Saturday, Oct 17, 2009

UK Japan Comparison

Market Oracle: Japan a Deflation Death? - Nope Stagflation

Comparison between the UK and Japan.

Posted by stillthinking @ 10:52 PM (947 views)
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7 Comments

1. novice pete said...

Quite a convincing argument. However, was it not 'laissez faire' that lead to the financial sector being allowed to conjure up the subprime
fiasco etc.

Saturday, October 17, 2009 11:23PM Report Comment
 

2. Get Rid Of Government said...

Nope, Governments expansive monetary policies. If it wasn't for this and the Greenspan put, etc, then a free market would not have had the chance to engage in reckless lending.

Saturday, October 17, 2009 11:52PM Report Comment
 

3. paul said...

We will have all of the negatives from Japan's experience (i.e. a lost generation) with inflation.

Sunday, October 18, 2009 12:41AM Report Comment
 

4. japanese uncle said...

'their infamous zombie banks'. True, but are the US/UK banks with trillins of potential bad debt any different? I would say far worse.

Sunday, October 18, 2009 08:42AM Report Comment
 

5. stillthinking said...

The idea of debt in context, that time was called during the 70s because of a complete lack of faith in the government rather than the debt itself, although true, surely misses the point that there is a growing global desire to save, so our current debt issuances are supported by a matching desire to save, -but this desire to save was missing in the 70s-. As in the 70s ran into a savings desire problem, not just lack of confidence, not helped by high inflation. Japan at that time was still investing heavily and enjoying rapid expansion so there were no excess savings to deploy abroad, and the US was borrowing heavily for Vietnam. The world wasn't saving basically, so any country attempting to borrow externally was out of luck. I don't think that is true today, there are a lot of savings floating around and nowhere safe to put them.

Sunday, October 18, 2009 09:53AM Report Comment
 

6. The_age_of_stupidity said...

The Western banks have now avoided mark to mark accounting so they can appear to be solvent, however like what happened in Japan they will just be zombies. On the contary during the 70's the US began on the path from a creditor nation to a debtor nation and began seeking funds from up and coming nations such as Japan. Thats why they now hold so many Dollar demoninated T-Bills. The US never had this issue. The UK couldn't borrow in the 70's not because there was a lack of available funds, but because no one believed they would be able to pay them back.
There are always lots of places to put funds. Recently a lot of funds have been going into bonds, the next bubble and when this pops the UK will not be in a good position to keep attracting funds compared with other nations.

Sunday, October 18, 2009 10:43AM Report Comment
 

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