In 1989, the entire financial world agreed: Japanese inflation was inevitable.
They were spectacularly wrong for 35 years.
Now the US is making the EXACT same mistake, and I can prove it with 3 charts. 🧵
They were spectacularly wrong for 35 years.
Now the US is making the EXACT same mistake, and I can prove it with 3 charts. 🧵
Japan 1989:
✅ Massive money printing
✅ Sky-high asset prices
✅ "Inflation is coming" consensus
US 2025:
✅ Massive money printing
✅ Sky-high asset prices
✅ "Inflation is coming" consensus
Spot the difference? There isn't one.
✅ Massive money printing
✅ Sky-high asset prices
✅ "Inflation is coming" consensus
US 2025:
✅ Massive money printing
✅ Sky-high asset prices
✅ "Inflation is coming" consensus
Spot the difference? There isn't one.
"But Japan is different—they have unique cultural factors!"
No. They have DEBT.
Japanese corporations and households were so overleveraged that no amount of BOJ stimulus could make them spend instead of deleverage.
Sound familiar?
No. They have DEBT.
Japanese corporations and households were so overleveraged that no amount of BOJ stimulus could make them spend instead of deleverage.
Sound familiar?
Here's what happened in Japan:
35 years of deflation
Zero interest rates
Gold fell 45%
Bonds crushed every other asset class
The variable that mattered? Debt-to-GDP ratio.
Guess who just matched Japan's 1989 levels? 🇺🇸
35 years of deflation
Zero interest rates
Gold fell 45%
Bonds crushed every other asset class
The variable that mattered? Debt-to-GDP ratio.
Guess who just matched Japan's 1989 levels? 🇺🇸
Full analysis + 3 bold predictions in my newsletter: []open.substack.com/pub/hacheimsch…
The mechanism is simple:
High debt + rising rates = exploding debt service costs
Consumers cut spending → businesses cut prices → deflation spiral
We're already seeing this:
Credit card delinquencies rising
Auto loan defaults at 2010 levels
Excess savings: GONE
High debt + rising rates = exploding debt service costs
Consumers cut spending → businesses cut prices → deflation spiral
We're already seeing this:
Credit card delinquencies rising
Auto loan defaults at 2010 levels
Excess savings: GONE
"But the US has immigration and innovation!"
Japan thought the same thing.
Immigration is politically toxic everywhere.
AI is DEFLATIONARY (it replaces workers and cuts costs).
These aren't inflation catalysts—they're accelerants for deflation.
Japan thought the same thing.
Immigration is politically toxic everywhere.
AI is DEFLATIONARY (it replaces workers and cuts costs).
These aren't inflation catalysts—they're accelerants for deflation.
The cruel irony:
Everyone's buying inflation hedges (gold, Bitcoin, TIPS) because they learned from the 1970s.
But we're not in the 1970s. We're in 1930s America or 1990s Japan.
They're fighting the last war with the wrong weapons.
Everyone's buying inflation hedges (gold, Bitcoin, TIPS) because they learned from the 1970s.
But we're not in the 1970s. We're in 1930s America or 1990s Japan.
They're fighting the last war with the wrong weapons.
What to watch:
Core PCE falling below 2% (we're at 2.6% and dropping)
Long-term yields breaking below 4%
Fed making emergency cuts despite "sticky inflation"
When you see these, the Japan playbook is live.
Core PCE falling below 2% (we're at 2.6% and dropping)
Long-term yields breaking below 4%
Fed making emergency cuts despite "sticky inflation"
When you see these, the Japan playbook is live.
My boldest call: Core PCE inflation averages below 1.5% for all of 2027.
We're not going back to high inflation. We're going to Japan.
Am I wrong? Tell me why debt dynamics are different this time.
We're not going back to high inflation. We're going to Japan.
Am I wrong? Tell me why debt dynamics are different this time.
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