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Strategies & Market Trends : Currencies and the Global Capital Markets
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To: Henry Volquardsen who wrote (551)9/3/1998 10:15:00 AM
From: see clearly now  Read Replies (2) of 3536
 
"This was fueled by very cheap yen borrowing costs at the time. Yen interest rates were much higher than now but the extraordinary strength of the Nikkei at the time allowed Japanese companies
to issue debt with attached equity warrants that generated, in many cases, negative interest rates. In other words they were paid to borrow. This free money fueled massive speculative investment throughout Asia."...I have witnessed this first hand as a consultant to the public Sector in Japan ..the projects built and contemplated were unbelievable from our western economic perspective..of using real money backed by taxpayer revenue!
I too am an amateur in the world of the kind of financial "shenangigans" that were being deployed..but my instinct tells me that the financial techniques being used (world wide) by the industry to leverage the amnount of money made out of a dollar of real assetts have far exceeded the value they contribute to liquidity and human development and that what you describe as symptomatic in Japan is in fact likely the very reason that the world wide financial system needs a cleansing to get the huge industry of "middle men" who are not adding real value to the world out of that system..and to get the banks back on track for what they are legislated to do for and by us.
My concern is that while this is being correced we will have an overreaction and their will be a huge liquidity crisis..hurting solid worthwile companies and endeavors to the detriment of us all...I guess in a nutshell its purging the global financial system of excessive greed!..IMO>
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