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Gold/Mining/Energy : Gold Price Monitor
GDXJ 105.33+5.2%Nov 26 4:00 PM EST
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To: goldsnow who wrote (8241)3/13/1998 10:07:00 PM
From: Abner Hosmer  Read Replies (3) of 116770
 
Goldsnow -

I've been mulling over this problem of Japan. Japan's financial institutions have a serious problem, and Japan is experiencing an enormous credit crunch, no one wants to loan out any money. The Japanese consumer doesn't want to spend. Asia has collapsed, so they aren't going to be buying a lot of Japanese goods, and they're going to be stiff competition as well. Japan is on the verge of recession and her banks are on the precipice of insolvency.

US banks are at their fattest and most profitable in many decades. Foreign capital flows into the US are expanding. A number of Japanese institutions are already coming over here and attempting to sell preferred classes of securities in an attempt to reflate their balance sheets.

Doesn't the obvious outcome begin to suggest a significant change in trend, that is, that Japan is going to have to borrow money from abroad to finance growth, and paper over her depleted balance sheets? The question in my mind; is Japan going to have to make the shift to deficit spending in order to recover, perhaps even becoming a debtor nation in the process? It would seem that this may be the inevitable outcome that Japan has been trying so hard to resist.
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