From what I can tell from some of my more naive friends in financial circles, the mantra on Wall Street is now, Gee- why doesn't Japan "do something." In particular, why doesn't Japan embark on "economic stimulation" program (i.e, inflationary expansionism). Conincentally, this is the solution that would hurt the average Japanese investor,with huge savings, the most (as obligations denominated in Yen become toilet paper). This solution would also mean the bulk of the effect on America would be in the manufacturing/exporitng areas (i.e. on the worker) as the Yen are devalued.
By contrast, the more natural response, letting the market run its course and liquidating already existing assets, would result in Wall Street sharing some of the flu.
Teh proposal for tax cuts, though a good idea longer term, will fall on deaf ears given the immediate need for public funds in resposne to imminent public calls for bailouts.
The simple fact remains: money that people though they had is disappearing (or more accurately was never there to begin with). Assets will be devalued and balance sheets re-done accordingly, including American assets and American balance sheets.
|
