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Japan Redux: A Video Case Study Of The Upcoming U.S. Lost Decade
Whether one believes in inflation or deflation, one thing is certain: in many ways the current US experience finds numerous parallels to what has been happening in Japan for not one but two decades. While major economic, sociological and financial differences do exist, the key issue remains each respective central bank's failed attempts to reflate its economy. While long a mainstay of Japan, if the first failed version of our own QE, which pumped $1.7 trillion of new liquidity into the system, is any indication, future comparable efforts by our own Fed will be met with the same outcome (and hopefully with the same political result: the half life of an average Japanese prime minister is 6 months - if only our career politicos knew their tenure in office could be capped at half a year...). There is of course the "tipping point" optionality discussed earlier by Ambrose Evans-Pritchard, when comparing the hyperinflationary timeline during the Weimar republic, which noted that it took just a few months for the economy to slide from a period of price stability to outright hyperinflation. Either way, for an ironic look at the Japanese deflation scenario, targeted more at novices although everyone will likely learning something from it, we present the following informative clip from, ironically, the National Inflation Association, which asks whether Japan is a blueprint for America's imminent lost decade(s).
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The US is already in exactly the same type of high aggreate debt/low bond yield trap the Japanese are in for 20 years. Open your eyes. Look at GDP, inflation, excess reserves, corporate bond issuance. The signs are all there.
No, all this is not inflationary, quite to the contrary. We're in for 10-20 years of a long, slow, painful sideways grind with
* low, positive inflation
* flat real GDP
* high unemployment
* flat corproate profits
* frequent recessions, approx. every 3-4 years
At the end of all this government debt to GDP will be 200% and private sector debt as a % of GDP (corporations and private households) will be cut in half. Foreign holdings of US debt (on a % basis) will shrink and domestic holdings of US debt (against, on a % basis) will go up sharply as banks, corporations and private individuals shun debt. Banks and financial corporations such as insurance companies and pension funds specifically will keep buying US government bonds just like the Japanese banks were buying and are still buying JGBs with both hands.
TIC data showing higher domestic holdings of Treasuries already. I agree with you that this trend will persist.
I wonder if these holdings will translate into greater volatility in spite of that trend.
I agree with your outlook for the U.S. And there are other parallels between the U.S. and Japan since 1989, including an ageing population. Which begs the question of whether the U.S. should consider the perhaps somewhat risky policy option of significantly increasing immigration quotas, an option which so far has not been seriously considered in Japan. (I do not mean increasing the number of people in landscaping.)
Immigration doesn't even fix the "aging population" nonsense. If we doubled immigration rates to even more redicolous numbers not only would the country rapidly turn into an overpopulated alien nation but the worker to retiree ratio would only increase by a mere 1%. You should be able to find a number of studies on google. People need jobs to fund the safety nets, importing third world peasants does not mean they have a job. You can try importing the wealthy, but I don't know if they'd really be interested in coming. Better yet, scrap the safety net ponzis or tell people they need to have 3 children and a college education at minimum in order to qualify for social security. I'd favor increasing the retirement age significantly.
http://www.lifesitenews.com/ldn/2006/sep/06092706.html
This begs the question, if the social safety nets require an increasing population, we would rapidly be at 500 million and still growing. Overpopulation is not merely something that happens in Asia. There are resource limits, and they aren't related to empty land. It's physically impossible for there to be 500 million people in the U.S. with a qualify of life similar today with anything larger than a domesticated dog not going extinct.
Why do you think Obama keeps talking World this or that? From global governance and world economy to open borders. Share the wealth.
You got that right digalert. Check out George Soros open borders initiative. These douche bags are trying to get us in one big room so they can feed us their toe nail cheese.
The stock market is already there. Big irrational jumps based on the latest government handout rumor, no real volume, no interest by retail investors and a long painful down trend.
As long as the half-pipe stays this deep, surf the trough, peak to valley to peak and again.
Use to be not long ago 30 S&P points would violently rattle the system. Not anymore.
Make Tyler happy, trade some pennies. (couldn't resist)
<b> nitwits </b>
deleted
-wrong thread- delted.
economic crash predicted in "Rollover" in 1981...
http://www.youtube.com/watch?v=GPYLJoq_40Y
war on iran solves this problem. 90% of japanese oil imports will see insane rise in dollar price. they then give the saudi arabia these dollars. the u.s. then burns this money and makes it dissappear IE....the saudis will be forced to buy more citi bank and other insolvent bank stock. . the saudi's have no choice if they want to stay in power.
this is really a genius way to go. oil UP dollar STRONG. OIL UP is the US strategy for forcing the rest of the world to save INVEST dollars into the u.s. financial sector via saudi arabia. all the lefties out there who would rather see the U.S. collapse are foolish, because not only will high oil prices help maintain the u.s. dollar but it will also help us transition to solar and alternative based energy over time. so this DOES work well for the whole world. capitalism and war win (at some sad expense to humanity--but hey....someone has to feel the pain)!
ZH. scrub my 2 posts from Friday, you were to consider that information as tinfoil. winks.
Thank you for sharing.
I haven't yet read any comments about the US coming out unscathed (maybe slightly bruised) but instead China falling into decades of deflation (broken boned). More chance of that in my opinion. History shows more evidence to back my case than an oversimplified comparison to a culture polar opposite to that of the US.
Who are these guys anyway? A 15 minute internet search brings no result apart from the hypothesis they may be funded by some gold & silver interests.
Any ideas?
Can someone post the video link in the op please?
http://www.youtube.com/watch?v=udT3dbbryEU
DOW and SP500 weekly charts update :
http://stockmarket618.wordpress.com
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.
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