The U.S. Is Suffering a Japanese-Style Depression

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  1. Neubarth
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    Neubarth At the Ballpark July 30th

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    The U.S. Is Suffering a Japanese-Style Depression

    Presciently bearish David Rosenberg, the chief economist and strategist at Gluskin Sheff who called the global meltdown back when he was still at Merrill Lynch, isn't budging from his view that the U.S. is in a depression -- and a prolonged, Japanese-style one at that.

    Rosenberg reminded clients on Wednesday that here we are 33 months after the Great Recession began, and yet home prices, gross domestic product, credit outstanding, organic personal income and employment are all lower now than they were prior to the onset of the downturn.

    "We can understand that this ...is a Japanese-style (even worse perhaps) modern-day depression," Rosenberg writes. "It's not the 1930s because soup lines have been replaced with unemployment insurance lines -- over 10 million checks and for up to 99 weeks. The poor souls who endured the bitter 1930s had no such relief."

    David Rosenberg: The U.S. Is Suffering a Japanese-Style Depression - DailyFinance
     
  2. KissMy
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    It is very similar to a Japan type. There is little chance that a recovery will happen until after 2012. Post Sub-Prime, the next wave of of foreclosure is here & it is fueled by Option-ARMs. That wave will be followed by Alt-As 1 year later.

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  3. loosecannon
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    loosecannon Senior Member

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    Rosenberg reminded clients on Wednesday that here we are 33 months after the Great Recession began, and yet home prices, gross domestic product, credit outstanding, organic personal income and employment are all lower now than they were prior to the onset of the downturn.

    ordinarily this would be a slam dunk case for deflation.

    But if the CPI doesn't go negative nobody will admit it.

    But that's what is similar between our condition and that of Japan, we are entering a deflationary trap like the one Japan has been stuck in since they unpegged the yen from the $ in the later 80's.

    And so far nobody has figured out to break a deflationary trap.

    One of the new PM candidates in Japan has some good ideas that may work.
     

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