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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: carranza2 who wrote (31657)4/17/2003 12:43:28 AM
From: EL KABONG!!!  Read Replies (1) of 74559
 
carranza2,

Repatriation of Japanese wealth, primarily from US$ denominated investments into Japanese yen denominated investments, is unlikely in the near term future. As long as the Japanese equivalent of Joe Six-Pack has very few viable investment opportunities in Japan, s/he will remain quite content to leave their investments in the relative perceived safety of US$ denominated investments. The Japanese may switch their investments from stocks and stock funds to bonds and bond funds, or they may have their liquid cash in money markets, savings accounts and CDs. The interest rates in the money markets and other cash accounts are quite low, but no where near as low as equivalent accounts in Japan. Traditional and mutual distrust between the Japanese and the Chinese would make it unlikely that the Japanese would switch over to Chinese investments as well. Competition between Japanese employers and companies based elsewhere in Asia make it unlikely that the Japanese would invest in their competitors either. So for now anyway, the money is likely to mostly stay in the USA. But as the American economy slides further into debt, and gains from investing in the US economy becomes more difficult, the possibility of repatriation becomes more likely. As the old Wall Street saying goes, "Fear is a bigger motivator than greed!"...

KJC
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