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Gold/Mining/Energy : Gold Price Monitor
GDXJ 97.80+0.9%Nov 19 4:00 PM EST
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To: philv who wrote (13232)6/16/1998 11:03:00 AM
From: Henry Volquardsen  Read Replies (1) of 116764
 
ahhaha: Dump truck load of money downtown Tokyo:

That would work, as my previous suggestion of dropping cash from an airplane.
Really shows the problem though, how to distribute the printed pieces of paper to
the masses.

That, in fact, would not work. The problem in Japan has not been getting money into people's hands but out of them. The combination of Japanese cultural traits, the aging demographics and the collapse of asset prices in all investment classes have made the Japanese public much more likely to safe any money put in their hands than to spend it. So if you did dump that truck load of money it would just wind up in a low interest savings account. And the the account would most likely be at Citibank and not a Japanese bank. The real problem in Japan is getting the consumer to spend and get the economy going again. There have been tax incentives and other measures to get more money in the hands of consumers over the last few years and it hasn't done anything to stimulate demand.

They can do it by lowering interest rates (In Japan's case not an
option}, lowering taxes or subsidizing prices.
The low interest rates are part of the problem. Japanese are naturally big savers. The low level of interest rates have cut dramatically into their perceived income and have had a reverse wealth effect by discouraging spending even more and encouraging more saving to make up the shortfall of income on their current assets. In the Japanese case lower interest rates are helping perpetuate the deflationary cycle.
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