Is America the next Japan? (Is America doomed to suffer the same fate as Japan's Lost Decade?)

MSN Money ^ | 08/27/2010 | Anthony Mirhaydari

[SeekAndFind]

Despite the feverish efforts of policymakers, including a new round of money printing by the Federal Reserve, the U.S. economy continues to dance on the edge of oblivion. Job growth has stalled. The stock market sits just a couple of percentage points above where it was a year ago. Fed up and fearful, investors are throwing their cash at the seemingly safest asset class of them all -- Treasury bonds -- and pushing long-term interest rates to historical lows.

Now, some are wondering whether America is destined to repeat Japan's 20-year battle with deflation, or falling prices, a bear market for stocks and housing, and relentless recessionary pressure.

According to Merrill Lynch strategist Michael Hartnett, this "Japanification" of our economy would be dismal: Interest rates would remain near 0% through 2020; the economy would grow at an average annual rate of just 1% over the next 20 years; the Dow Jones industrials ($INDU) would drop below 4,000; and home prices would fall an additional 46% by 2030.

Even after all we've been through over the past three years -- 7.3 million lost jobs, government bailouts, foreclosures and stock market losses -- this may be a bit too hard to believe. Yet many investors are already preparing for this dark future.

[old3030]

No, because I’m guessing that Japan ran a trade surplus throughout their ‘lost decade’.

Our situation is much worse.

[E. Pluribus Unum]

Naw.

The welfare class, people who have spent their entire lives collecting "entitlements" for making babies and merely existing, will roam the countryside burning everything to the ground.

For a little while.

Until the rest of us start fighting back.

[indthkr]

We’re already in it by at least 4 years.

[central_va]

Is America the next Japan? (Is America doomed to suffer the same fate as Japan's Lost Decade?)

Well maybe for half the country. See my tagline....

[vanilla swirl]

“Until the rest of us start fighting back. “

That would be a matter of seconds...........

[cgbg]

The Japanese are hard-working, thrifty and smart—and their government’s determination to bail out their banks brought them a lost decade.

A lost decade is the best we can hope for given the entitlement mentality of half of the American population—unless we shut down those “too big to fail” banks and investment banks and start hacking away at local, state and federal taxes and spending.

[Frantzie]

They control TV ALL of it. A lot of it is Saudi and Middle East money and business deals.

Fox is only slightly better but they have 10% Saudi investment. ABC News/Disney sends undercover reporters to try to provoke trouble with people against The Victory Mosque. All the other networks are just as evil.

[Pollster1]

Japan has, throughout their entire history, had better leadership than we are stuck with today. We would be lucky to do as well as they did.

[Erik Latranyi]

I am more concerned about an October collapse of our economy.

[SeekAndFind]

Japan has, throughout their entire history, had better leadership than we are stuck with today

Japan has been changing Prime Ministers at least once every two to three years for the past 20 years. By my count, they've had close to 15 Prime Ministers since 1989 ( The previous one lasted just 9 months ).

[familyop]

"The welfare class, people who have spent their entire lives collecting "entitlements" for making babies and merely existing, will roam the countryside burning everything to the ground."

They don't have the resources or the will to leave their slums. They're accustomed to being livestock for continuing bipartisan, politically correct government programs (see feminism, romanticism, federal funding to local governments, family busting for enlarging the labor pool). But employees of government and government-supported businesses might riot and rob after the defaults.

They'll be about as annoying as flies to happy, hard working, unlicensed, unauthorized, "unsocialized" low techs.