In Japan, for example, the debt deflation started in 1990 and price deflation started in 1992 or 1993. That's what we're in for right now.

The country is entering a period of debt deflation, where households and businesses are forced to move funds from spending to debt repayment. This forces down economic growth and reduces inflationary pressures and long-term interest rates.

As a stimulus proposal, it's a non-starter. The economic impact is very, very small -- almost imperceptible.

The stock market has given off false signals in terms of anticipating recessions, but it has never given off a false signal about recovery before the recession ended.

The net effect was to induce a tightening mode in the markets, in bank lending and in total bank reserve growth, while [interest rates] rose significantly, especially for corporate bond issues. In retrospect, that's not looking very smart.

We've basically been in one long recession that started in the fall of 2000,