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America Replicating Japan

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America Replicating Japan - by Stephen Lendman

An except from Franck Biancheri's new book titled, "World Crisis: The Path to the World Afterwards" states:

"The (current) financial and economic crisis....marks the end of the world order established after 1945." In 1991, the Soviet Union dissolved, and since fall 2007, we've  "witness(ed) the accelerated decomposition of the 'Western pillar' with" America advancing disintegration.

After decades "spent living in the myth of an 'ended history' in which" Western ideology was triumphant, "it is almost impossible to imagine 'a world after' " without Washington/Wall Street dominance, "where 'Anglo-American' would not necessarily mean 'modern,' and where the dollar would no longer be king."

Neither our media or leaders "imagine the unimaginable." They're "too busy trying to make us 'forget the unforgettable,' in particular, the socio-economic consequences of the crisis throughout the world." It creates problems and "unprecedented opportunit(ies) to rebuild a 'world after,' provided" challenges can be seized and dangers avoided. One thing's certain. New world ways will supersede one olds, for better or worse. Buckle up. Things may get bumpy along the way.

Real Analysis, What Wall Street Pundits Eschew

Nearly daily from Canada, economist David Rosenberg provides some of the best. He offers far different commentaries than corporate-sponsored deception, extolling a recovering economy, claiming clear sailing ahead, and hiding how Western workers are harmed.

A recent Rosenberg chart analysis compared America's economic decline/malaise to Japan's since the late 1980s. He began quoting St. Louis Federal Reserve Bank President James Bullard last July saying:

"The US is closer to a Japanese-style outcome today than at any time in recent history." Perhaps ever, in fact, given the level of past excesses, creating a monstrous debt overhang.

Rosenberg's visual analysis showed a frightening post-bubble decline in both countries by the numbers:

(1) Since the mid-1990s, Japan's private residential spending plummeted by nearly 60%. America, since 2006, matched it in much less time, and the trend remains down.

(2) Since 1988 in Japan, housing credit crashed from over 20% annually to around 3%. US home mortgage liabilities peaked around 2003, moved sideways until 2007, then plummeted from around 13% annually to negative numbers because of mounting foreclosures.

(3) Japanese short term interest rates fell from 8.5% (in 1990) to near zero in 1995 and remained there. US short rates fell from around 5% (in 2007) to near zero where they're likely to remain indefinitely.

(4) Over the past decade, the Bank of Japan (its central bank) expanded credit exponentially, its level remaining at unprecedented levels. In 2008, the Fed acted likewise, expanding its balance sheet recklessly to help banks, not Main Street it ignores.

(5) Fiscal policies in both countries created unprecedented, dangerous, deficits. For over two decades, Japan had no surpluses. America's last one was in 2001. It's been all red ink thereafter, especially since 2008.

(6) In 1991, Japan began a protracted deleveraging cycle as reflected in its 10 year government note yield and benchmark Nikkei Index. It peaked on the last trading day of 1989 at nearly 39,000. Currently, it's at around 10,500 with minimally many more years, maybe decades, needed to recover fully.

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I was born in 1934, am a retired, progressive small businessman concerned about all the major national and world issues, committed to speak out and write about them.
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This is a website to find economic statistics: htt... by Mike Preston on Saturday, Jan 15, 2011 at 7:59:32 PM