The big news over the weekend is that Japan has moved back into recession. The country is a cautionary tale of what can happen when complacent central bankers/planners ignore dangerous asset bubbles and then assume that they can fix everything with stimulus spending, ultra-low rates and wallpapering the country with newly printed money. With GDP over 7% under the level in 1997, a debt at over 250% of GDP, and huge entrenched budged deficits the situation there looks hopeless without a major default to try to rescue an economy that arrogant and incompetent politicians and central planners/bankers have driven to ruin.
Fortunately nothing like that could ever happen in the developed economies of the west. 🙂 (more…)
