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Strategies & Market Trends : Asia Forum

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To: Zeev Hed who wrote (4887)	6/28/1998 1:43:00 PM
From: Worswick	Read Replies (2) of 9980

Zeev thanks so much for the reply. I'd like to hear you address the matter of "credit implosion" or "credit deflation" in addition to your thoughts on "deflation is a result of declining aggregate demand." It seems to me that in Japan and in South East Asia what we have is a substantially impaired credit sector. We have in fact the intimate view of billions of dollars going off to money heaven. In Japan the banks have been calling in their credits right and left according to my Japanese friends. In Malaysia, according to Stitch and Bernie Tate, the banks have absolutely tightened up on lending. How do you create aggregate demand in a deflationary environment.... if there is no liquidity to build the things to sell and to satisfy the demand? At that today, this moment, there are too many things in the market to sell already; and, we are witnessing everyone trying to sell anything they can lay their hands on to create liquidity. The "trap" we are in is that the Asian producers produce and the buyers in the West buy but it is a broken loop. There is no "demand" amongst the producers except to cut their losses. My best to you, Clark

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