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 : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: philv who wrote (6863)	2/3/2004 4:05:47 PM
From: mishedlo	Respond to of 110194

Japan's Growth Won't Be Enough to Curb Deflation, OECD Says Japan's economic growth isn't strong enough to stop the slide in the nation's consumer prices, the Organization for Economic Cooperation and Development said. ``Our outlook is for steady recovery -- not brilliant -- and not strong enough to bring deflation to an end,'' Randall Jones, head of the organization's Japan desk, told an audience in Washington by videoconference from its Paris headquarters. Growth for Japan, the world's second biggest economy, is forecast to reach about 1.8 percent in 2004 and again in 2005, the organization said in its biennial economic review of Japan. Most of the boost would come from exports to China, said the organization, whose 30 member countries include the U.S. and UK. More than five years of falling prices, a legacy of the 1980s asset-price bubble, have sapped Japan's economy by cutting corporate profits and inflating the value of debt. The Bank of Japan has kept interest rates at zero since March 2001 in an effort to end deflation. Japan's core consumer prices, which exclude fresh foods and are used by the central make to measure deflation, were unchanged in December and fell 0.3 percent in 2003, the government said last week. ``It's seems to be a trap they've fallen into and can't get out of,'' Jones said. ``It's a drag on growth.'' Falling prices also keep the rate of default on bank loans at a high level, limiting the effectiveness of monetary policy to curb deflation, the report said. The review said that Japan should work to restore its banking system at the same time it tries to end deflation. The government should reduce the major banks' stock of non- performing loans by half to about 4 percent of total lending by March 2005, the report said. The Bank of Japan should also purchase foreign assets as a strategy to make more yen available and increase the money supply, it said. A rising yen threatens to dent the recovery from a third recession in 12 years by crimping overseas sales of companies such as Canon Inc., which accounted for two-thirds of economic growth in the third quarter. Japan sold a record 20.1 trillion yen ($189 billion) last year, as it sought to slow the yen's 11 percent gain against the dollar. ``We can see why it's important for the exchange rate to not appreciate,'' Jones said. Still, ``in the longer run, these policies are not effective.'' Debt levels at 150 percent of gross domestic product also remain a concern, Jones said. Japan may find it hard to reduce government spending because it accounts for 38 percent of GDP, low for industrialized nations. The increase in Japan's aging population has helped pushed spending up, he said. The report recommended that Japan increase competition by removing barriers to trade, attract more foreign direct investment and deregulate its energy and telecommunications industries to make prices more competitive. quote.bloomberg.com ============================================================= This is where we are headed IMO Mish

To: philv who wrote (6863)	2/3/2004 6:12:11 PM
From: Haim R. Branisteanu	Respond to of 110194

You are correct on free Medicare, dental etc. But that is not the ECB it is the government of the various EZ countries. For some reason several people on this board mix the ECB and other EZ CB's and the various governments. My complain is against the ECB members and their cohorts. They let the EUR fall from 1.19 to 0.82 to the USD with little care for those depending on fix income as inflation rose and jobs evaporated. Now they do the same little care for jobs and jobs are again evaporating. No business can survive if the volatility in EUR/USD continue with swings in excess of 2% within 24 to 48 hours. Have clients who transact business between EZ and the US and they are hurting from those wild swings. IMHO it is also the responsibility of CB's to smooth out wild FX swings similar to those we see recently. ECB stubbornly does not do that and as such destroy many businesses If many complain rightfully about AG et-al then looking at the CB's across the Atlantic AG is a superstar. Hope I made myself clear