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: Lee who wrote (3961)	5/28/1998 11:24:00 PM
From: Mark Myword	Read Replies (1) \| Respond to of 9980

>>> To think we can solve the global economic crisis through consumption causes Japan Inc execs glee. A solution? Perhaps Japan Inc planned this long ago, keep building and building, don't worry about profits. <<< Lee - I'm afraid you're failing to realize one very important fundamental point, which is that economies are demand driven. If the U.S. were to suddenly stop importing from Japan , they would be flat on their ass in no time. A basket case - in spades. One of their major problems , along with corruption , phony accounting , political inertia , etc. is that they built way too much UNNEEDED production capacity , which is now crippling their economy. There is no demand for what they can produce, so they wind up with many companies burdened with huge debt levels that they can't repay. It is only because their interest rates are extremely low , and they keep rolling over the debt , that they are able to keep their banks "solvent". Ask yourself - why is Japan , with their supposedly "superior economic model " and their vaunted savings rate , in such a mess right now , and we are just cruising along ? I really don't think there is much glee in Tokyo right now , just a lot of confusion , and a lot of people waking up to the fact that what they thought was so wonderful is now evidently a pile of over-valued assets and an economy that desperately needs the U.S. consumption in order to stay afloat. When it comes to toppling , Japan is ten times more vulnerable than we. The Nikkei would be in the toilet right now if it weren't for the government propping it up , and so would the banks. The only solution for Japan is to keep exports up and print lots of money to provide liquidity for all those "savers" who are scrambling to get their cash out of the (just-recently-downgraded) banks.