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

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To: mishedlo who wrote (74973)	12/7/2006 12:21:02 PM
From: GST	Read Replies (2) of 110194

<I will offer one point and that point is the enormous consumer debt in the US vs Japan. That is a huge deflationary pressure in the backdrop of falling wages and outsourcing> Japan had a huge net personal savings position -- in the ten trillion dollar range -- and little if any consumer debt, yet they slipped into deflation. No country on earth has experienced more outsourcing than Japan which is now tied at the hip to China and to a lesser extent other countries in south east Asia. Time after time you completely miss the mark and then try to go to perpetuate this myth than the experience of Japan is similar to our own situation when it is the exact polar opposite of our situation. The US is very vulnerable to recession at this point, although even that is not a given. On the other hand, a Japan style deflation could not possibly be further from reality. Japan went into deflation while its consumers were sitting on their wallets with their pockets absolutely stuffed with trillions in cash and no consumer debt. Deal with reality -- not fantasy.

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