tag:blogger.com,1999:blog-6616959642391988608.post4665740762210522027..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: Japan: What deflation? What depression?Scott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger16125tag:blogger.com,1999:blog-6616959642391988608.post-62143100001008563832010-08-15T13:15:13.134-07:002010-08-15T13:15:13.134-07:00Some points:
1. Many (particularly those shorting...Some points:<br /><br />1. Many (particularly those shorting Yen) chime away about 200% Govt debt-to-GDP which is disingenuous. This number is GROSS debt, whereas official NET debt is closer to 100% - still above US & Core Eurozone, but below the worst of the periphery. Moreover, net debt across Govt + private sector is yet further decidedly more moderate. In effect, the Japanese State has "Cassandra"https://www.blogger.com/profile/17412381249313151515noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-79037235929791035512010-08-15T13:14:48.269-07:002010-08-15T13:14:48.269-07:00Some points:
1. Many (particularly those shorting...Some points:<br /><br />1. Many (particularly those shorting Yen) chime away about 200% Govt debt-to-GDP which is disingenuous. This number is GROSS debt, whereas official NET debt is closer to 100% - still above US & Core Eurozone, but below the worst of the periphery. Moreover, net debt across Govt + private sector is yet further decidedly more moderate. In effect, the Japanese State has "Cassandra"https://www.blogger.com/profile/17412381249313151515noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-43577972834265716632010-08-13T17:23:31.881-07:002010-08-13T17:23:31.881-07:00Scott-
Japan's putput per hour has done fine....Scott-<br /><br />Japan's putput per hour has done fine. See http://www.bls.gov/news.release/prod4.nr0.htm<br />I agree with you on that.<br /><br />They have a great culture, terrific education system, they are a business-oriented country. All great.<br /><br />They should have done so much better than they have, and a 75 percent plummet in stocks and property values is a curse. <br /><br />Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-83731449239817230852010-08-13T11:57:48.442-07:002010-08-13T11:57:48.442-07:00I do not think Rick Santelli could say it any bett...I do not think Rick Santelli could say it any better!!!!<br /><br />http://bit.ly/9178Ot<br /><br />The Fed is trying to pump up a failed experiment in housing. Private banks will never loan out for 30yrs at 3-4% interest and trending lower.<br /><br />Yet they continue to facilitate the ponzi scheme.Public Libraryhttps://www.blogger.com/profile/00017383928897945054noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-59170921922462641752010-08-13T10:57:05.745-07:002010-08-13T10:57:05.745-07:00"Bank Profits a sign of economic sickness, no..."Bank Profits a sign of economic sickness, not health"<br /><br />http://www.debtdeflation.com/blogs/2010/08/11/bank-profits-a-sign-of-economic-sickness-not-health/Public Libraryhttps://www.blogger.com/profile/00017383928897945054noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-88482297356932164512010-08-13T10:38:29.557-07:002010-08-13T10:38:29.557-07:00Benjamin: I don't think you understand the imp...Benjamin: I don't think you understand the implications of the data on Japan's GDP. Output per worker has risen in Japan almost by the same amount it has in the U.S. Japan's "lost decade" is a myth, the result of misinterpreting the data.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-73571432149756060352010-08-13T10:37:28.622-07:002010-08-13T10:37:28.622-07:00We need to be careful concerning politicians and f...We need to be careful concerning politicians and federal economists tinkering our foundation into oblivion.<br /><br />Sound money will produce superior results over technocratic tinkering 100% of the time.<br /><br />Obviously we are here because of very unsound fiscal and monetary policy. I doubt there is anyone who will refute that.<br /><br />And here you are Benj asking for more of the same.Public Libraryhttps://www.blogger.com/profile/00017383928897945054noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-70319044330966471142010-08-13T09:11:12.495-07:002010-08-13T09:11:12.495-07:00It may be that Japan is an outstanding example tha...It may be that Japan is an outstanding example that a tight money policy, and a zero inflation target, don't work.<br />The ultimate reasons may have to do with wage stickiness, and depression of investor optimism.<br />Who would buy property in a deflationary environment? The reason to buy property is that the price may go up--and such optimism is strengthened if there is some mild inflationBenjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-83152383596604240842010-08-13T07:45:41.162-07:002010-08-13T07:45:41.162-07:00I suppose I should have made my points clearer in ...I suppose I should have made my points clearer in this post. For one, don't believe everything you see and hear, especially with regards to Japan and deflation and its supposedly "lost decade," because much of it is based on erroneous assumptions and facts. Two, Japan's real problem was its stock market, and a tiny bit of deflation is not a satisfying explanation for that. I Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-85512042252976357172010-08-13T04:24:15.169-07:002010-08-13T04:24:15.169-07:00Price stability -- Japan...?Price stability -- Japan...?McKibbinUSAhttps://www.blogger.com/profile/10545798495680527622noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-39467790344125540682010-08-12T19:14:19.622-07:002010-08-12T19:14:19.622-07:00Public-
I am all for responsible fiscal and moneta...Public-<br />I am all for responsible fiscal and monetary policies. <br />I am not for a fetish about stable prices and gold at the cost of real output. <br />The Fed is charting a very dangerous course in its targeting zero inflation--see the Japanese model (now curiously lionized by Scott Grannis, who I assume will come to his senses tomorrow). <br /><br />The other problem with deflation is Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-67047036645931748162010-08-12T17:45:46.642-07:002010-08-12T17:45:46.642-07:00The Japanese government's debt-gdp ratio is ab...The Japanese government's debt-gdp ratio is above 200% (the US is at about 80%) and their stock market has declined 75%. Luckily for them, they have a spendthrift people willing to buy Jap Govt bonds yielding 1%/yr on the ten year and so they've avoided becoming insolvent. Lets hope we're as lucky.Mr. Kowalskihttps://www.blogger.com/profile/07899577790533734474noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-54395903021026681842010-08-12T17:31:07.067-07:002010-08-12T17:31:07.067-07:00Pub,
There is no political constituency for a ...Pub,<br /><br />There is no political constituency for a 'four or five year slump'. <br /><br />The Fed will inflate.Johnhttps://www.blogger.com/profile/11652253509768573561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-77601393111209823752010-08-12T16:04:08.496-07:002010-08-12T16:04:08.496-07:00Benj,
The government and central bank have saddle...Benj,<br /><br />The government and central bank have saddled the country with debt and mis-allocated capital by propping up zombie corporations everywhere.<br /><br />If instead they were to normalize rates and allow the market to weed out the weak, there probably would have been a four/five year slump rather than 20.<br /><br />We are headed down the same path for the very same reasons, that isPublic Libraryhttps://www.blogger.com/profile/00017383928897945054noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-88318970427872624642010-08-12T16:00:07.358-07:002010-08-12T16:00:07.358-07:00I fail to see how a 75 percent decline in the stoc...I fail to see how a 75 percent decline in the stock market is to be admired or imitated (their property market too btw).<br />Verily, 17 years of price stability--the central bankers won.<br />And the stock market and the property market were killed. Massacred. Annihilated. <br />The Japanese economy grew at 0.8 percent a year in this wonderful period of price stability? This is what we want?<Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-75188887594305742442010-08-12T15:50:54.935-07:002010-08-12T15:50:54.935-07:00Spot on!
It all goes back to the asymmetry of ho...Spot on! <br /><br />It all goes back to the asymmetry of how modern economists and Fed members view inflation vs deflation.<br /><br />Even the mildest deflation sends the Fed into a money printing frenzy when in reality, deflation is the result of the collapse in fractional reserve money printing activity. <br /><br />So in essence, it is the counter balance to bad policy and a necessary Public Libraryhttps://www.blogger.com/profile/00017383928897945054noreply@blogger.com