The world’s 3rd largest economy, Quantitative Easing or QE champion and Keynesian monetary policy poster boy of failure Japan reported an 11th consecutive trade decline in August on a year ago basis when exports dropped 9.6% and imports plunged 17.3%. Classic deflationary credit bust and anyone in need of a lesson on the ineffectiveness of QE or quantitative easing needs only to look at Japan. 25 years and counting and all they have to show for it is record debt. If borrowing your way to prosperity was possible Japan would be an economic paradise and an example for the world, same would be true to a lesser extent for the USA and Europe. The fact that all struggle with deflation, economic growth that is barely positive and steadily rising debt levels tells you everything you need to know. Once interest rates hit zero or close to it the debt based economic growth model hits the wall and ceases to function. Once again it is basic mathematics because deficits do matter a great deal along with their accumulated debt once the ability to lower debt servicing costs is lost.