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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: Ahda who wrote (7267)	8/19/1999 11:13:00 PM
From: Hawkmoon	Read Replies (2) \| Respond to of 81220

Well, I guess one has to decide whether the Nikkei is overvalued or not. If their primary source of revenues and earnings remain solely from being an export based economy, this rally will not last long. And a cheaper dollar only makes US good more competitive against theirs. And actually, many perceive that the Asian crisis was mainly caused by being overleveraged in dollar denominated debt instruments and possessing inadequate reserves of foreign currencies with which to defend their own. Add to that the lack of transparency, and the overabundance of non-performing loans (Thailand reportedly has 89% of it total loans in this category), combined with a lack of property rights for foreign investors, and you have the recipe for a massive capital flight, which is just what happened. And the Japanese fall in this same situation where the majority of their loan portfolios are non-performing, they don't pay any interest to depositors, and they practically pay people to borrow money from their banks. Yet the Nikkei is trading at nearly 1/2 of its previous highs. Call me crazy, but Japan's problems are not nearly over. One thing I find interesting is that if money is being repatrioted back to Japan and put in cash there must be full knowledge that their need to induce controlled inflation in that economy, as well as the need to monetize their debt will only lessen the value of their cash holdings. It could just be that they know they can't convince foreigners to finance their enourmous debt (and need to issue more), thus are spiriting the financial resources back to Japan to enable them to do it themselves. After all, would you feel comfortable only being paid .25% tops on your deposits?? Regards, Ron