CHART OF THE DAY: LOOKING VERY JAPANESE
29 June 2010 by Cullen Roche
4 Comments
As deflation chatter gathers steam and worries over a double dip increase I thought it might be interesting to take a look at our “Japanese Syndrome”:
Source: dshort.com
Inclusion of 1929-49 chart is surreal… Next leg down may take out the Mar 09 low. Japan’s policy from 1989 mirror US policy.
It’s not different this time and we learn history so as not repeat it.
Just finished up a meeting Rob Arnott was speaking at. He said expect double dip within the next 12-18 months. At this time, expect deflation fears to reach a crescendo. At this time, bring out the inflationary toolbox. Seems to think there will be a generational buying opportunity in high yield bonds, tips, emerging markets stocks, and emerging markets debt. He wasn’t big on gold. Said it is over priced relative to oil, but he does see value in it as an insurance policy. He said if you are buying gold for a portfolio position, go in expecting to lose money.
Those charts look unforgiving. Such will be our fate too unless the debtors are “forgiven” for being driven into debt slavery. It would also help if the system could admit it was wrong instead of blaming the victims. But then the looting game would be up, no?
For judgment will be merciless to one who has shown no mercy; mercy triumphs over judgment. James 2:13
However a bailout of both debtors and savers can be justified from the standpoint of justice alone without even considering the extreme wisdom of mercy.
He has told you, O man, what is good;
And what does the LORD require of you
But to do justice,
to love kindness,
And to walk humbly with your God? Micah 6:8
Touché. I should have said “Such might be our fate too … “. I can’t predict the future since I don’t own it.