Low nominal rates of interest
Want to "rescue" firms that have all become too big or too important to fail
Likely to have an interventionist government
Stock market over the last 10 years is flat/lost money in NOMINAL terms (In real terms i.e. when you take the time value of money or the interest rate into account, it has lost a lot of money)
These are some of the concerns I have. I need to think about this more deeply and figure out what the right things to look at are. I do think we have better corporate governance than Japan does,are quite risk taking as a country and our culture are quite different. However, the possibility of a long and gradual road to recovery cannot be ruled out.
If any of the visitors or readers has any comments/views/suggestions on whether we are in danger of becoming Japan and what are the key metrics to examine, please post some comments.
thanks
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Some of the things that might be different
1. American Banks are taking losses on their balance sheets. Japanese banks did not do that.
2. Extensive layoffs in affected sectors. Did japan hove these? I do not know about this.
3. America's saving rate is really low.
4. How badly were/are consumers leveraged in the japan?
5. A very big component of japanese economy is exports. The world continued to import from japan. Do we have a sector that will continue to grow ?
6. The dollar and yen are special currencies in their own sense. The role of yen in japanese case vs role of dollar in the coming years.
Good comments Vivek. I will think about these
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