Bankruptcy

Interesting Comparison Between Japan and the US

By mcbride

In a recent article entitled: ?Actually it Looks like we are Japan? the author notes the similarities in our respective economies.  The article which also has a series of 8 charts which tell the story best, the author notes: ?But there’s another area in which the two countries are very similar, one that could be the most important of all: At least for now, we’re both in the midst of a deflationary deleveraging, in which money supply growth is miniscule and bank credit continues to contract.

Paul Kasriel of Northern Trust has put together a series of charts that show this comparison, and it’s not encouraging.  Despite the Fed offering unlimited free credit to the banking system, banks continue to shrink the amount they’re lending (except to the Federal government).  Thus, this free money is not making its way into the economy, the money supply is barely growing, and credit continues to shrink (for the first time in 60 years).?

And ?[In the US], Bank credit is shrinking for the first time in 60 years, and the decline is far worse than in the 1950s.?

Read more: http://www.businessinsider.com/actually-it-looks-like-we-are-japan-2010-6#ixzz0zc3qQ4L8

Michael

Full post as published by Texas Lawyer Blog on September 15, 2010 (boomark / email).