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To: ahhaha who wrote (43443)	10/21/1999 9:12:00 AM
From: Hawkmoon	Read Replies (3) \| Respond to of 116762

(ps. You and a bunch of others on this thread are the best thinkers available in the world today. You've made many good posts) Well, I tell what ahhaha... I stand very humbled by your response to my theory that Japan must "monetize" its debt and devalue it currency. I have to admit that your theory and logic are very strong and certainly more detailed than my own. The heart of the problem is how to create demand in that economy, rather than thrift. I'm certainly not a racist towards the Japanese, but merely commenting on what is an apparent apathy towards consumption. There is no doubt that there exists considerable fear of massive layoffs in Japan going forward and until such restructuring is completed by the largest corporations, I can't see how consumer confidence there can increase until majority of layoffs have ended and people feel secure in their jobs once again. Furthermore, with such huge accumulated budget deficits, certainly higher than the US with regard to per capita debt, it is clear that extreme fiscal stimulus is necesary, yet truly impossible without creating such a debtload that Japan will remain forever "in hock" and with a high tax burden required to pay that debt off. In fact, they may already be at this point. So the alternative seems to be monetize debt by devaluing the Yen (certainly feasible from this position of strength), which also should spur continued ability to export goods and keep more people employed (which hopefully builds consumer confidence). So maybe my logic may be wrong here.. But I believe I understand why you believe any devaluation would only cause the yen to strengthen, and I would agree with one caveat. I believe the yen would initially weaken drastically, or if done properly in one fell swoop investors wouldn't have the chance to react, and thus the market would assume the damage was now done and the yen could strengthen from there. It seems to be either this or it is merely like Harry Dent states (I've been reading/re-reading some of his books lately), a matter of waiting until Japan's next demographic upcycle occurs towards 2008-9 (which will coincide with what he expects will be the US peak). I do appreciate you logic... It certainly provides a challenging premise to contemplate. Btw, I think the media is following me... as I seldom follow the media's point of view.. :0) And few folks in the media are talking about full monetization of Japanese debt or currency devaluation like the US enacted in 1933 to get out of our liquidity trap. Regards, Ron