All Clowns Must Be Destroyed Message Board

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Pastimes : All Clowns Must Be Destroyed

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To: yard_man who wrote (33899)	5/19/2000 1:18:00 PM
From: pater tenebrarum	of 42523

i agree...i have discussed this view in detail here a few weeks back. i have no idea how to search for the post though. but essentially, since they have tried everything else, it may be time to try this (i.e. HIGHER rates). one of the arguments goes like this: since the Japanese savings rate is unusually high, it may be a good idea to give people a decent return on their savings, as that may actually get them to spend a bit. furthermore, by raising ST rates, the BoJ could actually give a signal that it's expecting more inflation in the future. that may help boost inflationary expectations in general. furthermore capital inflows would help strengthen investment in Japan. when businessmen realize that inflationary expectations are on the rise, they may well feel compelled to bring capital investment projects forward. the BoJ could at the same time while raising rates continue to monetize the government debt and provide sufficient liquidity at the higher rate. so it would be definitely worth trying. after all, what have they got to lose?

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