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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: tekgk who wrote (8764)	11/20/1997 9:38:00 PM
From: Rational	Read Replies (2) \| Respond to of 18056

I am not expecting a demise of Japan or the US or their economies. Neither have I expressed so. These are two pillars of the world. We are just contemplating on the values of parameters at which there may be some transient equilibrium. The Japanese government has fixed 1.5% rate to help Japanese banks. That did not help. They are now going to infuse public funds. That may not help. They may then cut taxes. All these may result in new levels of interest rate, stock prices, efficiency, and economic growth. Japanese trade surplus is a good thing for the US, IMO. It shows that the US can get cheaper products and the Japanese can produce the same quality at a lower cost. The Japanese use the surplus to invest in the US Treas (which is good for taxpayers because the US Govt can borrow at lower rates) or in the US stock market which helps the companies and shareholders. It is thus in the interest of everyone here to maintain this part of the equation, but with the artificial macro controls removed. Sankar