Trouble In The Far East
Steve Forbes, Forbes Magazine, 12.10.01, 12:00 AM ET
Japan: Falling Off The Cliff
Argentina's woes dominate the financial headlines, but an even greater catastrophe is unfolding: Japan. The Japanese government recently announced that Japan's slump is deepening. More ominous, its financial system is on the brink of disaster as its banks, including the large ones, reel from the catastrophically growing volume of nonperforming loans. Japan's life insurance industry is also hemorrhaging. Millions of whole-life policies are guaranteeing returns in excess of what companies can earn on government bonds.
The government's inability to deal with the crisis is frightening. Corruption, plus powerful, autocratic and largely unaccountable government bureaucracies, have stymied a long-needed overhaul of the banking system. More immediate, the Bank of Japan continues its strangulating monetary deflation. That interest rates are near zero demonstrates how few vital signs of economic life are still detectable. Banks aren't lending...
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