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Strategies & Market Trends : Currencies and the Global Capital Markets
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To: friverola who wrote (2978)1/19/2001 9:08:07 AM
From: Hawkmoon  Read Replies (1) of 3536
 
Well, it was one of the few articles that offered a possible solution to many of the other unsolvable issues he addresses in the article like higher debt,
potential monetization of the bad debt through devaluation of the yen, and a tremendous savings rate that indicates a very negative attitude by consumers worried about their future.

I think most of us who have logically analyzed Japan's current liquidity trap and growing national debt (now 130% of GDP), as well as an environment of "free money" due to extremely low interest rates, had come to the conclusion that only an outright devaluation of the yen would provide the impetus for the Japanese to loosen up their wallets and spend.

Right now, however, all they have to look forward to are lower prices for the things that they buy. Thus, a lack of incentive to spend. But the ultimate problem is that for most Japanese, the only retirement plan they have is what they put in the bank.

Regards,

Ron
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