March 26, 2009: at a CSIS private luncheon Richard Koo discusses his perspective on the “balance sheet recession” and lessons learned from Japan. Do not miss studying Koo’s presentation slides — remarkable (chilling) evidence of the correlation between Japan and what has happened so far in the USA.
I wrote a bit on his CSIS October 2008 presentation – also highly recommended.
The thumbnail at left is just one of 34 brilliantly done slides showing Japan’s unsuccessful experience with monetary expansion. In fact Koo argues convincingly that a balance sheet recession is the one and only time that big government spending is the essential tool need to arrest an adverse feedback loop of downward spiraling GDP (spending) caused by private sector deleveraging.
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