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

To: Haim R. Branisteanu who wrote (1494)	5/19/2003 11:47:17 AM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 4907

Japan has the highest debt/GDP ratio among developed countries. but this is a bit misleading since the debt is all owned by Japan. it may be thought of as a US contingent liability, because Japan created its own debt in order to fund their external trade surplus with the US (and by extension our capital acct surplus w/Japan). when (not if) Japan implodes they will start repatriating their USD assets and give up on supporting the dollar. while this will cause deflation in Japan, the US is likely to see severe inflation as Japan liquidates trillions in USD assets. not to mention that Japanese goods will become much more expensive. and remember, when Tokyo sneezes, the rest of Asia catches pneumonia.