Occasionally I like to point to Japan as a potential model for North American real estate values because try as they will, the Bank of Japan and the governments of the day have not been able to reverse the course of their multiple decades of deflation. My last post on Japan looked at what the population does when faced with falling asset values and wage destruction; they reduce spending and increase savings.
The latest attempt to re-inflate asset values by Shinzō Abe (Abenomics), the current Prime Minister of Japan is a massive plan to double the BoJ’s balance sheet and get inflation up to 2%. So far after 6+ months of Yen printing the March 2013 CPI in Japan was negative at -0.09% Y/Y. The flood of Yen instead of goosing the economy has driven the animal spirits to jack up the Nikkei stock market by over 60% in 6+ months.
See comparison of Japanese & U.S. CPI as a potential Canadian path.