Learning From Japan's Deflation Trap

Learning From Japan's Deflation Trap
Alex Filonov submits:

Maybe we are all looking at the wrong things? Maybe we are not in the Great Depression 2.0, but in something new?

Let's take a look at Japan. The usual explanation of the current Japanese nightmare (21 years of depression and deflation and counting) is that the real estate and stock markets were grossly overpriced in 1989 and then there was no next idiot to buy either. But usually depressions of this kind end in 6-10 years. The explanation for this 20 year-long depression is that the Japanese, instead of fixing the problem, tried to hold a brave face and sweep problems under the carpet. This is partially true, there are still companies with lifetime employment, banks which should have been closed and companies which should've gone bankrupt long time ago.

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