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To: Alex who wrote (5218)	1/4/1998 4:42:00 PM
From: Terry Rose	Read Replies (3) \| Respond to of 116753

Alex. Once again you have provided us with an instructive link. Here's what I got from the article. The currency crisis in these Asian countries surprised their inhabitants by the speed of the decline and the amount of peripheral damage from the currency decline. They did not see it coming due to the mania of the good times beforehand. Credit was easy and the good times were rolling, and then poof day had turned to night. Speaking of easy credit, if I get another application for a preapproved credit card, I will scream. Have you noticed the latest commercial with Dan Marino where you can get 125% of the equity on your home on credit, and they will approve it during the call. Give me a break. When the U.S. has it's own liquidity crisis due to all this debt, I plan to do some bargain shopping at the resulting nationwide garage sale. Until then I plan to remain in gold assets to protect my working capital from either inflation or deflation. In the last issue of the Wall Street Journal, there was an interesting poll of some 30 economists.Only one of them predicted that the 30 year Treasury Bond yield would be below 6% at the end of 1997 from their predictions made in mid 1997. As far as the end of 1998, they mostly predict the yield will remain below 6%. Based on their track record it looks like 7% is a lock. Their predictions on the dollar yen ratio are all over the map. I primarily subscribe to this periodical to get contrary indicators, and trade from them. I get the feeling that they think that the Asia crises is in the mopping up stage, and that it was a temporary setback. Or as our fearless leader said "a glitch in the road". We will soon see.

To: Alex who wrote (5218)	1/4/1998 6:24:00 PM
From: Ron Wilkinson	Respond to of 116753

Alex, having lived in asia a few years, I too have some insight into the "Asian Problem". Mr Gale's assessment that these problems were known before the crisis is valid in my opinion but his conclusion that a lack of "political will" as the fault doesn't go far enought in stating its cause. The asian personality does not lend itself to personal confrontation. It would be an unthinkable embarrassment and insult to accuse another of collusion with criminals, unwise risk taking, or putting greed ahead of the common/national best interest. That is also the reason why the mending of the problems will take longer than most predict. Initially, the countries will mostly do what the IMF makes them do to get their money guarantees. All other things to be fixed will be just like negotiating a trade agreement with the Japanese. It will take forever. Regards, Ron

To: Alex who wrote (5218)	1/4/1998 7:39:00 PM
From: lorne	Read Replies (3) \| Respond to of 116753

Hi Alex , You think this kind of thing could spread. Monday January 5, 1998 Pressure on Jakarta to defy IMF on cuts By LOUISE WILLIAMS, Herald Correspondent in Jakarta The Indonesian Government is under strong internal pressure to breach International Monetary Fund (IMF) austerity conditions in this week's national Budget as the deepening economic crisis forces massive lay-offs and spiralling inflation. The armed forces and the two largest political parties have called on the Soeharto Government to increase spending in tomorrow's Budget, a move which would put Indonesia in breach of the conditions of the country's IMF-led $US38 million ($58 million) bail-out. Jakarta is expected to deliver a tough Budget, cutting government spending and freezing public sector pay, but big reductions in government earnings from corporate taxes and a huge increase in debt-servicing costs following the depreciation of the rupiah will make it difficult to fulfil the IMF's demand for a surplus budget. With economic growth closely linked to government spending, the armed forces, the ruling Golkar party and the opposition United Development Party have urged President Soeharto to boost spending by up to 10 per cent to cushion the impact of the crisis. Two million people have already been laid off, and the armed forces warned last week of destabilisation as more unemployed pour into the streets. Sri Mulyani, an economist at the University of Indonesia, said an austerity Budget would further contract the shattered economy, which has seen over 60 per cent wiped off the rupiah and more than 40 per cent off the stock-market since mid-1997. Didi Rachbini, director of the Institute for Development of Economics and Finance, said the Soeharto Government "should not feel obliged" to meet the IMF conditions, which include a Budget in surplus by 1 per cent of GDP, about $US750 million. Economist say a harsh budget may produce recession, a forecast backed up by the US ratings agency Standard and Poor's, which said Indonesia could expect a 5 per cent fall in GDP for 1998. The price of rice in Jakarta rose by 9 per cent last week and cooking oil and onions jumped by 64 per cent. The IMF package has failed to stabilise the economy, and confidence remains low due to fears over Mr Soeharto's health and the absence of any clear political successor