The potential of a long debt-deflation period resembles Japan, but with a crucial difference.

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This caused a debt-deflation spiral in America that infected the rest of the world.

BBC: Thinking outside the 1930s box

Therefore most of the political forces in the U.S. will be pushing for inflation if the current debt-deflation scare scenario goes on too much longer.

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But there is a growing sense that Japan's problems - debt, deflation and demographics - must be confronted by policymakers and voters and not ignored for too much longer.

BBC: Japan: Debt, demographics and deflation

Currency devaluation largely avoids dealing with the short-term negative consequences of debt deflation in favor of prolonging the period time that the bad debts remain embedded in the system.

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From then on, some believe, demography will seriously aggravate Japan's other D-words debt, deficits and deflation.

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Companies, meanwhile, have been focused on paying down debt, as well as coping with deflation in the domestic economy and competition from cut-price imports.

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However, it would yield a chronic deflation that would produce high unemployment and would likely make long-term debt financing too risky (for both lender and borrower) to be undertaken.

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But in reality, deflation is the free-market approach to rectify a secular period of superfluous money supply growth, debt accumulation and asset price appreciation.

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If deflation took hold, the gap in demand left by those fleeing debt would not be filled by cash-rich consumers, who tend to be less free-spending.

ECONOMIST: Debt and deflation