First, you’ve succinctly answered my questions about Japan’s deflationary era - thank you!
Second, this is a truly brilliant analysis! I’ll bet not one person in ten million could piece together and comprehend the intricate, convoluted interactions of all these factors - money velocity, liquidity traps etc. - as you have. This should be published in an important economic journal.
Third, you’ve shown how our economic near-future depends, in large part, on hard-to-quantify cultural aspects. Will the American culture of 2023 respond in the same way to savings and spending decisions as the culture of Japan in the 1990s? Not likely, but because it’s hard to quantify, the Fed and government agencies are more likely to guess wrong and compound their mistakes. The Fed seems to already be walking a real tightrope; now it seems alarmingly certain that they will fall. I think we are in trouble.
Wow. Three comments, Mr. Kust:
First, you’ve succinctly answered my questions about Japan’s deflationary era - thank you!
Second, this is a truly brilliant analysis! I’ll bet not one person in ten million could piece together and comprehend the intricate, convoluted interactions of all these factors - money velocity, liquidity traps etc. - as you have. This should be published in an important economic journal.
Third, you’ve shown how our economic near-future depends, in large part, on hard-to-quantify cultural aspects. Will the American culture of 2023 respond in the same way to savings and spending decisions as the culture of Japan in the 1990s? Not likely, but because it’s hard to quantify, the Fed and government agencies are more likely to guess wrong and compound their mistakes. The Fed seems to already be walking a real tightrope; now it seems alarmingly certain that they will fall. I think we are in trouble.