Japan's Deflation Never Ended

Those who wish to see their future as it pertains to the inflation or deflation debate, regardless of where they live, should look to Japan. That's not a statement of time or economic outcome but of the fact that Japan's deflation never ended after significant government attempts to the contrary. Many of the policies being instituted around the globe today are similar to those tried in Japan. But, as it pertains to the U.S., they are being instituted at a feverish pace. As an example, the Federal Reserve pounded down interest rates and took less than a year from the stock market making all time highs until it flooded the banking system with money. It took Japan about twelve years to do so. Now the Japanese stock market is hitting nearly three decade lows.

For those who really understand deflation, and it has now become apparent that not a single mainstream economist fits that bill, Japan was a warning to the U.S. of its own imminent deflation as was oil at $10 a barrel and gold at $250 an ounce in the late 1990s. And, contrary to popular belief, debt is not the driver either. Japan has always had one of the highest savings rates in the world. That included during the onset of deflation. This deer-in-the-headlights state of denial is a main reason why the elitist incompetents who created this environment never saw it coming and will severely underestimate its consequences.