Deflation Debation in Denation
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 3 February 2023
⏱️ 30 minutes
🧾️ Download transcript
Summary
I have a view of where the United States is in its economic cycle that I have had for quite some time, and that has substantially informed many of the macro assumptions I bring to portfolio management. I have shared this overarching worldview many times over the years in Dividend Cafe and elsewhere, and I am constantly refining it, analyzing it, and even challenging it.
It has the word “deflation” in it, though I really believe the term “Japanification” is a better encapsulation of my perspective. “Deflation” is often associated with “depression” and no one in their right mind believes we are in another “great depression.” And of course, the boom of inflation that we saw in 2021 and 2022 did not create a lot of discussion about the threat of deflation (like worrying about freezing to death in a heat wave). But temperatures do get very cold in the same places that they get very hot (I just made up that analogy right there). And as I have written before, there was nothing in the 2021-22 inflation that remotely contradicted my macroeconomic thesis.
So what I want to do today is re-hash the greater macroeconomic view that I believe properly frames our perspective at The Bahnsen Group. Some history is needed, some updated data, and some general understanding of what is making this road to Japanification tick. I promise it won’t be boring.
Okay, I don’t promise it won’t be boring if you are still reading desperate to get to some juicy tabloid gossip. But if you are still reading because you need a little more E-conomic talk and a little less E! Channel in your life, then you have come to the right place. Let’s jump in to the Dividend Cafe …
Links mentioned in this episode: TheDCToday.com [DividendCafe.com] https://bahnsen.co/3JBih4f TheBahnsenGroup.com
Transcript
Click on a timestamp to play from that location
| 0:00.0 | Welcome to the Dividend Cafe weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. |
| 0:12.4 | Well, hello and welcome to the Dividendon Cafe recording for you from Newport Beach and the month of January is behind us. The latest Fed meeting is |
| 0:24.1 | behind us. I did get a lot of good feedback about last week's talk on where we're headed |
| 0:30.8 | with recession. I don't think the recession debate is behind us. Yet it was time for me to put back in front of us a discussion around the subject of |
| 0:42.3 | what I call Japanification. |
| 0:45.0 | And even though I titled Dividend Cafe this week, deflation, debation, and donation, |
| 0:52.9 | that was really because I was being clever. |
| 0:55.4 | And there is a sense in which deflationary issues are at the heart of this. |
| 1:01.2 | But I think that there is a need to constantly refresh what I'm talking about on this subject. |
| 1:10.6 | It's a macroeconomic, secular, long-term, historical, generational, important matter for how we think |
| 1:20.1 | about investing, how we think about economic life, and very possibly what it means in terms of |
| 1:25.2 | political and cultural life in the United States and elsewhere in the |
| 1:31.7 | world as well. So here's what I want to go through today. What do we mean by Japanification, |
| 1:42.0 | why this topic has become a bit complicated in the last few weeks. |
| 1:47.2 | So let's get that out of the way first and not the last few weeks last couple years. |
| 1:51.4 | There was, let's just say, a rather overwhelming theme playing out on the world stage in the UK, |
| 1:58.4 | in the EU, in Japan, and in the United States, post-financial crisis, |
| 2:05.9 | where central banks were absolutely flabbergasted that there was not more inflation. |
| 2:13.2 | On paper, they seem to be doing a lot of things to create inflation, very low interest rates, |
| 2:19.1 | very high priming of the money supply, the buildup of excess reserves of banks with money |
| 2:26.9 | that was effectively printed, though not circulated. |
| 2:32.5 | And a general explosion of governmental spending. And those things did not |
... |
Please login to see the full transcript.
Disclaimer: The podcast and artwork embedded on this page are from The Dividend Cafe - The Bahnsen Group, and are the property of its owner and not affiliated with or endorsed by Tapesearch.
Generated transcripts are the property of The Dividend Cafe - The Bahnsen Group and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.
Copyright © Tapesearch 2026.