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Anyone watching treasuries?
- Thread starter MrDODGE
- Start date
Not that it means anything, but i agree with your take on this. Another factor that might have played a role in the case of Japan is that Japan is a nation of savers, whereas the US is a nation of spenders and borrowers. Deflation is not nearly so bad for savers as it is for borrowers.
Quote from scriabinop23:
I missed where he said it is a Japanese replay. I've heard him complain that the Japanese not being good at taking losses (and letting the system outright flush) is the path we are going down, but I've never heard him prognosticate our outcome will be the same. His 30y call is as you say a contrary outcome to the Japanese situation.
Regardless, Japan's problem is that they never printed *enough* money to go along with their fiscal stimulus. This is according to Milton Friedman himself. Side by side since 1990, the US has grown its money supply (on a percentage basis) more aggressively than Japan even despite Japan needing so much more stimulus.
Everyone likes to look sophisticated saying we are in for a Japan repeat without quantifying the correct *amplitude* (and scope) of money printing is just as essential as the existence of the money printing bias. That's where Japan likely got it wrong. If you put enough cash into the banking system, it *will* move. The problem is that 'enough' was never properly addressed.