To: Jim Bishop who wrote (82029 ) 3/16/2001 9:15:19 PM From: CIMA Respond to of 150070 * Greenspan: Stuck Between Japan and a Hard Place stratfor.com -> ON OUR WEBSITE TODAY FOR MEMBERS ONLY: * Chinese Fiber-Optics Sales to Iraq Challenging U.S. Foreign Political Objectives stratfor.com * European Agriculture Facing Massive Reorganization stratfor.com * Hijacking Reveals Chechen Rebels' Determination stratfor.com ___________________________________________________________________ Visit The Christian Science Monitor's award-winning website for world renowned National and International news, and Subscribe to our FREE e-mail edition. The Monitor has won six Pulitzer Prizes and is known for its objective, in-depth news coverage, with a worldwide reputation for accuracy, integrity and compassion.csmonitor.com ___________________________________________________________________ Analysis Investors fear that the U.S. markets, which are at cycle lows, have a long way to go before bottoming out. If the economy is not in a recession, it is doing a good impression of one. The Federal Reserve, which has received much criticism for not cutting interest rates faster, seems prepared to let this continue. Federal Reserve Chairman Alan Greenspan is trying to space the cuts out as widely as he can; more widely than investors and financial analysts think is necessary to jumpstart the economy. To many, this makes no sense. But considered in terms of Japan - the world's second largest economy - Greenspan's strategy adds up: Another round of serious interest rate cuts might break apart the Japanese banking system. Greenspan sees that the Japanese economy is near its breaking point. He does not want it to crack and, if it does crack, Greenspan does not want the United States to be the catalyst. Japan's economy is so close to the edge it will not take much to nudge it over. As the United States cuts interest rates, money flows into countries with higher interest rates, weakening the U.S. dollar particularly in relation to European currencies. This makes American exports more competitive with Japanese exports in Europe. Simultaneously, the slowing U.S. economy will cut Japanese exports to the United States. While normally of little significance, a drop in cash flow due to declining exports could be the straw that breaks the camels back. *********** TO READ THE REST OF THIS ARTICLE CLICK HERE *********** stratfor.com ___________________________________________________________________ <<<<<<<<<<<<<< SUBSCRIBE TO BECOME A MEMBER TODAY!>>>>>>>>>>>>>>> STRATFOR introduces new, expanded analysis for readers seeking more insight on the entire range of global affairs. Our new site features more intelligence on more subjects, easier navigation and expanded coverage. stratfor.com <<<<<<<<<<<<<< SUBSCRIBE TO BECOME A MEMBER TODAY!>>>>>>>>>>>>>>> ___________________________________________________________________ CONTACTS AND CUSTOMER SERVICES: STRATFOR 700 Lavaca, Suite 450 Austin, TX 78701 Phone: 512-744-4300 Internet: stratfor.com Email: info@stratfor.com NOTICE: While all e-mail from STRATFOR and its partners includes an opportunity to opt out of future communications, you can edit your information and preferences at any time. If you do not wish to be contacted by STRATFOR, or its approved third parties, regarding value-added benefits, products and services, please follow the instructions to "unsubscribe" provided in all e-mail messages. SIGN-UP: Get the free, daily Global Intelligence Update: stratfor.com You can stop receiving the GIU by clicking on: stratfor.com ADVERTISE: For information on advertising in the GIU or any section of the STRATFOR website, please email us at advertising@stratfor.com ==================================================== (c) 2001 Strategic Forecasting LLC. All rights reserved.