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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Mark Adams who wrote (41159)	11/8/2003 5:26:24 PM
From: Seeker of Truth	Respond to of 74559

Hello Mark, Yes absolutely, Japanese savers vastly prefer to invest in Japanese debt. A good friend of mine used to be a Japanese broker and he finally despaired of selling Japanese ordinary consumers any investment outside of Japan, even with enormous disparities of interest rate or P/E as the case might be. I thought that Italy is in the same dire situation as Japan, i.e. there is tremendous public debt almost all lent to Italians. So non-Italians would give Italian bonds a low grade as a credit risk. mb

To: Mark Adams who wrote (41159)	11/8/2003 6:08:33 PM
From: macavity	Read Replies (2) \| Respond to of 74559

One at a time . You are right, I mentioned a lot and perhaps did not explain fully or describe well. I will try again. I will just re-state the two main points of the ramble. i)Credit growth is bad, when it is not market-determined. I.e. when the cost of credit is not determined by market action. ii)Our actions to save/consume, to borrow/invest, are determined by the discount curve of money. The discount curve of money is determined by our actions to save/consume, to borrow/invest. These two statements, to a level are the same thing. If credit growth arrives about because The market moves that way it is a good thing, as it is part of a self-adjusting system. If it is determined by other means then who knows what may happen. ;) The interaction of the supply and demand in your gold/ whisky example is determined by our actions (save/consume assets today) - which we arrive at by the options available to us (borrow/invest in the assets themselves or imlicitly when exchanged into money). If all these options are freely arrived at then any actions will lead to compensating reactions. (I am still not sure that I have explained the above in a lucid manner). -macavity