Bothered about a Japanese-style lost decade? Don't be, says the Goldman Sachs January 2011 Outlook, contribution five causes we aren't damned to ten years of weak expansion and depression:
1. Our Bubble was smaller: "Real estate values in Japan pointy at 17 time’s disposable profits in 1990, having valued by 182% over the previous five years. In the US, real estate values peaked at 8.5 times not reusable income in 2005, and had valued by 77% over the prior five years.Therefore, one can say that Japanese real estate was 100% more overestimated than US real estate, and a greater improvement was necessary."
2. Our reaction Was Swifter: "The Federal Reserve slash the Federal Funds rate to1% in 14 months from peak interest rates and to 0% within 2 months following that. The Bank of Japan took 46 months to cut to 1% and then an additional 77 months after that to cut rates to 0%. With admiration to quantitative reduction it took the US real estate one year from its climax in interest rates to raise its money provides to 14% of GDP; it took Japan nine years."
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