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Strategies & Market Trends : John Pitera's Market Laboratory
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To: Sam who wrote (5562)2/11/2002 7:21:43 PM
From: Hawkmoon   of 33421
 
Excepting of course whatever the massive amounts of then essentially worthless paper that the BOJ would print.

Well, it's supposed to be backed by the "full faith and credit" of the Japanese government, since most of those postal savings deposits are used to purchase JGBs issued from the government, as well as corporate paper (to a total of 130% of GDP, and possibly up to 150%)...

And if I'm not mistaken, the Japanese pension plan is corporate based, and there isn't much of a Social Security system that I've heard of (since lifetime employement was apparently "guaranteed" by the large companies they work for). Loyalty to the company was supposed to negate relying upon the government for retirement pensions.

So they save. And save some more... knowing that they have to bear personal responsibility for having sufficient money to retire upon. And now the government is about to severely damage the purchasing power of their life savings.

And that's why I wonder whether those Keyesian "animal spirits" may be set loose in Japan eventually, despite the fact the government is going to bail out the banks to the tune of $74 Billion (and likely more)...

That $74 Billion the government is going to issue, to be paid off with devalued Yen down the road.

Hawk
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