Economic Madness Is Repeatedly Endless

Demand for goods and services in Japan are plunging. Please consider Japan’s Deflation Deepens as Prices Fall Record 2.4%.Japan’s consumer prices fell the most in at least 38 years in August, heightening the risk that prolonged deflation may hamper the country’s recovery from its deepest postwar recession.
Prices excluding fresh food slid 2.4 percent from a year earlier, topping July’s 2.2 percent decline, the statistics bureau said today in Tokyo. The drop, the sharpest since the survey began in 1971, matched economists’ estimates.
“We’ll soon start to see that there isn’t enough domestic demand to push up wages,” said Kyohei Morita, chief economist at Barclays Capital in Tokyo. “As households’ spending power falls, there’s concern that this deflation will lead to further deflation -- in other words, that we’ll enter into a deflationary spiral.”
Much of the drop in prices reflects last year’s peak in oil costs. Crude reached an unprecedented $147.27 a barrel last July, and has dropped more than 50 percent since then.
The oil effect “will diminish over the next few months, quite quickly,” said Richard Jerram, chief economist at Macquarie Securities Ltd. in Tokyo. Even so, Jerram expects prices will keep falling for at least another three years as the country enters a period of “persistent deflation.” Economic Madness Over Pork Prices
In what amounts to economic madness, Japan to Buy Domestic Pork to Boost Prices After Demand Drops.Japan, the world’s largest pork importer, will purchase about 70,000 swine carcasses from local herds to boost prices after an economic slump cut consumption and sent stockpiles of the meat to the highest level in 20 years.
The government will spend 292.9 million yen ($3.3 million) on the purchasing program, the Ministry of Agriculture, Forestry and Fisheries said in a statement today.