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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: GST who wrote (49899)1/16/2006 5:00:17 PM
From: jimmg  Read Replies (2) of 110194
 
What you fail to grasp is that Japan fell into deflation BECAUSE they have a high savings rate and are a major creditor nation.

It's likely that the U.S. will increase it's savings rate in the future from zero today. I would argue that it's the rate of change in the savings rate that is more relevant to deflationary/inflationary pressure than the constant rate. In other words a change in the savings rate from from zero to 10% over a given time period is more deflationary than a constant 20%.
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