Note this fact: The U.S. ten-year Treasury bond pays 3.18 percent, whereas a ten-year Japanese government bond pays 1.16 percent.That's Greg Mankiw. Photo link here.
No, I am not predicting the United States is about to become just like Japan. But it is not inconceivable. That is why buying long-term bonds now is not a crazy investment strategy, and selling them (as many companies are now doing) is not at all a sure thing.
UPDATE: China, too. Jim Chanos thinks:
A lot of people are willing to say China will slow down. The really scary thing is if you do the numbers and they cut back on construction it's not a slowdown, and they go negative real fast. ... The fact of the matter is if they hit the breaks really hard, the economy goes into reverse. It doesn't slow. Nobody will say that publicly because it's unbelievable. But it happens to be the way the numbers work.
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