Japanese Muddle Through is too conventional though, Heinz
these are anything but conventional times
we have so many 3-sigma events out there now already
Japan has been a diversion of mine for a few years
while I am no expert, I do note many key contrasts
we in the USA have some critically dangerous differences that will prevent the muddle process to occur smoothly as it did in Japan
this might be the topic of my next work
the differences between USA and Japan are frightening:
- our economy cannot tolerate a reduced currency, since imports would open the door to inflation, which would hit LT rates, which would hurt real estate, which would cause consumer spending to suffer badly, thus bigtime recession
(Japan is sustained from reduced currency, since an exporting nation)
- our economy is undergoing an acceleration in bankruptcy filings, both corporate and personal, which is undermining money velocity, and job security, thus inhibiting the regular response from lower rates as lenders are more reluctant
(Japan blocks bankruptcy at every corner, spreading death from vampirism through the conglomerates)
- our nation is comprised of GoGo morons who spend spend spend and live for today, borrowing heavily for all of their entitlements, breeding millions of consumers who dont know what saving means, let alone becoming aware of its vast benefits, believing the govt (or their parental inheritance) will bail them out... and the entire US Economy is based upon this debt system, exacerbated by lack of underpinned savings
(Japanese citizens are the most prolific savers on the planet, and can force fund their survival)
- we are a confrontational pre-emptive arrogant meddling nation internationally, sometimes inviting harsh criticism and backlash response, which can with some precedent transfer over into the commercial world in the form of embargoes, trade wars, and boycotts
(Japanese are notoriously meek, with no military high-profile presence, and 1000's of Toyota pickup trucks in the Islamic world)
so currency, bankruptcy, saving, personal differences are critical
I dont believe our poor comparison will allow for Muddling much longer
Japan has muddled for over a decade, and may be succumbing to the K-Winter forces of liquidation, which will likely lead them to repatriate foreign investments at a quicker pace than broadly anticipated (i.e. US TBonds)
I doubt the USA will muddle at all
instead, I buy into the expectations laid out by Doug Noland (Prudent Bear)
he believes we are careening perilously toward the Argentina outcome, with numerous shocks and sudden disruptions emerging from currency and banking distress
/ jim |
