Japanese Stock Market Crash

Japan is a superpower of Asia. It has a strong economy which is growing rather impressively. But there was a time when the economy of Japan was, to put it simply, booming. Then the per capita GDP of Japan was the highest in the world, and the living standard was best among all the countries of the world. All this ended with the major Japanese stock market crash that started in1989, and which is still continuing.

The economy of Japan had become very strong, as it had greatly recovered from the devastation brought about by the Second World War. In the later half of the 20th century, Japan became a strong economic force on the world map. The industries in Japan were booming and Japan was developing in every sector. It was a utopia like situation when everything was going just perfectly in favor of Japan.

This situation developed because there was perfect cooperation between economy, business and government. Government was providing full support to all the sectors, and laws were made in accordance with the industries to promote them. In a typical business style, Japan was now famous as Japan Inc. that very well described the strength of Japan's economy.

Suddenly, Japan became the center of investment for the investors all across the globe. They came to view Japan as a land with eminent growth potentials. In the 35 years between 1955 and 1990, the stock prices of Japan increased by a mind blowing 100 times. Not only that, the land prices in Japan increased tremendously and become almost 70 times of the normal price.

But gradually, it became evident that the economy of Japan has become a bubble. It is going to collapse anytime, as it is standing on a false hype, and not on strong financial base. But, the industry-government cooperation in Japan was so good they thought that this growth will continue forever. This proved to be a huge mistake on their part.

Simultaneously, an inverted growth cycle was generated all by itself when the people, who were selling lands, started using the book value of their land to buy other stocks. This was a kind of fraud that was done to purchase American assets. This corruption hit Japan's economy strongly. It was bound to lead to a crash in the stock market.

Japanese stock market crash is considered the biggest ever crash in the history of the world. It is viewed by the experts and industry analysts as bigger than even the American Stock Market Crash.

frank j vanderlugt owns and operates http://www.japanese-stockmarket-now.com Japanese Stock Market