by Craig Hemke
I saw a lot of links and discussion over the weekend on inflation vs deflation…at least here in the U.S. Since it’s on so many minds…and so important in the months ahead…I thought I should chime in.
Much of the concern is whether or not the U.S. is traveling down the road of Japan: lower and lower rates, monetizing everything, still no growth or inflation, and endless concerns about deflation.
OK, maybe. But I think this comparison leaves out a few, key differences:
1. DEMOGRAPHICS – Japan is an old and aging population with a birth rate well below “replacement” at just 1.2:1. By comparison, the U.S. is much younger, has a much higher fertility rate and the population is constantly growing through legal and illegal immigration.