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spivT

Deflation Lurks Around The Corner. So They Say.

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don't shoot the messenger ;)

http://news.xinhuanet.com/english/2009-06/...nt_11564547.htm

some choice bits..

Japan's economy was mired in a deflationary sandpit in the 1990s and took more than a decade to climb its way out, Beach noted.

ok.

Worried about the slow economy, the Japanese spent frugally. As a result, companies lowered their prices to entice consumers to buy products. That caused the Japanese to spend even less, putting off purchases for weeks or months in anticipation of further price cuts, he said.

But, i thought japanese savings rate actually went DOWN substantially as their downturn went on, albeit from a very high/healthy starting point. Were they really responding by being MORE frugal. :blink: I really don't know if all this 'japanese exacerbated their problem' bollix isn't just that. Utter bollix.

The opposite to the japanese situation is happening in the US, where a non-existent savings rate has been boosted to 8%.....so surely it's the US consumer/household who is doing the wrong thing to get out of the mire by not quite being the weapons of mass consumption as before.

Or, maybe just maybe, irrespective of the speed... once this thing get's hold it's really really difficult to achieve the rate of growth as before. And that those who point to Japan, and say we will not make those mistakes are actually doing Japan a huge disservice, and are consumed by their own hubris and arrogance (US and UK that is).

So disaster has been averted, the japanese averted disaster also. Yet the japanese are criticized for what they did wrong and they'll be lining bernanke and king up for nobel prizes soon enough. Unless we turn japanese.

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What do you mean around the corner? Its happening right now.

1) House prices down sharply from the peak (deflation).

2) British Airways working for a month for nothing (wage deflation).

Yes, QE is helping a few with the right kind of mortgages, but deflation is visible. People just don't see it yet, or call it that.

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Guest Parry
don't shoot the messenger ;)

http://news.xinhuanet.com/english/2009-06/...nt_11564547.htm

some choice bits..

ok.

But, i thought japanese savings rate actually went DOWN substantially as their downturn went on, albeit from a very high/healthy starting point. Were they really responding by being MORE frugal. :blink: I really don't know if all this 'japanese exacerbated their problem' bollix isn't just that. Utter bollix.

The opposite to the japanese situation is happening in the US, where a non-existent savings rate has been boosted to 8%.....so surely it's the US consumer/household who is doing the wrong thing to get out of the mire by not quite being the weapons of mass consumption as before.

Or, maybe just maybe, irrespective of the speed... once this thing get's hold it's really really difficult to achieve the rate of growth as before. And that those who point to Japan, and say we will not make those mistakes are actually doing Japan a huge disservice, and are consumed by their own hubris and arrogance (US and UK that is).

So disaster has been averted, the japanese averted disaster also. Yet the japanese are criticized for what they did wrong and they'll be lining bernanke and king up for nobel prizes soon enough. Unless we turn japanese.

It was always mooted Japan was in a sort of depression throughout the 1990's. Yet (and especially for their population and land mass) they were always the 2nd richest nation in the world.

I think comparing Japan and UK isn't comparing apples with apples. Don't know really?

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i understand the apples to oranges comparison between the UK and Japan or the US and japan, but i think there are some similarities.

Enslaved by a ZIRP policy for an extented period. check. Forced in the future to run large budget deficits and high public sector debt [80%+ of gdp] for several years. check.

Oh i forgot, we've embarked on queasing quicker and more aggressively. And we [or the US atleast] are committing 10% of gdp to building bridges to nowhere rather than 5% of gdp. Well I'm convinced. :blink:

Anyone know anything about the relative comparisons re zombie banks. Japan never addressed the fundamental problems with it's banks, but the major banks have repaid tarp and well no longer at risk of zombification ? what gives ? perhaps that's where the apples to oranges comparison probably kicks in.

Edited by spivtastic

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Guest Parry
i understand the apples to oranges comparison between the UK and Japan or the US and japan, but i think there are some similarities.

Enslaved by a ZIRP policy for an extented period. check. Forced in the future to run large budget deficits and high public sector debt [80%+ of gdp] for several years. check.

Oh i forgot, we've embarked on queasing quicker and more aggressively. And we [or the US atleast] are committing 10% of gdp to building bridges to nowhere rather than 5% of gdp. Well I'm convinced. :blink:

Anyone know anything about the relative comparisons re zombie banks. Japan never addressed the fundamental problems with it's banks, but the major banks have repaid tarp and well no longer at risk of zombification ? what gives ? perhaps that's where the apples to oranges comparison probably kicks in.

I remeber one chap, might have been Noel or ?..! or EDM or someone, who mentioned Japan exported all it's inflation from money printing, Yen Carry trade?

Don't know?

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