Word of the Day: Downward spiral
If something is in a downward spiral, then it is either getting cheaper and cheaper or worse and worse.
Think about an airplane that has stalled and is now falling out of the sky.
It’s going around and around in ever-tighter circles as it gets closer and closer to the ground.
Sooner or later it will stop falling.
You may think that if things continue to get cheaper and cheaper, then it’s good for you, and it is.
However, it’s not good for the economy in general.
The government has been desperately trying to move the needle for thirty years now. Although the Bank of Japan has been attempting to force the inflation rate up to a healthy 2%, it hasn’t happened yet.
Interest rates are amazingly low and believe me coming from North America. I find Japan a surprisingly inexpensive place to live, as long as you stay out of the big cities, that is.
In Japan, prices have been in a downward spiral for decades. The problem is that so have incomes.
Due to this, wages have not risen very much during the same period.
See, if prices are in a downward spiral that may not be beneficial for you.