Fitch came out Monday with a downgrade of Japan’s debt to A from A+. Moody’s downgraded Japan in Dec.
In its report Fitch noted, “prospects for success in permanently lifting the economy’s real and nominal GDP growth rates remain in doubt.”
Japan has been attempting to jump start the economy for the last 25 years through printing yen to spur economic growth, with little success.
Now this week we have the first look at US Q1 GDP. A reading of 0.5% may be too rosy a level for prospect growth here.
Prospects of growth in the US are also doubtful for Q1.
Despite many economists proffering the idea that issuing mountains of debt is the best way to grow your way to prosperity. Can’t be done.
Japan’s lost decades is the proof.
What can turn this around is wage growth for what middle class is left in the US.
The US can have prosperity, but the Fed believes it would be inflationary, hence wages are stagnant and growth is stifled.
The lesson is managed economies, manage to screw the populace.