Worswick, you are absolutely right, Japan has money "locked" up in two vault, the first is the postal system, the other is "unperforming assets". Unless these assets are written off (allowing the recoverable part of the money to get back into the lending game), and until the big bang let savings find their most productive channels, they will be in trouble. The beauty, is however, that Japan has the wherewithal to solve these problems, and much faster than it took us to solve the self inflicted S&L crisis.
Remeber that a yen in net tangible can allow lending of 12.5 additional yens. So close those banks that cannot meet minimum tangibles, protect depositors and creditor (but share holders) and let the stronger banks actualize (sell, even to foreigners) these assets and now they have money to put into the economy. It does take hurting stock holders (and of course the incompetent management) of the excessive risk taking institutions, and they need the political courage to do it. If they match this with a propaganda campaign that spending is good for the "Patria", Japan can revive, and if Japan revives, the rest of Asia will follow within a year or two.
Zeev |
