|U.S. Adjusted Monetary Base/GDP since 1929 (St. Louis Fed)|
I also threw up a chart comparing Japanese and U.S. interest rates "after the crisis" from Shirakawa's slides. Specifically their 10-year government bond yields, AA 5-year corporate bond yields, and 30-year fixed mortgage rates from Q1/2012. And bank loan rates and expected rates of inflation over the next 10 years from Q4/2011. Obviously the Fed is trying to spur inflation to breakaway from a potential Japanese deflationary spiral. But monetary policy has its limits as you can see. I'll post some recent vids featuring Richard Koo who is an expert on the Japanese deflationary experience ("balance sheet recessions"). Here is an INET speech and Bloomberg TV video from 2011. He believes that fiscal tightening will kill the recovery in a secular balance sheet recession (see GDP estimates if U.S. hits the Fiscal Cliff). And it looks like the U.S. national debt hit 16 trillion today! The debt limit is at $16.394 trillion.
Source: Bank of Japan