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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Ahda who wrote (79835)	12/8/2001 11:49:07 AM
From: long-gone	Read Replies (1) \| Respond to of 116753

That's a great part of the real reason gold does no better in current times, Americans are being told hourly, "Saving is EVIL".

To: Ahda who wrote (79835)	12/11/2001 7:36:26 AM
From: long-gone	Respond to of 116753

Tuesday December 11, 6:20 am Eastern Time BOJ maverick slams fellow board members (UPDATE: Updates with details, background) By Shinichi Kishima TOKYO, Dec 11 (Reuters) - The Bank of Japan's maverick board member rapped the central bank's conservative decision-making on Wednesday, saying radical action is needed to halt deflation and hoist the economy out of recession. Nobuyuki Nakahara, whose aggressive easing proposals have been voted down at countless Policy Board meetings over the past few years, said the economy was in such dire straits that the BOJ must take unprecedented measures, such as buying foreign bonds or using foreign exchange swaps. Such measures effectively increase the amount of yen in circulation but have been controversial due to the impact on the yen and concerns over turf battle with the Ministry of Finance. He also said that the economy is on the verge of a deflationary spiral. With interest rates already near zero, the BOJ must seek to change the market's expectations on price trends and even use a weaker yen that might result from foreign bond transactions to revive the economy, Nakahara said in the speech. ``The economy is in an extremely tough situation and is likely to have entered the first stage of a deflationary spiral. The current monetary policy stance is only passively reacting to liquidity demand and is insufficient,'' he said. ``Therefore, I think we need to expand our quantitative easing policy through feasible and less problematic measures, and one major option is to buy foreign bonds.'' In a 100-minute-long speech, Nakahara berated the nine-member board's past policy decisions, saying their easing steps had been persistently ``too little, too late.'' The BOJ's so-called ``quantitative easing'' policy, adopted in March, had been proposed by Nakahara a long time ago but shunned as impossible, and his opposition to the BOJ's decision to raise interest rates in August 2000 has proved correct, he added. By playing down unconventional policy steps, even after adopting them, many of his fellow BOJ board members were doing little to enhance the central bank's credibility, he argued. ``Such a behaviour could give the public the impression that the central bank is in self-denial,'' Nakahara said. The need for a radical easing was urgent now, Nakahara said, noting that last week's gross domestic product (GDP) data had confirmed Japan had slid into recession. A drop in exports has depressed output and capital spending, and in turn pushed up unemployment to a record 5.4 percent and made consumers nervous about spending. FOREIGN BOND CONTROVERSY Nakahara, the former chairman of oil refiner Tonen Corp who turned 67 on Tuesday, repeated his challenge to the BOJ board to be bolder. Nakahara said the BOJ should raise its quantitative easing target, expressed as the balance of banks' current account deposits at the BOJ, to 10 trillion yen ($80 billion) from ``above six trillion yen'' and boost it to 12-15 trillion if needed. The BOJ has already been supplying such levels of funds in reality, but to do so within the ``above six trillion'' framework amounted to merely keeping money market interest rates steady and did not have the desired ``announcement effect'', he said. He said a change in the overnight rate to 0.004 percent from 0.002 percent only meant 550 yen difference for a 10 billion yen transaction and had negligible impact on the macro economy. As one way of boosting liquidity supply to the yen money market, the BOJ should buy foreign bonds, he added. If the BOJ were to print more yen and exchange it for dollars to buy U.S. Treasuries in the market, for instance, the transaction would be a transfer of yen funds to the private sector from the public sector and have a monetary easing effect. But at the same time, that would likely have a direct impact on the currency market -- something that does not go down well with the Ministry of Finance, which has the jurisdiction over Japan's foreign exchange policy. Nakahara said monthly foreign bond purchases of 200 billion yen would be a drop in the ocean for the foreign exchange market and would not be regarded as currency intervention. He also said Japan should take advantage of any yen weakness resulting from monetary easing, given its economic recovery was likely to be export-driven, judging from bleak domestic factors. However, Nakahara said he was opposed to even more radical ideas that have come up such as buying stocks or real estate. He said such assets were not standardised and liquid instruments suited for a central bank. ($1=125.96 Yen) (Additional reporting by Tamawa Kadoya) biz.yahoo.com