1In September 1985, the finance ministers of the United States, the Federal Republic of Germany, Japan, France and Britain signed the Plaza Agreement and decided to agree to the depreciation of the US dollar. In order to stimulate the development of Japan's economy, the Central Bank of Japan adopted a very loose financial policy to encourage funds to flow into the real estate and stock markets, which led to the skyrocketing real estate prices.
After the depreciation of the dollar (a large amount of additional dollars), a large amount of international capital entered the Japanese real estate industry, further stimulating the rise in housing prices. Tempted by the sharp rise in house prices, many Japanese people began to lose patience. They found it faster to speculate in stocks and real estate, so they took out their bank deposits and speculated.
By 1989, the real estate price in Japan has soared to a ridiculous level. At that time, the land area was equivalent to California in Japan, and its total market value of land price was equivalent to four times that of the whole United States. By 1990, the land price in Tokyo alone is equivalent to the total land price in the United States. The average working class can't afford to buy a house in a big city even if they spend all their life savings. Only billionaires and executives of a few big companies can afford to buy a house.
199 1 year later, with the profit-making withdrawal of international capital, the Japanese real estate bubble driven by foreign capital quickly burst, and the real estate price plummeted immediately. By 1993, Japan's real estate industry had completely collapsed, with personal bankruptcy and enterprise closure, leaving behind bad debts as high as $600 billion.
Judging from the consequences, the Japanese real estate bubble that burst in the 1990s was the one with the longest impact in history. This bubble not only hit the real estate industry hard, but also directly triggered a serious financial crisis. Affected by this, Japan ushered in the longest economic recession in history and fell into the depression and depression of 15 years. Even now, the Japanese economy is not completely out of the shadows.
People often call this real estate bubble "another defeat of Japan after World War II" and regard the 1990s as Japan's "lost decade".
Extended data
The bursting of the real estate bubble is often accompanied by economic depression, stock price decline, and the financial operation of enterprises is gradually in trouble. The falling stock price makes a large number of convertible corporate bonds issued by enterprises unable to be converted into equity for a long time, thus bringing huge debt repayment burden to enterprises; In addition, the decline in land prices and stock prices has also caused enterprises to suffer huge asset evaluation losses and sales losses of forced sale of land and stocks.
The decrease of enterprise income makes the investment insufficient, which not only reduces the investment level of research and development, but also reduces the investment of enterprises in equipment. The decline of production leads to the deterioration of employment environment and the decline of residents' real income.
Business failure means a large number of unemployed employees, even if there is no business failure, due to the decline in income, will continue to lay off employees. In addition, the decline in land prices also devalues the land assets held by individual residents. Due to the economic recession and the decline of personal income level, residents are worried about the future to varying degrees, so they will reduce their current consumption and expand the savings part of their income to prevent accidents. The shrinking of personal consumption has put the industrial sector that produces consumer goods in trouble.