Japan Redux: A Video Case Study Of The Upcoming U.S. Lost Decade

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Sat, 08/07/2010 - 22:04 | 509234 SWRichmond
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We're for sure going to lose a decade at least, but it won't be Japan-style.

Sat, 08/07/2010 - 23:08 | 509289 Lux Fiat
Lux Fiat's picture

I'm thinking tango and empanada-style, circa 1997-1999.  Unlike Prince, the party's ooover.

Sat, 08/07/2010 - 23:44 | 509307 Pamela Anderson
Pamela Anderson's picture

This article about Goldman Sachs is great!!!!


Why founding a three-person startup with zero revenue is better than working for Goldman Sachs.


"... go out and write your own story, or you’ll just be a character in someone else’s..."   what a great article!!!

Sun, 08/08/2010 - 10:27 | 509476 Bendromeda Strain
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It would appear some juvenile is running through the thread with a can of spray paint. Go eat your cereal before it gets soggy little junk warrior. Anarchists - so cute when they're little...

Sun, 08/08/2010 - 00:43 | 509333 jdrose1985
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Well we already have, actually, given the Dow/Gold ratio.

We're working on the second as I type this.

We're just making it look easy ;)

Sun, 08/08/2010 - 14:02 | 509614 midtowng
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Now why would you want to go and scare people like that? Denial is a way of life in America.

Sun, 08/08/2010 - 16:04 | 509701 Eally Ucked
Eally Ucked's picture

why not, it's maybe worse than you think. What the fuck we produce the world needs except arms? You want your banks prosper, sucking money from lower classes, your service industry trive on money never made, sorry, they made it already and the last bastion of prosperity is trading - shit back and forth and it's over! Now is the question how to survive? Don't give me those fucken charts to support further expansion of US economy based on somebody's else money, that's past, lets look what we are facing now. Lets /sarcasm/build more houses, financed by who knows who, and get all those interest rate profits for the banks, everybody in the world wants to get to US to get pedicure or manicure, they will travel thousands of miles to do it.

Sat, 08/07/2010 - 22:04 | 509235 Caviar Emptor
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If you're a consumer or small business caught between deflation and inflation, it doesn't take very much of either to kill you. It doesn't need to become "hyper"inflation if your income, assets and employment prospects are deflating. You burn through all your savings, credit and then join the ranks of food stamp recipients. Similarly for a small business, margins get savaged fast, forcing cutbacks and cost-savings measures that feed on themselves. 

That's why the current situation is so precarious. The Fed can no longer afford the luxury of "Print, baby, Print!". That would quickly inflate the economy into oblivion. 

Sat, 08/07/2010 - 23:10 | 509291 theone
theone's picture

I completely agree either will kill the economy. I believe that deflation will be better for the future. It will teach people to become responsible and not become so complacent. Any sort of inflation will further increase the gap bettween the rich and the poor and rewards bad behavior.



Sun, 08/08/2010 - 00:10 | 509320 Oracle of Kypseli
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Agree Caviar. There is no way out.

The reason Japan has survived, is that the debt is held by the Japanese people and Japan was still able to export its way since the world had been stable.

This time around, if deflation sets in, the US can not export its way out, as the whole world is suffering. If Hyperinflation gets a foothold, all bets are off within months.

Either way, much suffering.

Agri-land, gold & silver coins, guns & ammo, spam and dry food for those who can.

Sun, 08/08/2010 - 02:27 | 509376 mudduck
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The fed will only print if the banksters want them to. So there are 500 trillion(?) in derivatives floating around out there mostly with the big US banks, and a whole lot of them are interest rate swaps. If inflation drives up the cost of holding cash (and thus interest rates) do the banksters collect or pay? If they pay, the fed won't print until it's to late to stop a deflationary spiral, because the banksters will wanna make sure that everyone can see there will be no inflation first. If it  goes that way then the gov. might just decide to handle the creation  of 'money' itself, then watch out, all bets off. My 2 cents. 

Sun, 08/08/2010 - 11:11 | 509510 Kayman
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So who is on the other side of these economy killing bets?  Oh, yeah, ultimately the U.S. taxpayer.

And the Government already prints the money, creates or supports the creation of credit. About a dozen boys in New York and their conspirators in Washington are in charge of the printing press.

Without the Fed buying Treasuries through other Central Banks and the Primary Dealers every Treasury auction would fail.

Dinosaurs were too big and they failed.  These financial monsters are too big and they must die. Or the country is lost.


Sun, 08/08/2010 - 12:02 | 509541 mudduck
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The fed has not printed out in the open to help the government yet, only to help the banks. If they (the fed) are buying treasuries through whoever, they are not doing it in the open, so I'm not sure that government does have control of money supply at all. If they did I think these guys would have everyone in a new house with new appliances and cars by the next election cycle, and the dollars time would be numbered in days instead of months/years. As for the solution to the problem of the fed having control of the printing press (and their real job being to transfer all of the wealth to their masters), I don't know. Audit them, charge them, then hang them if you want, but just turning over the keys of money creation is not the answer (especially not to the IMF or BIS or any of that lot). The obvious answer is a gold standard currency, but first the doors to the US gold vaults need to be opened to make sure that there is gold left still, because if there isn't then its the same guys in charge of currency creation again.

Sun, 08/08/2010 - 12:35 | 509557 Max Hunter
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Speaking of; do you think there is gold in the vaults?.. I don't. Otherwise, we would have seen an open and public verification of it.

Sun, 08/08/2010 - 12:50 | 509567 mudduck
mudduck's picture

I agree.

Sun, 08/08/2010 - 15:51 | 509689 Kayman
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Wink, wink, nod, nod, of course the Fed is NOT playing patty cake with other Central Banks and Primary Dealers. Otherwise they would be happy to declare it... No ???

To limit panic selling of paper assets the Fed won't even deny what they are doing.

The ultimate Fed solution is to bust up the big banks. More government and more banking crooks is the last thing this country needs.

Until writedowns occur in the used-toilet paper assets with the attendant haircuts in liabilities and ultimately the bankrupties and break-up of the smart-ass TBTF crowd this country is sunk.

There is no possible GDP growth rate to support the money printing and debt creation that has occurred (is occurring) to paper over the worthless TP held by the TBTF and now the Fed.

Our national balance sheet needs a haircut in the $15-20 trillion dollar range. Without the haircut this nation is doomed to beggar status soon.

Sat, 08/07/2010 - 22:41 | 509269 1100-TACTICAL-12
1100-TACTICAL-12's picture

Watched most of the video. There is job's job's to be had in Japan unlike here. Me think's that is the difference. Credit or Debit? Credit PLEASE.

Sun, 08/08/2010 - 10:25 | 509474 Bendromeda Strain
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I too bailed out after 2/3 as the point was made. He did not however refute any of the points made in the NIA video. And the cultural differences are of course stark - we ain't "turning Japanese" anytime soon if Peggy Joseph has anything to say about it (and she currently still does). Credit PLEASE - it's still the American Way (for the sub 600 FICO).

Sun, 08/08/2010 - 10:34 | 509479 Rusty Shorts
Sun, 08/08/2010 - 23:54 | 510145 mariner22
mariner22's picture

OK - so our unfunded liabilities + debt is (slightly?) less than $80 trillion dollars and our Debt to GDP isn't really 560%. Time to party like its 1999 again?

I've seen videos from NIA periodically from Zero Hedge. I didn't even know they pumped stocks. I thought they just pumped gold. Just like Peter Schiff, Eric Sprott, et al. It is fine to attack the messenger, but I am more interested in attacking the message. $1.4 trillion budget deficit this year? 9.6% unemployment? Pension deficits of 2-3 Trillion. Plan to "cram down" agency mortgage rates & debts with the public picking up the tab?

God, things are going so well. Forget gold as the NIA guy pumps (although in a poorly publicized fashion) companies that pay him. Got to get more 10 year US Bonds before Benny brings the yield to 1%!

Sat, 08/07/2010 - 22:25 | 509253 Oswald Spengler
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Japan- land of sliding doors and slant eyed whores.

Sun, 08/08/2010 - 10:53 | 509501 MountainHawk
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The babes walking around Tokyo, wow, god I miss Tokyo!

Sun, 08/08/2010 - 11:10 | 509512 Perseus son of Zeus
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Sun, 08/08/2010 - 17:16 | 509785 ozziindaus
ozziindaus's picture

This has got to be a junk record. BTW, noticed the Afro American "pimps" outside the massage parlors in Roppongi speaking perfect Japanese? Freaky. 

Sat, 08/07/2010 - 22:26 | 509254 nmewn
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Life imitating kabuki.

Sat, 08/07/2010 - 22:58 | 509267 theone
theone's picture

Our deflation will be much worse than Japan's due to a much lower savings rate to begin with which is now rising. I expect the savings rate in the US to exceed 10% by the end of Q111. That will diminish final demand and throw us in a deflationary spiral. This is the reason why I believe that yields are so low. I do not see hyperinflation without rising incomes and home prices, and with an increasing savings rate.

Sat, 08/07/2010 - 23:21 | 509299 Oswald Spengler
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I know it is popular to espouse deflation now and that is what the illuminati want you to se, but the dollar has no clothes. inflation is the only face saving response when you're swimming naked and all the girls are watching.

Sun, 08/08/2010 - 00:44 | 509334 jdrose1985
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the illuminati just called, they have some gold they'd like to sell you.

Sun, 08/08/2010 - 10:49 | 509495 oddjob
oddjob's picture

Is it the tungsten or paper variety?

Sun, 08/08/2010 - 13:57 | 509609 tmosley
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Just a hint:  mentioning illuminati makes you look like a nutcase.  Call them "bankers" or "politicians", or "insiders", and you'll look a lot less looney.

Sun, 08/08/2010 - 09:59 | 509467 aurum
aurum's picture

with all of our liabilities, it is impossible for the fed to accept deflation. impossible. this mindset will pave the way to not only the dollar end game but also the end of all other fiats regardless of final demand. and if the rest of this country wakes up, the savings rate of 10% you mention will be denominated in hard assets rather than paper ie gold, silver, oil, ag, energy or self sustaining energy technology...the only thing holding the dollar up right now is our overstretched military.  

Sun, 08/08/2010 - 10:58 | 509502 Max Hunter
Max Hunter's picture

++.. Exactly.. way too much debt for deflation to be the answer or remedy or result.. .. you are right.. impossible..

Sat, 08/07/2010 - 22:38 | 509268 rapunzel
rapunzel's picture

well, i really really really like your theme you got going here, mr durden.

damn, no S H A M E  from these guys, only from the geisha's, right.

your g o o d, your real g o o d.


Sat, 08/07/2010 - 22:43 | 509275 Hammurabi
Hammurabi's picture

hahaha you are sow innocent, there is no such a thing us deflation

Sat, 08/07/2010 - 23:03 | 509282 CashCowEquity
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What effect will inflation have on Life Insurance, annuities and the same for deflation?

Sun, 08/08/2010 - 00:38 | 509329 Oracle of Kypseli
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In an inflationary scenario, you will be getting your annuity, but it will have lesser buying power. In a deflationary scenario, you may or may not be getting all your annuity, but if you do, you will have higher buying power for discretionary items but not necessarily for food and shelter.

Sun, 08/08/2010 - 10:32 | 509481 Bendromeda Strain
Bendromeda Strain's picture

Correct - at least "austerity" preserves some purchasing power for the fixed income defenseless. It also has a tendency to force the legalized embezzlement (think Bell CA) out into the open. Runaway or hyperinflation punishes all but the workers who are either self sufficient or can demand wage adjustments on the fly.

Sun, 08/08/2010 - 11:52 | 509539 masterinchancery
masterinchancery's picture

Great question! Hardly any have inflation trackers, so serious inflation means you have paid for an utterly worthless payoff.  Deflation is obviously good for the policy holder, except that the company may well run out of funds before they pay you.

Bottom line, if you see either one starting at a serious level, cash out as fast as you can.

Sat, 08/07/2010 - 23:05 | 509285 Gimp
Gimp's picture

Best thing out of Japan in the last decade - "Ninja Warriors"

Sat, 08/07/2010 - 23:41 | 509306 repo 105
repo 105's picture

I would have to say "rub-and-tugs" the best export myself.

Sun, 08/08/2010 - 10:48 | 509496 Perseus son of Zeus
Perseus son of Zeus's picture

Everyone in Japan seems to be inventive. I know some circuit designers who would blow your mind with depth of knowledge in their field.

But is the US headed to this extreme while we wait for the decade of nothingness to end?


Sun, 08/08/2010 - 15:03 | 509660 Rusty_Shackleford
Rusty_Shackleford's picture

No way.  Not even close.


It's clearly "Schoolgirl-Worn Panties Vending Machines"


Sun, 08/08/2010 - 17:25 | 509795 rapunzel
rapunzel's picture

rusty rusty rusty, shackle me, oh i mean this --!--

japan, culture with a long history of regarding woman more as sex toys than people. true?

Aristotle believed woman are colder than men and thus a lower form of life. pretty much spells it outright, there mr. A. plus, he also believed that females could not be fully human.

these are the kind of conversations i would like to have .

Sun, 08/08/2010 - 22:32 | 510083 New_Meat
New_Meat's picture


"these are the kind of conversations i would like to have ."

please, let down your hair.  We await your comments.  We will add in commentary from Sanger and Teddy R. as necessary.

dang, I like long hair in a woman.

- Ned



Sat, 08/07/2010 - 23:11 | 509286 FranSix
FranSix's picture

You can gainsay U.S. debt all you like, but the fact of the matter is that Japan's economy is very dependant on social obligations.(including employment)  In fact, its economy is so dependant on government spending that it would make the U.S. social programs look like some sort of Dickensian-era pickle-up-your-butt fiscal rectitude.

All of the mounting trading losses are coming from a decline in interest rates, and everybody still believes that interest rates will rise because you have 'social programmes.'  Give me a break.  What a scam.

And, quite frankly, peak oil theories which cast America as being totally dependant on Arab producers is totally out of whack with reality.  America is the third largest producer of oil in the world.  And American oil producers are firmly ensconsed in the middle east, which nobody can do anything about.


Sat, 08/07/2010 - 23:46 | 509305 Suisse
Suisse's picture

U.S. oil extraction has been in decline since 1970. Peak Oil is a geological phenemon. Simply because a U.S. company is developing foreign oil fields does not mean the oil must come here. Most of the Arab countries have state owned oil companies, not U.S. companies.


Extraction is around 8 million barrels per day, imports closer to 10 million barrels per day. However most of the oil imported is not from Arab states, but oil is of course fungible so a shortfall from elsewhere can affect imports. http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS1&f=M

Sat, 08/07/2010 - 23:54 | 509313 VK
VK's picture

Peak oil is not a theory. It's a geological fact. Onshore oil production peaked in 1982, why else would companies spend billions of dollars developing offshore fields 30k feet deep? Denying reality doesn't mean it stops existing. It just makes the eventual punch a lot harder.

Sun, 08/08/2010 - 00:42 | 509331 tmosley
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Because laws, regulations, and NIMBY make drilling new wells on shore, or in shallow water uneconomical?

The more I think about it, the more I think that peak oil in the US is a political phenominon, rahter than a geological one.  Much liike we had "peak manufacturing" during that time as well, as new onerous laws and regulations ground new projects to a halt, and forced many of them overseas.

Sun, 08/08/2010 - 06:21 | 509412 i-dog
i-dog's picture

How do you expect to buy oil from overseas sources when the USD loses reserve status (and all credibility)?

The US will go into Iran by hook or by crook, because it has no other choice to ensure supplies that it will otherwise not be able to afford to purchase in a year or so.

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