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To: ahhaha who wrote (43814)	10/25/1999 11:07:00 PM
From: Hawkmoon	Read Replies (2) \| Respond to of 116759

You need demand orientation and then attempt a lowering of rates which doesn't cause money supply to rise. Of course you do... And that one of the primary reasons that Japan is in the current state that it is. The Japanese WERE consumers (although maybe not as great as we Americans). Most of remember the quantity of Japanese who spent their time and money vacationing here in the US as well as buying up our property (because theirs was so overvalued). The Japanese spent and invested and saved. But that invested in the wrong things like real estate, in the mistaken belief that the good times would never end. However, that all came to a shattering end when their market crashed 10 years ago and real estate values plummeted. The Japanese became even more aggressive savers, refusing to spend at the levels they had before, creating price deflation, exacerbated by their attempts to export their way out of recession. They incrementally lowered rates in half measures in hopes of stimulating demand. And they incrementally stimulated again with the same doomed results. And now they can't stimulate anymore except by outright printing of yen in order to force some of that $12 Trillion in savings to be spent and put to work, or face devaluation. Now I believe I understand the term liquidity trap, Ahhaha... Yes, Japan is an exporting nation, but they are an importing nation as well, primarily in commodities that they manufacture into finished goods for export. They have few natural resources as you well know. I hope you your true beliefs towards the Japanese are not as sterotypical as they sound. It's tough to create demand when people are worried about losing their jobs on a massive scale. And that other shoe has yet to fall throughout most of corporate Japan, but Nissan was certainly the opening shot. Regards, Ron