deteoration of the Japanese Yen compared to the US Dollar.

But, this drop in the Yen has helped to boost Japanese shares by large amounts, with their export driven market performing well with a weaker home currency.

The UK Is In A Far Worse Position

On the surface, you would be forgiven for mistaking the UK’s economy for not being in as much trouble, as headline GDP figures showed only a -0.3% decline in the last quarter of 2023, and -0.1% the quarter preceding that.

However the real issue is that these are headline GDP figures and are not weighted for population changes.

If you aren’t based in the UK, there’s a strong chance you haven’t been made aware of the demographic crisis the UK is facing, but it’s the opposite of the demographic crisis in Japan.

Over the last year, there were net migration figures of more than 800,000 people. That represents more than a 1% increase in population over the last year alone.

And lets not forget that is as headline GDP figures are falling. GDP per capita figures paint a far darker picture.

Adjusted for population, GDP per capita figures show that the UK’s economy has been in decline since early 2022, with the average Brit getting 1% poorer over the last 2 years, with not a single increase in wealth amongst our average citizens.

But the problems don’t even end there, as illegal and undocumented immigration into the United Kingdom has been occuring on a monumental scale over the last decade.

There are an estimated 8 million people living within the United Kingdom who are not recorded in the governments figures, meaning in reality GDP per capita figures should be roughly 12% worse than the government claims.

To put this into perspective, the true GDP per capita of the UK likely lies around $41,000 USD compared to the $70,000 figure of the United States.

In fact, the United Kingdom is poorer than every single state in the USA, and Canada, And Australia.

And the numbers show that things are only going to get worse going forward.

Needless to say, as patriotic Brit, it is painful to witness our needless decline first hand, especially when it would so easily be avoided by a political class that weren’t woefully corrupt.

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