Richard Koo has previously warned about America experiencing the Japanese scenario. He’s outlined how what the United States is experiencing is no different than Japan’s lost decade.
It is all about companies paying down debt, rather than spending. Even though they are getting this cash for free from the government, they are choosing to deleverage rather than spend. Individuals are making similar decisions and it is forcing the macro economy to remain very slow moving.
This video of Koo explaining this reality is vital viewing for anyone trying to come to grips with our deflationary reality.
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