Nostradoofus » argentina http://nostradoofus.com armchair futurology and stuff. Sat, 26 Jun 2010 05:51:00 +0000 http://wordpress.org/?v=2.8.4 en hourly 1 Argentina, not Japan http://nostradoofus.com/2007/12/04/argentina-not-japan/ http://nostradoofus.com/2007/12/04/argentina-not-japan/#comments Tue, 04 Dec 2007 13:55:00 +0000 wemitchell /2007/12/13/argentina-not-japan Pundits worry the mortgage collapse may push us into Japan-style deflation. That’s one possibility, but there is a more likely one.

Japan headed into its long deflationary spiral with a mostly balanced federal budget, high trade surplus, immense foreign reserves, immense personal savings, low unemployment, and high educational level. This buys an awful lot of flexibility.

The US teeters on a similar precipice, but with no net underneath: gigantic federal budget deficit, large trade deficit, high personal debt, high corporate debt, net debtor status, and uneven educational level.

The stage is thus set more for Argentina than Japan: banking crisis, hyperinflation, currency collapse. I’m not saying it will happen; only that it’s more likely than the Japan scenario.

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