Japan`s "Lost Decade"

The Nikkei never rebounded from the 38,916 peak set on December 29, 1989. I am starting to feel that the Dow Jones Industrial Average of just over 14000 in 2007 and the TSX of 14000 in 2008 marked the peak in the similar fashion. I am wondering if Japan`s prolonged deflation is a harbinger of what will happen to the North American markets. I wonder if Robert Prechter`s Elliott Wave Theory of continued deflation will bring the Dow Jones Industrial Average to retest the March 2009 lows and go further down.

I really don't think it is a viable comparison - the bubble destroyed Japan, and while what we have now is fairly serious, its not nearly as destructive as what happened in Japan.

Plus i hate using things like the Dow Jones as measures of economic health, but from a high of 14,000 we saw a drop to 6600, but we're already back to 10600 today. Give it a few years we'll be back above 12,000 and slowly moving past 14,000 by 2015.

Ewok85 said:

I really don't think it is a viable comparison - the bubble destroyed Japan, and while what we have now is fairly serious, its not nearly as destructive as what happened in Japan.
Plus i hate using things like the Dow Jones as measures of economic health, but from a high of 14,000 we saw a drop to 6600, but we're already back to 10600 today. Give it a few years we'll be back above 12,000 and slowly moving past 14,000 by 2015.

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You know, while I am a bit skeptical that the rally is genuine, but the Plunge Protection Team, along with Helicopter Ben will probably engage in enough quantatative easing measures to at least bring the Dow to 14000 by 2015. Some theorists such as Marc Faber and Peter Schiff disagree with deflationist Robert Precter because deflationary markets of the former part of the 20th century held the dollar to a gold standard. And because we are now on the fiat system due to Nixon and the Bretton Woods System, we probably will inflate our way out of debt while debasing the US dollar. Canada needing to keep the dollar down to trade with the USA will have to bring down the dollar by printing it especially when commodity prices will skyrocket as a result of a devalued dollar.
In all this, I think the Japanese people will be best off just sitting on their hands holding their money in their own currency as the Yen is a better flight to safety than US Treasuries.

Japan merely gave improvement to an existing model, and followed it until buble.
Today's China carries out it old model
it is easy....
that model alredy did not match Japan.


anyway
The new model doesn't exist anywhere in the the world.
Moreover, it has not been experienced.
I think Japan still looking for New model of Future..

caster51 said:

I think Japan still looking for New model of Future..

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Step 1 - stabilise the population
(Step 2 - feed the population - it would be great if Japan implemented modern "urban farming" ideas)

Ewok85 said:

I really don't think it is a viable comparison - the bubble destroyed Japan, and while what we have now is fairly serious, its not nearly as destructive as what happened in Japan.
Plus i hate using things like the Dow Jones as measures of economic health, but from a high of 14,000 we saw a drop to 6600, but we're already back to 10600 today. Give it a few years we'll be back above 12,000 and slowly moving past 14,000 by 2015.

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Destroyed Japan? I don't know what you are talking about. Japan, deflation and al, is 1000 times better off than the US. America is only around the way it is cos of massive spending which will soon come to an end. What you are seeing is not merely a "cycle" but a sign of permanent things to come.

hsakakibara1 said:

Destroyed Japan? I don't know what you are talking about. Japan, deflation and al, is 1000 times better off than the US. America is only around the way it is cos of massive spending which will soon come to an end. What you are seeing is not merely a "cycle" but a sign of permanent things to come.

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You come back to me in another 10 years and we'll see how things are going.

Ewok85 said:

You come back to me in another 10 years and we'll see how things are going.

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We won't need 10 years. I have a feeling just 5 will do it. I really do hope we are both wrong, though, and that both countries can do well. But as crappy as Japan may be, the US is crappier and is going down big time (unless they can start another war against make-believe WMD like they did in Iraq).

hsakakibara1 said:

But as crappy as Japan may be, the US is crappier and is going down big time (unless they can start another war against make-believe WMD like they did in Iraq).

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From what I have been reading, the next hot spots seem to be Somalia and Yemen for the next war.