The Great Debate UK

from The Great Debate:

Japan: The mother of all miserable recoveries

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jamessaft1(James Saft is a Reuters columnist. The opinions expressed are his own)

Investors met the news that Japan's economy has emerged from a bone-breaking recession calmly and rationally: they sold shares quickly and in large amounts and made bets that consumer prices are going to be falling for years to come.

That's because Japan's recovery, coming as it does after a global bubble in the production of what I call, for lack of a more technical term, "stuff," is really not sustainable.

The fact that the consumer portion of the recovery is only a reflection of income transfers from government to individuals isn't very encouraging either.

More importantly, given that hopes for Japan were low anyway, the vulnerability of its recovery point to some important challenges the nascent rebounds in the U.S. and Europe now face.

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