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Strategies & Market Trends : Heinz Blasnik- Views You Can Use -- Ignore unavailable to you. Want to Upgrade?

To: NOW who wrote (6)	4/9/2003 7:13:18 PM
From: UnBelievable	Respond to of 4905

Think Lack Of Capital Formation and Aging Demographics As is going to be the case in the US going forward. "I have a difficult time reconciling the huge financial problems confronting Japan with the strong sense that Japan fundamentally is a very sound manufacturing base with an incredible workforce and inovative corporations."

To: NOW who wrote (6)	4/16/2003 11:08:09 AM
From: pater tenebrarum	1 Recommendation Read Replies (3) \| Respond to of 4905

well, it is true that SOME sectors of the Japanese economy are thriving...for instance, Japan is indeed a global leader in all things silicon - just as Germany is the global engineering superpower (which wouldn't induce me to praise the 'health' of Germany's economy - the country's economic stats suggest a depression is underway). and i also agree that the price deflation has had many positive effects as well as negative ones (in fact i don't believe the deflation should be 'fought' - that endeavor is precisely what has made things worse). if you have no debt you're of course happy that a glass of beer in Tokyo now costs 40% less than a decade ago. also, housing has become more affordable - when real estate prices are down between 70 - 90% (still too high btw.) anyone wishing to buy a home will be happy too. obviously the same doesn't hold for the purveyors of mortgage credit and their borrowers from a decade+ ago. but with e.g. machine tool orders falling by 43% year-on-year it is pretty daring to say "Japan is only making as if its economy is in a slump - in reality everything's fine". it is also nonsense to say that the stock market slump is of no consequence, or meaningless. the Nikkei is the mirror - it reflects investors perception of Japan's economic reality. and Japan's huge savings are squandered by its bureaucracy - as Shostak points out, when savings end up financing government debt such as is the case in Japan, they will be consumed, instead of being employed in wealth generating activities. the countless bridges to nowhere in Japan are testament to that.