Tokyo nightclub owner Sakura Masui is nowhere close to the modern-day geisha girl she appears to be, shuffling demurely in a purple kimono as she pours drinks and chats in hushed tones.

The 34-year-old former office worker and bar hostess had the vision and the business smarts to exploit Japan’s biggest economic disease: the downward spiraling of prices known as deflation that is eroding profits, paychecks and growth while leaving analysts and politicians alike clueless about a solution.

For the first time since the Great Depression of the 1930s in the United States, fears are growing around the world about deflation.

While cheaper prices may sound like great news to most consumers, they are dangerous in the long run. As prices fall, profit margins are squeezed, forcing firms to eventually cut wages. Debts, whose values are fixed, become harder to repay.

Once the spiraling plunge gets going, it’s hard to get out, with low prices leading to lower profits and incomes — hobbling spending, which in turn leads to even lower prices.

Perhaps there’s something the world can learn from Japan.

Deflation is entrenched here. Prices have been slipping for at least four years. The worst nightmare for many industrialized nations is to follow in Japan’s footsteps and sink into a deflationary quagmire.

More alarming still is the apparent impotence of Tokyo’s efforts to cure deflation.

The central bank has been pumping the financial system with extra cash and slashing interest rates until they are now virtually at zero.

But deflation hasn’t gone away, producing not only countless losers but also rare success stories like Masui.

Masui and her twin sister, Shiho, bought their tiny bar in the heart of the glitzy Ginza district of Tokyo for a bargain 9 million yen nine years ago, just about the time when the speculative “bubble” burst and inflated real estate prices crashed — the first chapter in this country’s deflationary saga.

Ginza, long the most expensive property in Japan, has recently dropped to about a third of its value a decade ago.

The sisters also came up with a new concept in nighttime entertainment: the no-nonsense, affordable night club where fees start at about 10,000 yen a person, less than a third of the going rate for Ginza. It turned out to be a timely move.

The old-style clubs that once thrived on companies’ hefty expense accounts were getting hammered by the slowdown and rapidly going bust.

But Futagoya, which means “the twins’ club,” added three nearby shops, including a karaoke bar, and grew into a 300 million yen a year business employing 110 people.

“We made a Ginza revolution,” Masui said. “That’s what’s wrong with Japan. Everyone wants to be like everyone else. But the only way to make money is to be different from everyone else.”

Deflation may have been a blessing for Masui. But it’s been devastating for manufacturers fighting dwindling revenue and for homeowners paying mortgages on property worth less by the day.

Analysts say lagging demand — as seen in stagnant consumer spending, backlogs of inventory, record-high unemployment and stumbling corporate investment — is blocking economic revival. But policymakers are divided on tackling deflation.

Some are advocating lower taxes while others want higher taxes. Some think more government infrastructure spending is the answer, but others say these already massive spending sprees must be trimmed.

One proposal is for the central bank to buy up securities and real estate. Another recommends printing more yen to lower its value.

The most bizarre call is to artificially trigger inflation, or higher prices, precisely what economists have worked so hard to prevent. If people expect prices to shoot up, proponents argue, they may finally go shopping, ending deflation.

“I think it will work,” said Hiroo Yamagata, a consultant who has written books on the economy. “Scaring people into spending is one way of doing it.”

But others say it would be premature for Japan to adopt this policy, known as inflation targeting, because the country should first restructure its wobbling banking and industrial sectors.

Analysts agree on one point: There are probably no quick fixes.

Worried about their future, Japanese are hoarding savings rather than spending.

Masui was ingenious in responding to changing deflationary times and pioneered a business catering to those on stringent budgets who enjoy the status of Ginza.

She did away with the fancy refreshments and furnishings characteristic of the old-style clubs. She slashed costs by buying kimonos directly from the tailors and styling her own hair.

Having lived in Canada, she speaks both English and French, a handy skill in a globalizing business world. A college graduate, she is a popular writer, with books out on business acumen as well as novels.

Sanshi Sakabe, chief executive of Dynic Corp., a Tokyo company that specializes in wallpaper and bookbinding, says Masui’s place is a breath of fresh air next to the pretentious, expensive clubs.

“I respect Sakura as an entrepreneur,” he said.

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