"Even with the massive interventions, unemployment is near 10% and likely to increase, foreigners are cutting back on purchases of Treasury debt and the Federal Reserve's balance sheet remains bloated at an unprecedented $2 trillion. Can anyone realistically argue that a few small upticks in a handful of economic indicators are a sign that the recession is over?"

And he's toning it down. Real unemployment is likely to be 50% greater, if not worse. He believes we're about a year away from an historically unprecedented worldwide economic crash.

The unemployed were encouraged to undergo training or take up positions in rural areas where there are often labour shortages. A lot of farmland lies idle in Japan simply because there is nobody willing (or able) to farm it..strange but true. My understanding is unemployment benefits here are not as generous as Australia and hence people tend to be pretty motivated towards finding a job. Having said that, I have no doubt the government here has used all the usual tricks to massage the unemployment rate down.

As for the work ethic, yes the Japanese are hard workers but so are the South Koreans and the Chinese. It is a competitive part of the world up here! Keeps everyone on their toes.

Sure Greg - 'the sort of "depression" Japan has been in for last few decades' - Might have read better. As a comparative sort of thing that doesn't sound all that bad maybe? (Not compared to a real whatever type of "__flationary" depression.)

I don't live there of course, but from my reading (including your musings, Greg ) and talking to recent Japanese migrants, there is a frugality and with it a tremendous work ethic. The frugality thing is often criticized, but I think they will have the last laugh - it's only logical.

The economic equivalent of measuring economies can be likened to taking a ruler to the toilets for a measure-up - what it indicates is debatable, and how many will walk out of the loo and give an honest answer? It would be interesting to hear about what Japan did with the workers that were laid off ... were they paid, fed and put to work nonetheless?

Depression in Japan? Not that I have seen. In fact it has been hard to see too much impact even from the latest GFC. When demand crashes they switch off robots, shut down shifts etc... it is amazing actually how well many Japanese companies manage slow downs. (they learned a lot from the post bubble days)

Separate virtual economies from real ones and the range of scenarios becomes clearer (and less extreme). For Australia, there's a reliance on imported oil, but not a total one. Plus, food production is still good. So apart from losing money on stocks or having some kind of dumb-ass regime put in place, and barring some kind of fatal disease, we should be _materially_ okay even if Lord Voldemort takes over Hogwarts.

Thing is, the US's return to its feet so soon is... unconvincing. I don't under-estimate the size of its economy or its global power, but the idea of a real recovery in US this soon raises at least one eyebrow. Amazing what a band-aid and a bottle of rum can do, eh?

If the US wants to drag herself out of this one and enjoy another half century of blissful, effortless prosperity, then international markets have to be refashioned. China has to become weaker, for example, and the US's other potential rivals need to be put back in any box they might hope to jump out of. Other real economies are looking like outshining the US's real economy soon (with all its other knock-on effects including military development). The only way to stop that trend is to do real things to those rivals - not just talk or fiddle numbers on electronic fiat money. Consider the effects of blocked sea trade routes, flash invasions of small countries by large countries (aside from US) and quite quickly we could be cut off from our favourite trading partners. Then we could expect a bit of real hardship plus some artificially imposed hardship on top, considering how much governments love to benefit from people's bad luck.

There isn't a precedent for the current situation, but it doesn't mean it's unpredictable, but mustn't think we can predict the swing of an elephant's tail just by the movement of flies around its backside.

Wonder what BB's cash position is? Or does he agree with Buffet that cash isn't a good thing to be in long term?

Or is he thinking more in terms of a 1930's deflationary crash? Or more like a USSR (or even Zimbabwean!) inflationary depression. (Assuming there isn't actually growth???) So many questions. So few answers.

But given the way central bankers can twiddle things, Japanese style sounds like a probable worst case scenario for mine? Which doesn't sound that bad???

I'm hoping that thought I had doesn't happen.

Never too late to start for anyone else of course.