Great correction: You thought it was over?
What鈥檚 new in civilization? We went to Cafayate last night. Our old friend Doug Casey hosted an intimate little dinner 鈥� for about 150 people. He鈥檚 developing a community down there 鈥� the kind of place he wants to live in鈥urrounded by friends, good food, bright sun, beautiful views鈥nd everything else a man might want.
Whether this is a good idea or not, we can鈥檛 say. But it is fun to get together with Doug and his crowd.
Since we were back in Internet range, we checked in with our usual sources. Here鈥檚 what we found:
The economy is either growing slowly, or contracting.
Housing is probably going down. Remember, Mr. Market has to destroy the idea that 鈥渉ousing always goes up.鈥� When he鈥檚 finished people will think that 鈥渉ousing never goes up.鈥�
Unemployment? People are gradually beginning to realize that the last ten years were the worst for creating new jobs in America鈥檚 history. If they keep thinking about it they will realize that it is not just the bust that is destroying jobs; there was something very wrong with the boom too.
Meanwhile, the markets are still calculating, figuring, deciding what things are worth. In the last couple of days, they鈥檝e been thinking that maybe stocks and gold got a little too uppity. Gold has lost more than $50 in the last two days. Stocks lost ground on Tuesday, but bounced up 36 points yesterday.
From all we can tell, the Great Correction continues. And here鈥檚 a report from The New York Times that tells us where it leads:
OSAKA, Japan 鈥� Like many members of Japan鈥檚 middle class, Masato Y. enjoyed a level of affluence two decades ago that was the envy of the world. Masato, a small-business owner, bought a $500,000 condominium, vacationed in Hawaii and drove a late-model Mercedes.
But his living standards slowly crumbled along with Japan鈥檚 overall economy. First, he was forced to reduce trips abroad and then eliminate them. Then he traded the Mercedes for a cheaper domestic model. Last year, he sold his condo 鈥� for a third of what he paid for it, and for less than what he still owed on the mortgage he took out 17 years ago.
鈥淛apan used to be so flashy and upbeat, but now everyone must live in a dark and subdued way,鈥� said Masato, 49, who asked that his full name not be used because he still cannot repay the $110,000 that he owes on the mortgage.
鈥or nearly a generation now, [Japan] has been trapped in low growth and a corrosive downward spiral of prices, known as deflation, in the process shriveling from an economic Godzilla to little more than an afterthought in the global economy.
鈥淭he US, the UK, Spain, Ireland, they all are going through what Japan went through a decade or so ago,鈥� said Richard Koo, chief economist at Nomura Securities who recently wrote a book about Japan鈥檚 lessons for the world. 鈥淢illions of individuals and companies see their balance sheets going underwater, so they are using their cash to pay down debt instead of borrowing and spending.鈥�
------------------------------
海角大神 has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on the link above.
