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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: PaperChase who wrote (64686)	7/16/1999 9:36:00 AM
From: Mike M2	Read Replies (2) \| Respond to of 132070

PC, if central banks are so omnipotent why does the Japanese market fail to respond to monetary stimulus. Why did they fail in the US in the 30's?. pushing on a string is the answer. Central banks can increase the banking systems ability to make loans but there must also be demand for loans. A bubble distorts the demand and output structure of the economy. Japan over-invested in industrial plant and equipment and real estate - there is little interest in borrowing money to do more of the same. Currently in the U.S. over optimism is leading to over indebtedness when the bubble bursts our over indebted economy will not respond to easy money but we are having a big party now. Mike