Many economists draw comparisons between the United States now and Japan in 1990.
For those who aren’t familiar with Japan’s recent economic history, this is not a good thing.
Japan’s stock market peaked in 1989 at about 40,000. It now trades around a quarter of that level, or 10,000. GDP, meanwhile, has barely grown at all.
Economists used to refer to Japan’s malaise as “a lost decade.” Now they’re saying “lost decades.”
Our guest Howard Davidowitz sees a similarly horrific future in store for the U.S. He calls America’s current path, rich in deficit spending and weak in currency a “road to nowhere.”
He also doesn’t buy the arguments of those who reassure us that Japan’s problems are “cultural” and “demographic”–and, therefore, that it’s different here. Japan’s problems are the same as our problems (artificially low interest rates and a bailout culture), Davidowitz says. The only difference is that we’re about 20 years earlier into the collapse.
If we are Japan, what is the outlook for the stock market (and your retirement savings)? Not good.
If the DOW behaves the way Japan’s NIKKEI has, the DOW will trade at about 4,000 in 2025.
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