Is Europe the Next Japan ? (from Goldman)

Well, this question is far from new. Actually it was raised soon after the first tention in EZ sovereign bond market in 2010. As already mentioned on this blog, the theme of a balance sheet recession is rooted deep down the EZ economy. Unfortunatelly, the public and governments don’t seem to properly grasp the issu. But some people do, especially in Japan… 

From latest « Top of Mind » publication by Goldman Sachs… Bold statements underlined by us:

« We asked 3 experts whether the Euro Area is set to repeat Japan’s prolonged period of stagnation and deflation: former BOJ Governor Masaaki Shirakawa (unclear, but Euro area recovery requires addressing the underlying problem of economic integration, not its symptom, deflation), GS Chief European Economist Huw Pill (low growth and even some deflation similar to Japan, in terms of outcome if not in terms of causes, are likely in the short term, but – also akin to Japan – a deflationary spiral is not), and LSE Professor Paul De Grauwe (there is a real risk of this outcome or worse unless policies change). »

Well, that makes 2 to 3 in favour of bad news for a foreseeable future… Ooops

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