The Japanese scenario haunts the U.S. economy.
The idea that all the government spending the U.S. has used to bring the country back from recession may not prevent the economy from crumbling under the weight of its own debts lives in markets today.
There have been signs that the U.S. may differ from Japan’s balance sheet recession. The Federal Reserve’s quick response, the size of that response, and the current growth experience suggests that the U.S. may avoid the worst of Japan’s balance sheet recession.
But a lot of the data explaining Japan’s experience matches up with U.S. economic data, and when you look at those charts side-by-side, its fearfully revealing.
Japan Commercial Land Values
Source: Japan government paper, “The Asset Price Bubble and Monetary Policy“
Japan Residential Land Values
Source: Japan government paper, “The Asset Price Bubble and Monetary Policy“
Japan Land Values
Source: Japan government paper, “The Asset Price Bubble and Monetary Policy“
U.S. Land Prices
Japan Asset Prices
Source: Japan government paper, “The Asset Price Bubble and Monetary Policy“
U.S. Asset Prices
Japan Interest Rates
Source: Japan government paper, “The Asset Price Bubble and Monetary Policy“
U.S. Interest Rates
Japan Money Supply
Source: Japan government paper, “The Asset Price Bubble and Monetary Policy“
U.S. Money Supply
Japan Loans Outstanding
Source: Japan government paper, “The Asset Price Bubble and Monetary Policy“
U.S. Loans Outstanding
Source: Japan government paper, “The Asset Price Bubble and Monetary Policy“
U.S. Bank Profits
Japan Bank Profits
Source: Japan government paper, “The Asset Price Bubble and Monetary Policy“
Japanese Markets vs. The World
Source: Japan government paper, “The Asset Price Bubble and Monetary Policy“
Japan Stock Values
Source: Japan government paper, “The Asset Price Bubble and Monetary Policy“
U.S. DJIA Values
Japan GDP
Source: Japan government paper, “The Asset Price Bubble and Monetary Policy“
U.S. GDP
Look familiar. California for Tokyo, perhaps?
Source: Japan government paper, “The Asset Price Bubble and Monetary Policy“
Don’t believe us? Check out Richard Koo’s presentation saying the U.S. is the next Japan.
See Richard Koo of Nomura’s presentation here >
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