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To: Abner Hosmer who wrote (5574)	1/10/1998 4:35:00 PM
From: philv	Read Replies (2) \| Respond to of 116753

Thomas Becker: Re: Japanese excessive liquidity Japan is being counselled to further inflate their domestic market. Clearly, as you have stated, their bank rate is .5%, and lowering of interest rates is no longer possible unless they start to pay borrowers! So Japan has lowered income taxes, to try to get their consumers to spend more yen. Their options are limited, but what they can do is print money by increasing debt. But the problem with that is there is altogher far too much debt already. It is the debt that is precipitating the Asian crisis. Debt that was brought on by governments and their Central Banks monetary and fiscal policy, which their corporations eagerly embrassed. Japan has paid a big price for their previous unrealistic economic expansion, and the other countries in the region are now paying that price as well. Equity markets have tanked, and their currencies devalued. Currency devaluations and lowering interest rates are both inflationary moves to try to counteract the obvious massive deflation which is occuring. These can work provided that other economies (US and Europe) do not also become affected and embark on the same path. The result would be competitive deflations and a world-wide depression. Japan is not without means due to their emmense holding of foreign reserves. It will be interesting to see if they are forced to liquidate some of these, and what effect that will have on the U.S. I nominate the C.B. and IMF jugglers with a GOLD medal if they can keep this thing going for another year without dropping the can! Phil

To: Abner Hosmer who wrote (5574)	1/11/1998 12:43:00 AM
From: Richnorth	Read Replies (1) \| Respond to of 116753

Tom, Thanks for your interpretation. Maybe I am being overly biased. But I am still unconvinced. I still believe more evidence is required. Maybe time will tell for sure. During my sojourn in S.E. Asia, I became acquainted with the history of the British Empire which is essentially a history of colonialism. From my readings of statecraft from Plato to Confucius to Machiavelli to Marx to Metternich to Disraeli to Rhodes to Churchill to Stalin to General Tojo to Truman and Eisenhower to Ben Gurion and Golda Meir to "I-am-not-a-crook" Nixon to Kruschev and Chairman Mao to President Clinton etc. & etc, it is obvious that political intrigues, plots and counterplots and espionage occur all the time beneath a facade of mutual friendly relations, cordiality and cooperation. From the British colonial masters and others, many a student of political science has learnt that, more often not, important and far-reaching matters of statecraft often began from innocent-looking happenstances or by-the-way circumstances or so it seemed then. So why would I think about the possibility of the West attempting to gain ascendancy, even in the post-colonial era? Well, as in the past, so in the present. History often doth repeat itself! And those who ignore history are often condemed/destined to repeat it! Not too long ago, a number of business concerns were barred from foreigners. But no longer! In the recent S.E. Asian financial crisis, the IMF has stipulated that foreigners should be allowed to buy into or own some local businesses to which they were formerly denied. Thanks to foreign loans, the westerners, at long last, have been enabled to gain a foothold in the local markets! (This is number one, and the fun has just begun?) A by-the-way happenstance? Well, time will tell. BTW, a rather crude South Indian proverb has this to say about the impossibility of keeping a secret hidden completely forever. "Even if you fart under water (and the pungent odour is scrubbed by the water and thereby rendered imperceptible), others can still see the bubbles." Sorry, didn't mean to be a name-dropper! Best regards, Richnorth