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STRATFOR.com
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THE INTERNET SOURCE FOR GLOBAL INTELLIGENCE
If it’s in the news, it’s too late...
Japanese Economy in Terminal Decline
October, 01 2001
Summary
The Sept. 11 attacks on the World Trade Center and Pentagon did more than just gut American confidence. They also heralded the downfall of the world's second-largest economy, Japan. About the only option left for the Japanese prime minister is to restart massive deficit spending.
Analysis
New statistics from Japan show that consumer prices dropped 1.2 percent in August, the 24th-straight month of decline. The data indicate Japan's deflationary spiral is intensifying. But Tokyo's problems are far more severe than economically crippling deflation.
About the only option left for Japanese Prime Minister Junichiro Koizumi to stop the economic degradation is to restart massive deficit spending, even though it may appear self-destructive, as soon as possible. Japan's economy has been extremely weak for more than a decade. But due to the Sept. 11 terrorist attacks in the United States, the country is now locked into an irreversible and terminal decline.
(The Rest of the Story)
(c) 2001 Stratfor, Inc.
Dan
Japanese Economy in Terminal Decline . . .