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To: Elroy Jetson who wrote (90963)	9/30/2007 6:53:26 PM
From: Perspective	Respond to of 306849

Should have added to my last post: it shows that inflation per se is not bad for stocks, and not even high nominal interest rates. Stocks can go up with Fed Funds at 10%, if inflation is running 15%. With real short-term rates as low as they are, I'm losing my faith that stocks, as represented by the major averages, will come down any time soon. Only select sectors that get squeezed by the dollar weakness will suffer in the early days of the recession. BC

To: Elroy Jetson who wrote (90963)	9/30/2007 7:04:57 PM
From: RockyBalboa	Read Replies (1) \| Respond to of 306849

Thanks, while I agree that it was likely less pleasant for japanese folks: zero savings interest rates (partly offset by profitable carry trades) persistent deflation (still a necessary process given the exorbitant price levels anno 1990) *lacklustre stock markets, and ongoing yen devaluation it was a great help for other nations. The excess liquidity unusable at home, was exported mainly to Europe where the Yen became a great borrowing currency, so the constant supply was useful for the world economy. It lowered the effective rates a company and then consumers faced when monetary conditions were otherwise tight. To some part, Japan exported their previously created wealth...thus equalising previously distorted purchasing power relationships.