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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (90965)	9/30/2007 7:32:36 PM
From: Elroy Jetson	Respond to of 306849

Exactly. Japan realized their loss of wealth over an extended period of time by playing Monetarist make-believe. The reality was the capital was lost when they made the bad investments - such as Shuwa Corp and their banks buying the Bonaventure Hotel in Los Angeles for $1.2 billion and later selling it for its true value of $116 million. Yes, as you point out, Japan lost additional capital later in bad lending - but this was a result of playing make-believe, not part of the original problem. As Joseph Schumpeter said, Policy does not allow a choice between depression or no depression, but between depression now or a worse depression later. Inflation pushed far enough would undoubtedly turn depression into the sham prosperity so familiar from European postwar (WW-I) experience, and would, in the end, lead to a collapse worse than the one it was called in to remedy. For recovery is sound only if it does come of itself. For any revival which is merely due to artificial stimulus leaves part of the work of depressions undone and adds, to an undigested remnant of maladjustment, new maladjustment of its own which has to be liquidated in turn, thus threatening business with another worse crisis ahead. .