Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : World Outlook -- Ignore unavailable to you. Want to Upgrade?

To: Julius Wong who wrote (1723)	4/14/2003 9:30:05 PM
From: Don Green	Read Replies (2) \| Respond to of 49446

JW > That Weaken Dollar May Boost World Economy I really can't see how the dollar can remain weak when you consider all of the other countries are as bad off or worse off than is the U.S. .. Don

To: Julius Wong who wrote (1723)	4/29/2003 3:52:10 PM
From: Don Green	Read Replies (1) \| Respond to of 49446

Weaker yen may help Japan deflation fight-Stiglitz TOKYO, April 14 (Reuters) - Japan could weaken its currency and start printing more money as part of its attempts to beat deflation, former World Bank chief economist Joseph Stiglitz said on Monday. Stiglitz, a professor at Columbia University in New York, added that there was no panacea for Japan's collection of economic ailments, and what he was offering was one "conservative" solution. "Devaluations are good for an economy when you are trying to stop deflation," Stiglitz told a Tokyo symposium. "Devaluation would not affect Japan's balance sheet because Japan is a creditor nation. And the normal trade benefits from devaluation would still apply." Deflation has bedevilled the Japanese economy for over four years, crimping corporate profits and worsening the pile of bad loans at the country's banks by increasing the amount of the debt in real terms. Although the government has declared the fight against deflation to be its main priority, it has yet to come up with an effective policy, while theories abound about what should be done, put forward by politicians, economists and academics. The idea of weakening the yen has come up before, with its proponents arguing it would stimulate Japan's exports, one of the strongest parts of the economy. But the government is cautious because of the likelihood that it would irritate the United States and its exporters. Stiglitz said the Japanese government could stimulate domestic demand by printing money, in a form similar to U.S. treasury paper. The paper would be bought by domestic investors, giving the government cash to spend on boosting the economy, while not increasing the government's already huge debt burden. He said the government should be cautious about focusing solely on trying to force a clean up of banks' balance sheets and the disposal of bad loans. "Attempts to clean up the banks can lead to reduced credit supply," he said. Given that reduced bank lending is currently hurting even healthy Japanese companies, a forced clean-up of the banks could actually worsen the situation, he said. Japan's Economics and Finance Minister Heizo Takenaka has focused on cleaning up banks through policies that impose special inspections and new accounting rules on them.