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

To: Zeev Hed who wrote (3438)	5/9/1998 10:31:00 AM
From: Worswick	Read Replies (1) \| Respond to of 9980

Your analysis of the deflationary potential of the current situation is right on Zeev! Keep the thoughts coming. Between times with 450,000 accounts being opened each month in Tokyo by CitiBank... think where this money is going to go? WALL STREET! DERIVATIVES. US BOND FUNDS. Think what $2-$3 trillion into our markets will do when current high end mutual fund cash flows are running $25 billion a month. We are thinking of 10X to 15X the current yearly in flow. In 1929 as the world sank Wall Street sucked in money from the moon. ... the question of the west floating the east is dependent upon, in the end, the Japanese seeking competitive financial returns in a world market in the short term. In the long term when the market is at 16,000 here...you might reasonably expect it to go to 20,000 in a self reinforcing blow off that sucks the liquidity of the world into the US markets, This is all a debate on returns, ends, etc. What do you think my very smart man? My best,

To: Zeev Hed who wrote (3438)	5/10/1998 3:27:00 PM
From: smolejv@gmx.net	Respond to of 9980

>>If they did, there will be a torrent of yen flooding pour markets, a collapse of the yen itself below 150 yen/dollar, << Any hard facts about what's happening to the recently created Nihon liquidity? DJ

To: Zeev Hed who wrote (3438)	5/11/1998 10:57:00 AM
From: Sam	Read Replies (2) \| Respond to of 9980

Zeev, "If Japan does not shoulder its part by opening its markets, then the whole world will be set back for a good five years if not more. The danger that Greenspan is fighting here (and allowing our bubble to grow) is a worldwide deflationary spiral. He is in a very tight box. Our interest rates are already historically high and the FED are already in a restrictive stance (I would say almost 2% excess real interest rates), a more restrictive stance will be calamitous." VERY insightful post. But I wonder if Greenspan and Fed members think of themselves as fighting a "worldwide deflationary spiral". Their rhetoric suggests otherwise, they seem more concerned with inflation in the US, due to increases in wages. Also anecdotal stories about housing prices getting out of control in various places. The imbalances and dislocations caused by the export-driven economic models that the Japanese/Asian countries have adopted will be with us for a long long time to come. At root, that is what has created (as usual) only bad choices ahead for the Fed and other central banks, each of whom have to fight their own battles. Yeah, the export driven models have created huge wealth for a few, and, in Japan certainly, relatively large trickle down wealth for many, but the chickens will come home to roost as we build more and more productive capacity for goods for which there is no market.