Courtesy of Mish.
In response to Japan Near Stagnation Following 9 Months of Growth; Service Sector Prices Back in Deflation; Spotlight on Abenomics My friend “BC” writes …
With little or no bank lending growth, decelerating wage growth, and trend growth of real GDP per capita at 0% to negative implies the 3- and 5-year change rates of US M2+ will decelerate from 2-3% to 0-1% in the next 5-6 years as occurred during the early to late ’00s in Japan.
We’re not turning Japanese because we want to, and we have convinced ourselves that we won’t, even though the too-big-to-fail banks and Fed are responding in precisely the manner one would expect as we, in fact, turn increasingly Japanese.
The S&P 500 is ~200% overvalued in this context in a classic “Minsky Bubble”.
Japan M2
Japan M3
Japan GDP
Fed Balance Sheet vs. Stock Market
The above chart from reader Tim Wallace….
