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The US Is Not Japan Or Your Average Stagnation: It Is Much Worse

Tyler Durden's picture


Every day we are told how this recovery is the slowest since WWII and that nothing is working. Well, we think we can trump that for dysphoria. Not only is this the slowest recovery since WWII, it is even slower than the average 'stagnation'. Based on Goldman's analysis of 93 stagnations the US GDP per capita is growing even more stagnantly than ever (and dramatically worse than during Japan's 'lost decade').


US GDP per capita is still below its peak, well below the average crappy 'stagnant' recovery, and dramatically below the Japanese stagnantion...

Good times, people.


Source: Goldman Sachs


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Thu, 07/26/2012 - 14:10 | 2653882 SheepDog-One
SheepDog-One's picture

'Decade of Hell' or something...but its all good DOW will be 25,000!

Thu, 07/26/2012 - 14:12 | 2653897 financial apoca...
financial apocalyptic contagion's picture

The US is not Zimbabwe
We got better quality toilet paper here, easier on the ass 

Thu, 07/26/2012 - 14:13 | 2653903 knukles
knukles's picture

Durned tootin'.  We's Humeruchuns an we're best at everythin'

Thu, 07/26/2012 - 14:28 | 2653955 Aziz
Aziz's picture

Dow 36 trillion, bitchez.

Thu, 07/26/2012 - 15:05 | 2654049 economics9698
economics9698's picture

It's all in your head.  Vote Hope and Change part II. /sarc

Thu, 07/26/2012 - 16:36 | 2654502 AldousHuxley
AldousHuxley's picture

"Hope" is all America's got.


Elites are very afraid.....Take hope away from America and you got anarchy.


Hope of becoming rich one day.

Hope of going to heaven when you die.

Hope of becoming famous .

Hope of joining the elites is what keeps non-elites enslaved.



Thu, 07/26/2012 - 20:16 | 2655149 Nehweh Gahnin
Nehweh Gahnin's picture

"Take hope away from America and you got anarchy."

I HOPE so.

Thu, 07/26/2012 - 14:45 | 2654003 Sudden Debt
Sudden Debt's picture

you would think that...
but Zimbabwe didn't use metal safety strips in their currency notes...

Thu, 07/26/2012 - 16:07 | 2654321 financial apoca...
financial apocalyptic contagion's picture

Oh snap!
Long Zimbabwe dollar

Thu, 07/26/2012 - 18:02 | 2654811 youngandhealthy
youngandhealthy's picture

Your potential president is making "friends" with your former rulers


"...In the NBC interview, Romney described reports of security problems with the summer games as “disconcerting,” and said, “It’s hard to know just how well it will turn out...”


The response:

"...Of course it’s easier if you hold an Olympic Games in the middle of nowhere,” a remark interpreted as a reference to the games organized by Romney in Salt Lake CityUtah.

Thu, 07/26/2012 - 14:13 | 2653900 Concentrated po...
Concentrated power has always been the enemy of liberty.'s picture

& bananas will also be $25,000.00

Thu, 07/26/2012 - 14:17 | 2653915 Silver Bug
Silver Bug's picture

The US economy has driven off the cliff. It just hasn't looked down yet.

Thu, 07/26/2012 - 17:05 | 2654651 Stuck on Zero
Stuck on Zero's picture

Smooth sailing ahead ...

Thu, 07/26/2012 - 14:34 | 2653973 valley chick
valley chick's picture

looks like they are getting a running start today. :(

Thu, 07/26/2012 - 14:09 | 2653883 Debtonation
Debtonation's picture

Is the recession over yet?

Thu, 07/26/2012 - 16:04 | 2654308 TPTB_r_TBTF
TPTB_r_TBTF's picture

Which recession?  The US recession has been over for years (2009).

Thu, 07/26/2012 - 14:10 | 2653884 DrDinkus
DrDinkus's picture

Paging Robert Brusca....


seriously, did that guy get eighty-sixed ?

Thu, 07/26/2012 - 14:11 | 2653891 Jack Sheet
Jack Sheet's picture

Rubber Scrota here. Howdy.

Thu, 07/26/2012 - 14:11 | 2653885 zerotohero
zerotohero's picture

down the rabbit hole - now which pill should I take.....

Thu, 07/26/2012 - 14:14 | 2653907 knukles
knukles's picture

That one that makes you bigger.  The Jeremy Renner pill.

Thu, 07/26/2012 - 14:49 | 2654016 Remedial
Remedial's picture

One that makes you bigger,

one that makes you small

and the ones the Fed gives you

don't do anything at all...go ask Alice

Thu, 07/26/2012 - 14:53 | 2654019 hidingfromhelis
hidingfromhelis's picture

...but the ones that Bernanke gives you don't do anything at all.

Edit...Remedial beat me to it!

Thu, 07/26/2012 - 15:13 | 2654067 HungrySeagull
HungrySeagull's picture

Actually that one is called chemical restraints for those which require it.

Combative Citizens are not welcome...

Thu, 07/26/2012 - 17:36 | 2654752 TheFourthStooge-ing
TheFourthStooge-ing's picture

knukles said:

That one that makes you bigger.  The Jeremy Renner pill.

I think you mean the Ron Jeremy pill.

Thu, 07/26/2012 - 23:49 | 2655520 StychoKiller
StychoKiller's picture

Ron Jeremy, the guy with the "big janitors?" :>D

Thu, 07/26/2012 - 14:11 | 2653886 dmger14
dmger14's picture

As Krugman says, it's because there hasn't been enough money printed.  How does a jagillion sound?

Thu, 07/26/2012 - 14:11 | 2653895 madcows
madcows's picture

Not sure what to get out of that.  Japan's lost decades is significantly better than the average of the 93 stagnations?  where's the trend line for non-stagnation just for comparison's sake.

Thu, 07/26/2012 - 14:13 | 2653902 Hype Alert
Hype Alert's picture

Whew, glad we're nothing like Japan

Thu, 07/26/2012 - 14:15 | 2653906 Arnold Ziffel
Arnold Ziffel's picture

Worst Biflation i seen in my life.


Some sectors (real estate, retail, car sales, etc) are plunging in a death spiral while others (the stuff you need---food, gas, etc) are rising.


If all these "For Sale" signs and empty mall shops are any indicator, things are gonna get much worse. If Sears or JCPenny go under, look out below..........................................

Thu, 07/26/2012 - 14:22 | 2653934 DoChenRollingBearing
DoChenRollingBearing's picture

Yes, great comment.

Thu, 07/26/2012 - 14:30 | 2653958 derek_vineyard
derek_vineyard's picture

japan's nekkei crashed right at start of stagnation 39K to 8K right away with real estate and other asset prices, their market signalled then upcoming 2 decade plus stagnation

how come in USA the stock won't crash, like other things?    don't answer this benny

Thu, 07/26/2012 - 15:22 | 2654110 tbone654
tbone654's picture

because the rest of the bailout world is taking their money and putting it somewhere not in the eurozone...  that leaves the U.S. Japan or China...  it may not be perfect, but it's better than their own currency...

Thu, 07/26/2012 - 15:34 | 2654163 MachoMan
MachoMan's picture

fade the rally...  it's basically this hilariously perverse temporary maneuver.  currencies catch a bid...  in fact mighty demand...  right before dying.  maximum pain.

Thu, 07/26/2012 - 20:17 | 2654928 Jay Gould Esq.
Jay Gould Esq.'s picture

Currencies catch a bid
in fact mighty demand
right before dying
maximum pain.

Well-composed Haiku, Macho Man.

Thu, 07/26/2012 - 14:15 | 2653910 Bastiat
Bastiat's picture

Hate to be a prick but:  maybe there's a problem with leveraging non-productive inflating assets, spending the money on consumption and calling that GDP?


Thu, 07/26/2012 - 14:16 | 2653914 TheSilverJournal
TheSilverJournal's picture

If GDP was actually an accurate number measuring the economy, US GDP per capita would be falling.

Thu, 07/26/2012 - 14:43 | 2653999 pods
pods's picture

So you are taking offense with the description of slapping cheese on the Royale with Cheese as "manufacturing?"

We manufacture two things in the USSA, bullshit statistics and synthetic financial products.  Basically debt and bullshit.

Oh, and bombs.  Lots of bombs.  Those are single use too!  Great for the broken window theory.



Thu, 07/26/2012 - 15:02 | 2654043 Dr. Engali
Dr. Engali's picture

Yep We break their windows ,install a central banker,ship them a couple plane loads of fiat and voila another nation hooked on debt. Another added bonus is  the petro dollar is preserved for a little while longer.

Thu, 07/26/2012 - 15:46 | 2654218 TheSilverJournal
TheSilverJournal's picture

Ponzies work until there's no new suckers. The world is out of countries to expand the dollar into and the rest of the world's central banks are up to their ears in dollars. No more suckers...this thing is going to implode.

Thu, 07/26/2012 - 14:18 | 2653920 Meesohaawnee
Meesohaawnee's picture

someone tell the equity markets that.

Thu, 07/26/2012 - 14:18 | 2653921 Spastica Rex
Spastica Rex's picture

My glorius nation is never average.

We're Number 1!

Thu, 07/26/2012 - 14:28 | 2653922 Dr. Engali
Dr. Engali's picture

Clearly we aren't printing enough. Ben needs to print about eleventy trillion so we can lift off and reach orbital speed. That or blow up on the launch pad. Either way is cool, I have plenty of Pms.

Thu, 07/26/2012 - 14:32 | 2653967 kito
kito's picture

you will have to trade one of your silver dimes for my sandwich though........after this farcical ramp up based on hot air, you have zero chance of seeing any lsap this year............

Thu, 07/26/2012 - 14:46 | 2654008 Dr. Engali
Dr. Engali's picture

Lol..  They are busy building cover to print. All the stories about food prices going up due to the drought...trouble in the middle east to blame gas prices on. I'll be eating a turkey sandwich before Christmas. I hope you have some precious metals because that turkey sandwich will cost you a lot more fiat by then.

Thu, 07/26/2012 - 15:16 | 2654077 kito
kito's picture

im still banking on a massive credit implosion that will wipe every asset off of the earth.....maybe at that point, if it looks like we are heading back to the dark ages, i will pick up some pms on the cheap right after the paper market blows up...................

Thu, 07/26/2012 - 15:59 | 2654281 AustriAnnie
AustriAnnie's picture

You are planning on getting physical PM's when the paper market blows up?

Meaning, when everyone realizes paper is shit and rushes to physical, you expect to get physical at cheap paper prices?

You think that holders will actually part with the physical in that scenario?

You better be really good at timing, and you better be first in line.

Thu, 07/26/2012 - 19:28 | 2655036 kito
kito's picture

you assume that the paper market will blow up because there is a rush to physical?? perhaps it will blow up like every other market trading assets because everything has been priced too high thanks to the quintillions of digital dollars floating around, and therefore the only thing anybody wants will be physical dollars........

Thu, 07/26/2012 - 14:21 | 2653928 ripper
Thu, 07/26/2012 - 17:55 | 2654798 TheFourthStooge-ing
TheFourthStooge-ing's picture

Hey ripper, go blow a goat. Seriously. You're the same fucking spammer that was spamming crapital3x under the names props2009, reutersanalyst, and zonetraders before ZH shitcanned those accounts.

You're worse than AnAnonymous. Even though he's a mentally disordered propagandist that disagrees with everyone and everything, at least he is usually commenting on the articles, even if only tangentially.

All you do is post links that duplicate the crapital3x twitter feed. There must be something fundamentally wrong with crapital3x if their business plan is dependent on spamming.

And giving yourself a green arrow is just hella lame.

Thu, 07/26/2012 - 14:21 | 2653930 Hype Alert
Hype Alert's picture

It's not going to work.  We have the baby boomer generation about to enter the fixed income stage of their lives and they are not about to take on debt knowing their incomes are fixed going forward.  They know they will not reap the benefit of rising incomes that minimize that debt payment over the years.  Those that used their home as an ATM via debt are underwater and sure as hell can't take on any more debt.  Their children, fresh out of college, can't even find employment, so they can't take on any debt. 

Is it any wonder we're not recovering?  NO.  As Stockman said the other day, people are trying to pay down debt.  Not take on more.

Thu, 07/26/2012 - 15:41 | 2654185 sschu
sschu's picture

they are not about to take on debt knowing their incomes are fixed going forward.

This is the dilemma that Bennie etal knows too well.  Most monetary stimulus that ends up in the consumer's hands will be used to reduce leverage.  Only a small percent or the very wealthy/irresponsible will use this money for purchases.  

So, give the free money to the banks where they will gamble it on stocks or corn or let the people pay down debt. 

Neither helps GDP grow.  Such is the folly of the Central Bank and the system those brilliant folks created for us back in 1913.


Thu, 07/26/2012 - 18:28 | 2654866 Incubus
Incubus's picture

It is brilliant.


The fed is doing exactly what it was created to do. 

Thu, 07/26/2012 - 14:30 | 2653949 Mugatu
Mugatu's picture

20+ years of data on Japan's QE has shown it does not work.  There is even some support that it actually decreases economic activity.  So does this dissuade the Bernank - no!  He's too smart and obviously feels he can do it better.

Recession does not end until all this manipulation ends.  Once we stop QE, we get one year of bad growth then we bottom.  If these fuckers had just let the market fall in 2008, we would already be enjoying 4%+ growth.

I fully believe that 5 years from now Congress will do its usual - look for scapegoats in this newly created crises and they will fry Ben and the Fed.  After all, they have the perfect excuse - that they could never see the Fed's books so they never saw what they were doing.  Bernanke will eventually be hung as the culprit for this mess.

Thu, 07/26/2012 - 14:30 | 2653960 magpie
magpie's picture

Yes, but without the debt ponzi their glorious European project would not be nearing completion.

Thu, 07/26/2012 - 14:48 | 2654012 canardo
canardo's picture

Yep, sooner or later they're going to need someone to pin the whole thing on, Bernanke fits the bill perfectly. And maybe Greenspan too.

Thu, 07/26/2012 - 16:48 | 2654578 tbone654
tbone654's picture

In 5 years we might be back to Democratic "Rule"...

You know, "under me" says ruler Obama...

Thu, 07/26/2012 - 14:34 | 2653972 billsykes
billsykes's picture

"Based on Goldman's analysis..."

Stopped at Goldman.




Thu, 07/26/2012 - 14:35 | 2653977 Getting Old Sucks
Getting Old Sucks's picture

Trying to put my thoughts to words.  Since people  are waking up to the fact that they just spend future labor when they borrow, and are trying to stop that behavior, the government steps up to do that for the people by borrowing and spending their future labor.  Make any sense?

Thu, 07/26/2012 - 14:47 | 2654011 pods
pods's picture

In the 10 ring!

And they are doing it so the whole thing does not implode, as the debt has to keep exponentially expanding to keep up with the exponentially expanding interest on fractionally reserved credit "produced" by scumbag banksters and lent out to the proles at interest.


Thu, 07/26/2012 - 16:07 | 2654320 Getting Old Sucks
Getting Old Sucks's picture

I had to read your reply three times before I got it but I'm just a J6P.  Goes to show that the majority of people don't know what's happening.  Do the banksters sitting on toxic assets think that they can be replaced by good assets with government garrantees and government debt?  I'm actually asking you this question.  If so, don't the toxic assets guarantee, along with government borrowing to prop what's lost by normal borrowing only multiply what we think, or are told, is our public debt?  Is the national debt actually a lot higher than published because of this?  Not talking about unfunded stuff.  TIA 

Thu, 07/26/2012 - 14:52 | 2654021 canardo
canardo's picture

The people are expendable.

Thu, 07/26/2012 - 17:10 | 2654665 Anusocracy
Anusocracy's picture

Government is a high time-preference entity.

It eats the seed corn of whatever group of productive people it is parasitizing.


Thu, 07/26/2012 - 14:35 | 2653980 Incubus
Incubus's picture

Want a recovery? 

Make useful shit and make it in this country and pay people for it, so they can buy that shit.  In a social system, the goal is assumption of control.  You don't control by hoarding wealth and aggravating the less well-to-do.  You control them by letting them get some of that wealth and conditioning them to be good consumers. 

Not really that hard.  No amount of paperpushing wizardry is going to make anything worth buying.  Either American citizens grow a pair and decide to raise a little hell, or else the customer base will just shift to Asia and we'll truly become third world America.


And you'll do with less and less and it'll seem normal to you.  Frog + boiling water.



Thu, 07/26/2012 - 14:40 | 2653991 q99x2
q99x2's picture

Bernanke's playing with himself if the market goes up or down. If it just goes up he's in a meeting with other central circle jerkers. M'fers.

Its enough to make a guillotine drool.

Thu, 07/26/2012 - 14:47 | 2654010 AGuy
AGuy's picture

"Once we stop QE, we get one year of bad growth then we bottom. "

Unlikely, with the Federal Gov't borrowing over $1T USD every year, or about 1/7 of real GDP, its very unlikely stopping QE will solve the problem. QE is the only think keeping doors open for business. If the US was to stop QE and bailouts, the Economy would plunge into deflation as the money supporting low interest rates, asset prices would go Poof!. US Tax revenue would fall off a cliff resulting in a Hard Default. Perhaps if there was no Credit\Housing bubble created a recovery would have been possible. Once the Housing Bubble took off it was equivlent to stripping the interior of a home to keep the furnance going. The house is gutted and all that remains is a facade.

Cut spending you say, Well that would certainly result in a depression since the US economy has spent decades building an economy based upon gov't spending. (Schools, Defends, State Budgets, Local Gov't Budgets, Transportation, Retirement, Wealthfare, entitlements etc) are all depend of Federal Spending. Cutting Spending would be like forcing a junky to go cold-turkey and would probably die. If it took 40+ years to shape the economy around gov't spending, its certainly going to take more than a few years to decouple it.

Perhaps after the collapse of the US gov't a real recovery of +4% growth would be achivable. But the TPTB, want to remain TPTB, so the will go on printing and burning everything until the system collapses. Its not that QE works, it just props up a failing system and delays the collapse.


Thu, 07/26/2012 - 16:52 | 2654592 tbone654
tbone654's picture

Of course I think they were referring to a time before all the bailouts, QE, Twist, etc. where if you just let the banks fail, this would already be over by now...

Thu, 07/26/2012 - 14:48 | 2654013 WTF_247
WTF_247's picture

All you have to do to see why the economy has progressed the way it has for the past 40+ years is to answer this simple question.

What is the best way to grow GDP given that it is now based primarily on retail sales/consumption?

Answer:  Inflation.

The US economy has been moving more and more toward a consumption economy.  This means retail sales = majority of the GDP, currently at something like 80%

Inflation guarantees higher same store sales each year, regardless of volume increase.  Inflation guarantees higher sales tax revenue, even if volume is flat year over year.  This is a win/win for governments.  Inflation also guarantees a higher profit for retailers by using world wage and cost of goods arbitrage.  Raise prices by 5% (inflation) and cost of goods goes up only 2% = net -net a winner.

Inflation also guarantees GDP growth most years regardless of volume.  Consumers spend more because goods cost more each year.  Granted there is an upward bias in the number anyway because the population is growing, this is just added juice to the number.


Just my 2c.

Thu, 07/26/2012 - 14:54 | 2654026 Jlmadyson
Jlmadyson's picture

After all these years it still rings so true:

Thu, 07/26/2012 - 14:55 | 2654030 earnulf
earnulf's picture

I find it interesting that the US GDP is not going to hit the optimistic marks that the Budget Projections for the next ten years were hypothisizing.     So much for lower yearly deficits over the next ten years.   We may see that 20 T mark by 2016!~

Thu, 07/26/2012 - 15:09 | 2654058 Jlmadyson
Jlmadyson's picture

We will be there by 2015. 17T by year end with ~1.3T deficit a year.

Thu, 07/26/2012 - 15:07 | 2654053 SoNH80
SoNH80's picture

The American economy is doing great.  Why, during my lunch break, I stopped in a grocery store, and saw a 20-something EBT mama with 5 screaming kids buying about 15 lbs. of beef chops, It's All Good as Kunstler says! /s


Thu, 07/26/2012 - 15:18 | 2654093 HungrySeagull
HungrySeagull's picture

In our day we kids helped the Soldiers load the trunk at the Commisary.

Come to think of it, those trunks can hold a fortwo today.... Cold cash baby.

Thu, 07/26/2012 - 15:26 | 2654132 SoNH80
SoNH80's picture

Enjoy some welfare smokes with your welfare steaks in "conservative" NH! Corporate convenience store chain insists that you do! Work is for suckers, dude!  Party on! Make some babies 'n join the Pepsi People!

Thu, 07/26/2012 - 15:16 | 2654078 KandiRaverHipster
KandiRaverHipster's picture

"Source: Goldman Sachs"

yeeeeerrrrrrrp.  please rip on the banks some more and then use their charts.

Thu, 07/26/2012 - 15:21 | 2654105 elvinodiablo
elvinodiablo's picture

How much of the fall in GDP figures is due to increases in the black economy since this whole game began ot unwind in 2007? I see people in southern Europe who live extremely cheaply but eat and live well through barter and refusal to play in the electronic system that govt's use to collate statistics for measuring GDP. Many of these people have much better lives than the rest of us screaming at Bernanke, TPTB, TBTF, the ECB and all the other bankster, corporate mafia on ZH while slaving away for for fiat cash in financial centres and industrial cities. The game is rigged man, so the only way to win is not to play.


Thu, 07/26/2012 - 15:24 | 2654118 goforgin
goforgin's picture

How is Kyle Bass Jap call working out for him? How about his gold and guns calls?

So are we in:

a. US recession

B. Stock Market Selloff

C. QE+++++++


The answers are NO!, NO! No way. But you can believe the wrong way fairies on ZH.




Thu, 07/26/2012 - 15:51 | 2654247 Winston Churchill
Winston Churchill's picture

If you bothered to read any of numerous interviews he has given;

The Japanese bond bet is a hedge for his trading activities.

The gold and guns, are a hedge for his personal survival if that

bond hedge pays off.Because everywhere else will be in financial ruins.

Get it.

Thu, 07/26/2012 - 19:37 | 2654959 Element
Element's picture

I've been saying since 2009 that US can not follow Japan.

It's quite impossible, a simple case of lack of consumption and demand.

The Japs still had sky-high global demand over most of the last 20 years of credit mega-bubblism, that was on a scale never-before seen.  So they were static, and remain that way, when they really should have been surging, but they still they had to explosively expand public debt, just to get nowhere at all by doing so.

USSA doesn't have either option; either of effectively harnessing shrinking global demand in a depression (and even as population rises!) or of expanding public debt by >2 billion per year, for 25 years (as the upcoming US debt-ceiling ultra-circus and downgrades will confirm and make painfully clear). 

You've heard of "explosive-intensification" of hurricanes, like Huricane Charlie in Florida, in 2004?

What we're seeing is explosive debt-growth, that's going to be just as devastating and uncompromising.

So the USA is NOT going to do what Japan did, there was never any chance of it, the USA can only continue to shrivel and sink-lower.

And now Japan doesn't have its sky-high credit-driven global demand to float along upon either, so it's finally going to slip under the waves as well.

All the time pretending all is okey-dokey, were fine, ... no really ... we're go ... </glug>

Thu, 07/26/2012 - 19:34 | 2655053 GreatUncle
GreatUncle's picture

Japan was in a much better position during its previous "decade of stagnation" the rest of the world was still buying "helps a bit".

Now measure the next "decade of stagnation" what's the betting it is wprse than the previous one.

Not a good time for anybody to start into a decade or a two of stagnation.

Thu, 07/26/2012 - 23:52 | 2655521 pain_and_soros
pain_and_soros's picture


has sort of like a deer caught in the headlights sound to it...

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