The Contrarian's View - January 30, 1998
We have now reached a situation where corporate Japan, Nippon banks, and the Japanese government ALL require a massive influx of money. If one of these entities does not get these funds, then the whole system collapses. All three entities are technically bankrupt, all three require money, and except for the printing press at the Bank of Japan, there is no source for this money. Up until the Asian crises, the Japanese banks were able to supply sufficient liquidity to the system. Now the demand for liquidity has DRAMATICALLY increased, but the supply is contracting. Japan will fail in 1998.- John Kutyn
In this world where no one should fail, banks rescue bankrupt companies by injecting more loans. And when this action threatens the financial health of the banks, governments are called to rescue the banks. And when this action threatens the financial health of the governments, the IMF is called in. And when problems get too large for the IMF, everything collapses. - John Kutyn
The monetarists have been assuring everyone that deflation is easy to avert. Because deflation is a state of mind, when a monetary system is debt-laden, I don't believe it can be averted. Every action will be interpreted in such a way as to fuel deflationary psychology, which puts the spin on the action. I am sure that the Japanese would like a quick fix to their deflation, don't you think? So far, it has progressed for eight years. - Robert Prechter
There must be a limitation on the amount of paper money printed other than a bunch of old men sitting around a room deciding that they should print 10% more this year, or some other number that they concoct. - James Dines
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