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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Rational who wrote (223)	12/28/1997 8:07:00 PM
From: Zeev Hed	Respond to of 9980

Sankar, I happen to be a proponent of BOJ printing yens, but that has to be coupled with relaxation of trade barriers (yes they still exists). I do not say keep printing does yen for a year or so, I think they should provide a bolus of liquidity at the consumer level, just to prime their economy, with a relatively small injection (not even 1% of their GDP) over a short period of time, they can change the direction. It would, of course help if they get their baks in a position to provide some lubricating liquidity to their economy as well, particularly the area of lending to smaller entreprises. In the last 50 years, Japan has managed to put on the world map just one major company, Sony, all the rest are still within the same pre WWII Kuratsu. They need new corporate blood, like our Medtronics, INTC, MSFT, AMAT LRCX (barely 15 years and already on the world map) and few hundred others that were not around 30 years ago. However, the current financial system prevent them from nurturing such companies. Zeev

To: Rational who wrote (223)	12/28/1997 9:05:00 PM
From: Tommaso	Respond to of 9980

Sankar, Wouldn't a Japanese inflation actually hurt the United States? With the yen declining, Japanese exports would increase even more. Keeping the yen high may maintain Japanese sense of dignity, somewhat as keeping the pound high did for the British in the 1920s. What do you think of the Japanese protectionism with regard to their agriculture? They could import rice much more cheaply from the United States--isn't that true? I can understand how they want to remain self-sufficient for food, but if they would allow free imports of food all the Japanese could eat much more cheaply. Or so I understand. Maybe I am out of date on that one. To the extent that I am aware of harboring a prejudice against the peoples of another country, I think it would be the Saudis, who simply happen to be sitting on top of an ocean of oil. As you say, the Japanese are caught in a sandwich. How do they get out?

To: Rational who wrote (223)	12/29/1997 12:51:00 AM
From: Shoe	Read Replies (1) \| Respond to of 9980

Sankar, Japan's interest rates are so low already that monetary policy is of limited utility. The prescription for a liquidity trap is fiscal stimulus, and it is particularly appropriate where excess saving would otherwise keep demand too depressed for the economy to recover to full employment equilibrium. "Rational expectations" theorists notwithstanding, experience shows that in large enough doses fiscal stimulus can have substantial impact on an economy with considerable slack (as in the U.S. in the 1980s), and for Japan a 3.5% unemployment rate means that slack exists. Japan's tax increase this year was macroeconomic folly, and with all of Asia on the brink it is not the time to be timid with tax cuts or public works spending, IMHO. If Japan does not serve as the regional locomotive, it will not be primarily Americans who suffer! -- Shoe