Monday, September 8, 2008

It is not contained: America is going Japanese

The Power of De

Paul Krugman, who has studied the impact of financial crises in the past, particularly in Japan, suggests that while the Fred/Fan bail-out was a necessary evil, it is taking American down a very Japanese path, straight into debt deflation. It is becoming clearer now that none of the Fed's actions are having any effect so the financial crisis is starting to get out of control, like Japan in 1990.

Posted by an bearin bui @ 11:38 AM (502 views)
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2 thoughts on “It is not contained: America is going Japanese

  • This is a very good article and worth a read.
    Don’t know about anyone else but I am certainly personally in a state of ‘deflation’ (” deflation: prices are going up at the checkout counter, but the prices of assets, which are what matter for balance sheets, are dropping fast.”)

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  • Excellent article – thanks Plato.

    Yes, I am also in a state of deflation – I would guess that most people are in this country, at this moment!

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