But is that any reason to suppose that events will pan out in the US as they did in Japan? It seems like it would be reason to believe the contrary… and these aren’t the only differences. Japan was/is a net exporter - the US is a net importer. Japan was a net lender - the US is a net borrower… the list goes on.
That may indeed be the case - this possibility is certainly open to you. But how many Americans actually do invest in gold and silver - what percentage of US monetary savings is held in the form of gold/silver and will thus protect US citizens against what crushed the Japanese? If US citizens, on average, have a high proportion of their wealth invested in commodities such as gold that will enable them to resist the forces of inflation then that would certainly alleviate matters. My concern is that, although this option is certainly available to them, only a tiny fraction of investors in the US actually have any gold or silver - or indeed any commodities at all. My understanding was that the vast majority of Americans had their money tied up in stocks and housing.
More importantly however, and as Shostak points out, is that until such a time as Americans switch to using a currency that is not subject to inflation, their real savings are being eaten away by the malinvestments which are the result of inflation. In the context of todays events where you can see hundreds of billions of dollars being pumped into the system to subsidize the malinvestments of the primary dealers, one has to recognize that a very real destruction of America’s real savings is currently being realized in this way. He asks whether this inflation/malinvestment is resulting in a reduction of real savings, and an obvious question would be, if so then when will those real savings run out - since that will be the point at which the proverbial goose is cooked.
Whilst official statistics don’t really talk about real savings, they talk about nominal savings, official statistics indicate near zero or negative savings rates in the US. As an aggregate, the economy has been running losses for years, consuming vastly more than it produces (to the order of more than 700 billion a year) - so technically the US as a whole is saving less than negative $700b a year (in nominal terms). What those nominal negative savings translate to in “real savings rates” is difficult to say, but it doesn’t immediately sound like healthy real savings rates to me.
Long term, we are effectively talking about a subsidized economy here and whist I think subsidized activities can last quite a while (look at European agricultural subsidies) these come at a cost. Subsidies in one sector of the economy are paid for by some other sector of the economy. Here we’re talkin about one nation being subsidized by other nations and so the people subsidizing the US economy are not US citizens… they are primarily Asian citizens. If there’s trouble in Asia (which there’s not currently - thank god) then I think it’s entirely possible that the place that trouble will cause the most pain is in the US… if you take away the handouts then the US economy is not currently sustainable without some very serious modifications to what it produces - vast swaths of service sector workers would need to be axed and go back to manufacturing or export industries.
So in that light, it seems to me that probably any crisis would be triggered not by internal factors but a withdrawl from the US dollar and a general reluctance to invest in US govenment bonds on the part of international investors… the US economy is, very much, at the mercy of international investors. As an international investor myself, I can say that I’m certainly not buying US government bonds any time soon. Given that yeilds on these are now below the rate of inflation I can’t think why any other international investor would want to do so either - unless they believed that inflation were likely to turn into deflation some time in the near future, perhaps because “recessions are deflationary by nature”… but I haven’t personally found much support for the argument that recessions are deflationary:
https://forum.freecapitalists.org/t/recessions-are-deflationary-by-nature/895/3