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Based on the study of the precedent case “Japan”, I made specific forecasts for developments in the United States in both of my books.

Please judge for yourself.

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The Harder They Fall
Will the U.S. follow Japan into the Abyss? 


October 2004

"the U.S. will shadow Japan's development for many years to come" 

Page 269

Arguably, Japan was the best leading indicator of developments to come in the US not only in the nougthies but to the present.

"In general, deflation [..] will pose the greatest problem to the [US] economy for the foreseeable future"                 

Page 269

Interest rates have been steadily trending down.

"long-term interest rates will decline further"

Page 270

By the end of the noughties, the yield on the 10-year US Treasury bond had declined from 4.1% in October 2004 to 3.6% in December 2009. In October 2008 the yield had dropped to below 2.5%.

"In this environment the American stock market will trend down.""That will eventually bring the Dow Jones below 6000 and the S&P500 below 700. Most certainly, the stock market gaguges will end the current decade at much lower levels than they started it"

Page 270

On March 9, 2009, the S&P 500 hit a low of 666 and the Dow Jones of 6547.

"stocks of finanical institutions are likely to perform worst as a group"

Page 270

Stocks of US financial institutions collapsed during the Great Financial Crisis, with several investment banks being rescued or collapsing (Lehman Brothers). Many banks shared the same fate. 

"The federally sponsored mortgage entities Fannie Mae and Freddie Mac will most certainly face big problems by the second half of this decade"

Page 270

On September 7, 2008 Fannie Mae and Freddie Mac were put into Conservatorship, i.e. bailed out by the U.S. government.

"Most certainly, America's budget deficits will remain on their explosive path for at least the rest of this decade"

Page 270

In 2009, the US budget deficit hit nearly 10% of GDP, the highest since WWII.

Cover Page TiD_best version.tiff

The United States & Japan
Twins in Denial
It's demographics, stupid!

December 2010

"Overall, America will continue to shadow  ̶  if not as dramatically  ̶ Japan's aging process. Hence, America's economic and financial narrative will track Japan's for a number of years before eventually decoupling for good."

Page 272

The Japanification of the US has happened. 

"These forces combined-deleveraging on a personal and corporate level accompanied by a miserable labor market will lead to deflation. With no demand-led prices pressures, the fear of inflation is misplaced, at least for the next few years. To avert a downward spiral in economic activity, the gap in demand will  continue to be filled by government stimulus, as occurred in Japan. Budget deficits will continue to surpass the most pessimistic predictions. Despite sky-rocketing government debt, interest rates on that "risk-free" asset class will trend lower again. The yield on US 10-year Treasury bonds will eventually flirt with the record lows achieved in December 2008, when it reached 2.07%"

Page 284

Deflationary forces have haunted the U.S. throughout the decade, with the Federal Reserve resorting to ever more aggressive policies (Quantitative Easing) to combat this  trend. By July 2016, the yield on the 10-year US Treasury bond had dropped to below 1.5% for the first time.

"The backdrop of ultra-low interest rates will not shore up the stock market, which will likely decline from the highs reached in 2010 and reach a next trough in 2013 or 2014  ̶  close to the level it reached in March 2009 at the peak of the turmoil (S&P500 reached a low of 667 in March 2009). A further trough near the end of the decade is most likely too."

Page 284

This forecast was clearly wrong. The US stock market climbed to new highs in the past decade. Arguably,  the stock market boom was substantially a result of ultra-aggressive market-distorting policies by the US Federal Reserve. 

"in short, not only is the United States wrestling with demographic problems similar to those of Japan, but it is engaging militarily with young and rapidly growing countries. This does not bode well for the outcome on the respective battlegrounds  ̶  whether that is Wall Street and Main Street at home, or Waziristan abroad". 

Page 286

The U.S. has clearly a demographic "Japan" Problem. Birth rates have dropped substantially below replacement level, and the US population is rapidly aging. The outcome on the battleground in Afghanistan has followed the demographic argument. 


"In the US a candidate not belonging to the Republican or Democratic Party, similar to Ross Perot in 1992, would stand a historic chance later this decade" 

Page 288

Donald Trump became President in January 2017.

"Demographics point to massive turmoil ahead, not simply on traders' screens on Wall Street but on the streets of countries experiencing a youth bulge" 

Page 290

The Arab Spring started shortly after publication. 

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