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Watch out Japanese economy – it tells you what US economy and the rest of the world will face in the next twenty years
No one understood the trend setting economy of modern day. The Japanese economy is ahead of the rest of the world by twenty years. Since 1988, the Japanese economy has faced deflation driven recession due to excessive debt load. Now it faces recession and inflation at the same time. There is no textbook that can describe in economic 101 term what happened to Japan – the vibrant exporting economy with massive trade surplus and positive balance of payments of eighties.
Analytic models say that the Japanese economy is ahead of the US economy and the rest of the developed economies by twenty years. Today Japan faces inflation and recession. Household spending declined 3.2 percent, the most since September 2006, the statistics bureau said. Core consumer prices, which exclude fruit, fish and vegetables, climbed 1.5 percent from a year earlier after rising 0.9 percent in April.
US economy is at the peak just like Japan in 1988. For the next twenty years US economy will face deflation in wages and stand of living while commodity prices will skyrocket. This will lead worst economic nightmare for the US consumers and households. The prices will rise because of global demand but wages and standards of living will fall sharply. The severity will be ten times that of Japan in the last twenty years because of trade and budget deficit of US.
US consumers are blowing up their credit card limits. They are at the edge of hitting the magic limit where you have no choice but to curtail spending.
US will lead the world economies into depression. By 2012 December, world will be reeling in financial meltdowns and deep depression. Worst hit will India and China.
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