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Strategies & Market Trends : John Pitera's Market Laboratory

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To: Gary E who wrote (7642)	3/9/2007 12:44:52 AM
From: Hawkmoon	Read Replies (1) of 33421

If the interest rate over there is zero or very near it... How do banks make any money? Because they lend the money out to both domestic and foreign borrowers at a rate more than they pay their depositors who, apparently remain quite satisfied receiving less than 1/4 of one percent interest. asia.news.yahoo.com And apparently the Prime rate in Japan for borrowers is 1.63%. That's quite a profit margin for them in this carry trade. One more thing to consider when trying to figure out if the Bank of Japan and the government are going to do what is needed to stabilize their monetary base INTERNALLY, rather than relying upon foreign borrowers. When you're talking about TRILLIONS of dollars in Yen based deposits, it's quite lucrative. Hawk

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