Here are some key points in regards to Japan & deflation since for just about everything posted on the economics thread - there is only one answer from you "Japan":
*JPN experience of deflation had 5 causes: financial shocks, demographics, policy response, disinflation from China, deanchoring of inflation expectations.
*The real effective YEN exchange rate rose 65% between early 1990 and mid 1995.
*From its peak in 1995 JPN's working age population has fallen 10% or 0.5% per year.
* On the policy front JPN monetary conditions were tight for a long time with Taylor rule suggesting so from 1998 to 2012.
* JPNese banks did not disclose any NPL before 1993 and started to provide consistent data only in 1998.
* The peak in NPL ratio in JPN was in 2001 at 9% and only in 2002 with Takenaka regulators became vocal on bank recapitalization.
* In 1996 consensus forecasts for year ahead JPNese inflation began to fall and by 1998 that became negative.
* One important difference between JPN and Euro banks during the crisis is that JPN banks held 40% of the equity market when the bubble popped.
* JPN peak in working age population took place in 1995. Germany in 1998. Italy in 2010. In France it will peak in 2077.
* It took less than 6 years in Europe to have consistent negative loan growth since its peak in 2007. In JPN it took over 9 years.
* Fiscal austerity in Europe since 2011 has probably reduced GDP by 4 percentage points. JPN since 1993 had run a cyclically adjusted deficit of 6%pa.
* Govt bond holdings as a % of JPNese bank assets moved from 5% in 1998 to 25% in 2011. Loans fell from 60% of assets in 1990 to 40% today.
* Holdings of government bonds at Eurozone banks today are 6% of assets versus 4% in 2008 and a peak of 8% in 1999.
* Holdings of govt bonds for Spanish banks at 9% of assets today are 3x the lowest allocation but still below the peak at 12% in the late 90s.
* Excluding Germany, Eurozone non financial debt to GDP "stabilized" at 277% from 175% ten years ago.
* Non financial debt in Germany as a % of GDP has been stable between 190% and 210% for the last 15 years.
Keep posting more about the 'Japanification' of Europe because that is the mass media consensus, but don't present it as 'the contrarian view'. It simply isn't.
