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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: KyrosL who wrote (24658)	10/19/2004 8:05:50 AM
From: Elroy Jetson	Respond to of 306849

Japan is indeed almost the exact opposite of a free market. Japan can be best described as a mercantilist economy. encarta.msn.com While mercantilist economies can set the stage for a later transition to capitalism, this doesn't always happen - Japan being a classic example. A mercantilist system builds up a balance of trade surplus which must eventually find a home overseas. Initially, investing the surplus does not pose a problem. Tools and materials are purchased to improve the domestic productive base. Over time the rate of return on investments at home decline while foreign investments become more attractive. Mercantilist economies have eventually proven to be uniformly incompetent at wisely investing this surplus. Investments made by individuals or individual companies seem to go as badly wrong as investments direct by government directorates. The reasons for this seem to be as diverse as the number of mercantilist economies. Britain invested in colonies, Japan invested in real estate. while many nations never get that far and invest the surplus in disastrous domestic schemes. China is definitely a mercantilist economy at the present time. They are investing their surplus in US Treasury Bonds and Fannie Mae bonds - but then I repeat myself.