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February 05, 2009

A Japan-style L-shaped near depression?

Dennis Sevakis
Readers may want to pay some attention to this fellow: He's one of the few who saw this financial/economic mess/crisis coming. Nouriel Roubini writes in Forbes of the danger the US is in of a decade or more of stagnation or worse. A sample:

The sad case of Japan's free fall is a cautionary tale of what happens when a high-flying economy has a real estate and equity bubble that goes bust, avoiding (for too long) doing the painful structural reforms and clean-up of the financial system that is necessary to avoid a lengthy, L-shaped near-depression. Japan had over a decade of stagnation and deflation, then a mild, sub-par growth recovery that lasted only three years, and is now spinning into another severe stag-deflation.

Posted at 01:02 PM | Email | | | Share Share
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