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Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (3219)	1/11/2002 3:43:04 PM
From: Henry Volquardsen	Respond to of 3536

interesting article. there are a few minor things I disagree with but there is a lot more I agree with in that article. re the 'deal' that may be arranged between the US and Japan, it sounds credible and not at all surprising. And I understand the authors concern about the impact on the competitors. But I would argue that it is probably the best course. The brutal reality is, as the author points out, the Japanese economy is in incredibly bad shape and deteriorating rapidly. I've turned this around in my head for a long time and talked it through with others familiar with the situation and see no way out from under their mountain of debt and bad assets other than a massive repudiation of that debt through either an outright default or a massive inflation coupled with a major decline in the yen. If nothing happens soon to rescue their economy then this collapse could be right around the corner. A 10-20% decline in the yen could give Japan enough breathing room to muddle through for a year or two and delay the day of reckoning for awhile. In light of that a negotiated 10-20% decline is a best case, in the short term, imo. Btw if they are negotiating such a decline I don't think we would need to get them to agree to buy US Treasuries. Considering the alternatives it will be tough to stop then.