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Non-Tech : Monetary Policy and Standards

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To: Frank Sheridan who wrote (25)8/26/1999 12:08:00 PM
From: Hawkmoon  Read Replies (2) of 29
 
My question is, does the fact that Japan and China have quasi-centralized economies tend to distort the effect that the supply of tokens will have upon inflation or deflation?

That is a VERY GOOD QUESTION!!

Part of the problem, as I understand it, is that so much of the stimulus policies enacted by Japan throughout the past 10 years were mainly directed towards merely keeping people employed, rather than investing in wealth creating projects like improved infrastructure (parks and monuments... etc).

And when investment did take place in industry, it was mainly directed towards increasing capacity and market share, rather than research and development. In almost every case it seems that innovation and entrepreneurialship towards producing profitable industries were ignored in favor of producing more and undercutting the competition.

Maybe my statements are painting the picture with a broad brush, but the evidence of financial mismanagement and half measures lies in an economy where depositors are lucky to get .24% for their money, and borrowers can obtain money for .50%....

With an estimated $12 Trillion in deposits sitting in banks or postal savings plans, it certainly is not an issue of not having the wherewithal to have a vibrant consumer sector, but a matter of will (both on the part of govt and consumers).

Regards,

Ron
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