To: Rmn who wrote (11511 ) 12/14/1997 11:28:00 PM From: Zeev Hed Respond to
Ramsey, sorry for delay in response, I had few other letters to get out so I had to get off the net. I do not think that either Japan nor Korea are going to opt long term for inflationary solutions, that will not solve their problems. Both have massive debt write off before them and they will just have to face it as we did. Japan has been trying to delay the write off decision, just for pure "honor" reasons, a deeply engrained societal element, but this delay has reduced their growth rate and mired their economy in a lengthy slow down and a bear market that is coming to its tenth aniversary soon. I hope Korea will learn from that and as the Malaysian prime minister said, amputate the gangrenic limb and let the body live. If they let some of the more leveraged giant go under, it will reduce the over capacity, and they can start anew. They will have to put in place some meaningful programs to deal with the resulting unemployment, but id they take the bitter pill now, in five years they will be abck on their feet and smarter for it. If they patch over the problems, then they may drag Japan with them down the drain, and with Japan spiraling down, all of us may go through hard times. I edoubt that will happen however, but we will se what the BOJ and prime minister of Japan have to say Dec 16.
