OK. Frank. In respond to your big mac attack here is mine counter
counter points.
>Interest rates effect the value of a dollar. If I own yen, and the dollar held in the US
> will go up 5% compared to my yen at 3%, then I will buy dollars. This assumes
> equilibrium in dollar to yen, which is that I can buy a hot dog for relatively the same
> amount in both countries. My act of buying dollars strengthens the dollar and weakens
> the yen. The central bank of Tokyo has no choice but to raise rates to ensure people
> buy yen and that equilibrium is maintained.
The Japanese gov can't raise rate. It's true that their rate is
already low but their real rate (official rate - inflation) is not.
They really would like to lower rate but they are already so low
that they can't. If they raise rate, their economy will implode.
The US Fed, seeing this is forced to hold rate increase fearing
the Japanese AND the SEA countries will be hurt.
Seeing that, the japanese people & businesses will move their money
out of the system into dollar thinking that their money will
hold their value better because Japanese has dis-inflation.
That in turn push dollar up, US rate down and Yen down further
widen the yen-dollar spread. This will not change until their is
fundamental change within the Japanese system.
As for your point of the Japanese dumping products into the US market,
this is already happening. The trade deficit will get wider and wider
as the Japanese tailspins. But wait!! What does the Japanese
companies do when they get their profit?? Where will they put their
money? Right back into the US . So the US are getting cheap good
products with a big IOU. Don't forget the US still have 2-3%
inflation. The longer the Japanese loans the US their money, The
less they will get back. Also, the Japanese is losing funds
for future investments like factory building. In another word,
they are killing themselves. They are giving us the goods and
invest here in the US. So Japan is not going to take the US down.
The reason is that the US system is sound.
The Internet is not going to stop growing just because Japan is
dying. The US, Europe, China and India are growing fast. And
the US is growing also. CHKPF is king. It's very hard to
overthrow a king. And this king has cloths on. It has new
product in new field like VPN & Floodgate. CHKPF is already strong
in VPN. Floodgate has very little competition. CHKPF is not just
a firewall company. Furthermore, security is not an optional
product. Every company needs one to protect itself from hackers.
AND chkpf is cheap.
Long live the KING!!! |
