During the peak of the bubble economy in the late 80s, Japan was worth four times more than the entire United States. Stock prices and land values have fallen by two-thirds from their peaks. Japan is worth less than 10 years ago, and every day the value of its land, citizens, companies and products contracts a little more. The Iwakis are among the millions of Japanese families who have seen the value of their home fall by more than a third in five years. Wages are shrinking.
Spending is down.
This met the definition of deflation, which is two consecutive years of decline. No one is sure what comes next because no one has been here before. Even the United States depression of the 30s did not see such a sharp rise and protracted fall. Deflation creates a world in which common sense turns upside-down and the wrong way round. It is also reflects the dark conviction that things can only get worse.