The economic growth rate of the last year is -2.5%, the worst since the possiblity wars began. Civil housing investment was decreased by 9.5%, and capital investment falled by 13.3%. The consumer price index dropped by 0.3%. And the unemployment rate recorded 4.4%, the worst in the past 50 years (the unemployment rate is estimated to rise 5.4% in 1999). The stock price recorded the lowest in the past 20 years. Even yen, once the strongest currency in the reality-torn earth, have fallen. Japan is in the midst of deflation-stagnation spiral without a wayout.
We must admit that our misscalculation is the greatest reason of the recent depression. Our first invasion plan, including the junk-bond pyramid scheme, was based on the assumption we would quickly conquer Core Earth economically. Since our inroad to California was blocked by Tharkold, the weaknesses of our invasion plan have surfaced one after another. Now it come to light much of the junk bonds are irrecoverable, making Japanese banks and nonbanks sick badly with bad debts. It seems that we have consumed Japanese capitals too fast.
Also the Rauru Block showed its surprising toughness to resist our invasion. Yamaichi, one of the oldest and most respected stock broker houses in Japan, was forced to go out of business after the long bloody war against a Rauru megacorp (see CNN news). They also cornered Long Term Credit Bank (LTCB) so that we had to have Japanese government to rescue (see CNN news).
Another major problem is the low consumer mind. The sky-high crime rate, social unrest, the growing jobless rate have constricted consumer's expense. However, they saw Yamaichi and LTCB went collapsed so they have lost trust in Japanese banks and brokerages. They now prefer foreign currency bonds and investment such as conjuration future in the London Stock Exchange. The flight of Japanese capital is causing a considerable credit crunch, adding another difficulty to Japanese economy.
Here is a few plan for reviving Japanese economy. First, we can increase the export of our products. The sales of our main export goods -- weapon -- have been dropped since the wars came stagnant, so we have to inflame the wars. We should intrigue to make High Lords more aggressive against Core Earth nations. We can even induce Core Earth nations infighting each other.
Another plan is to increase the internal demands. This is tougher than the first plan because of the low customer mind, and normal goods or service cannot appeal the mass. The only reasonable solution is to sell special goods and services, including addictive drugs, gambling and prostitution. Apparently the legal matter is the largest obstacle for the sale, thus the abolishing the legal regulation will be the first step. We can surely gain the upper hand of the Rauru Block at this special service market, because we can use our experienced ally, yakuza.