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Turning Japanese

As overstretched financial institutions collapse, we are learning to fear debt—like Japan in the 1990s

By Jonathan Ford   October 2008

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Following the demise of Lehman Brothers, Merrill Lynch and the giant insurer AIG, pundits have been quick to compare today’s turmoil to Wall Street’s great crash 79 years ago. This has now been billed the worst financial crisis since the great depression. This may be true for Britain and the US. But a more recent parallel may be drawn with Japan’s so-called “lost decade.”

Unlike the events of 1929, the Japanese debacle occurred very much within living memory, and its causes remain the subject of heated debate. But the…

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