Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Frodo Baxter who wrote (3633)	5/16/1998 5:53:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 9980

Larry, it is a "confidence" game, as long as there is confidence in the green back we export, things are fine, but just get a run on one of our major banks, and that export will come back as a torrent. And yes, the Japanese have a huge cache of cash, real hard cash earning pittance (including a very big chunk of our debt, the only saving that earns them a fair return). But as I said, it is a game of confidence, and printing money or reducing taxes is not enough, they have to lower their internal costs structure (their distribution must be the costliest in the world) and use normal advertising to increase consumer's confidence. As it is now, any tax savings are going to go into mattresses, and they need it to get into the economy so they can soak some of that excess production capacity with increased final demand. Kenesyan fiscal stimulus is not a bad ideas (unfortunately, they have lost the flexibility of using monetary stimulus), but it should be coupled with "crass" confidence building advertising campaign. Repeat often enough that everything will be alright and the masses will believe it. Scare them with potential "falling off the cliff" scenario and money will be soaked from the economy and find its way into the mattresses. Zeev

To: Frodo Baxter who wrote (3633)	5/16/1998 7:04:00 PM
From: MikeM54321	Read Replies (1) \| Respond to of 9980

Zeev writes: >They are the only one in that region that have the money statched away to do it.< Lawrence writes: >You'll have to help me out on this. Has all this discretionary money effectively taken out of circulation been locked up in savings accounts or in mattresses? If the former, net outflow out of "asset-free" banks is a tad, um, disturbing.< Lawrence, I believe I understand what you are saying. But in my opinion, consumer stimulus is an excellent idea. The net outflow in April was $23 billion. The average Japanese family has $100,000 in savings. This adds up to, I believe, something like $5 trillion! So even though the outflow ($23 Billion) may seem large, compared to how much the Japanese have saved ($5 Trillion) it is not. So if only the government COULD get the Japanese to spend some of this savings, it would be a remarkable stimulus. But there is no way this is going to happen (IMHO). I have to agree with Zeev. They are all scared. I can't blame them from the perspective of being in an eight year recession. As a matter of fact home safe sales have gone up recently and some attribute it to the Japanese saver being afraid of bank failures. MikeM(From Florida)