The July 22 Financial Times included an interesting take on the deflation scare. In a letter to the editor, Takashi Ito from Tokyo, Japan writes:
“Sir, As people the world over contemplate life with deflation, here is a bit of heartwarming news from Japan. As long as you have a job and keep all of your assets in cash, life in deflation is great.
Cars from Honda, clothes from Uniqlo and fried salmon breakfast at the Royal Host family restaurant chain are all cheaper but better quality than 14 years ago at the height of the bubble.
Unbelievable but true. There has been a return to authenticity, led by consumers; people will just not accept shoddy quality for their yen anymore.
Companies sweat more for their profits; but those who get by probably feel more pride and fulfilment than those days when the value of their property assets dwarfed anything they could earn from their real business.
Deflation: if it comes it comes, even when central banks start doing some desperate things. Like the dinosaurs in Jurassic Park, life finds a way.”
