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To: ahhaha who wrote (13030)	6/13/1998 5:28:00 AM
From: paul ross	Respond to of 116796

If the BOJ reinflates and solves Asia's problems, do you feel this will coincide with the top in the US$ all us G-bugs have been so anxiously waiting for.( Seems kind of anomolous that an increase in the Japan. money supply could increase it's value vs US$) Following chart shows that from 90 thru 94 M3 grew at less than a 2% annual rate, which would closely relate to our low CPI rates of the last few years. Since 95 M3 has grown at increasingly greater rate, until the 9% of last year, and over 10% for the first half of this year. It used to be said that an increase in M3 would translate into a higher CPI in from 6 mos. to 2 years, can we expect a rise in CPI any time soon? bos.business.uab.edu

To: ahhaha who wrote (13030)	6/14/1998 1:46:00 AM
From: PaulM	Read Replies (1) \| Respond to of 116796

Ive been "hornswaggled by Japanese manipulations and the...Press" Ahhaha, given a fractional reserve system, I do think it causes an obvious problem when Japanese banks loan to the legal limit using real estate and stock reserve bases (in the 80's) that are subsequently valued at many trillions less (in the 90's). It implies many times many trillions worth of loans have to be called back, or that money creation goes into overdrive, or that massive public bailouts are resorted to, or all three. And that is a problem if your a borrower, or a yen holder, or tax payer, or all three. "Just where is the world's wealth hiding?" Ahhaha, could it be that much of the wealth never existed? The fact real estate around the emperor's palace is valued at more than all of North America, doesn't mean the valuation reflects fundamentals. The question isn't how productive the Japanese are. The question is how distorted was their view of that production. And what are the implications of eliminating those distortions Apart from that, I do agree the Japanese CB and govt insitutioions do own lots of U.S. assets, which apparently aren't selling for political reasons. "If the BOJ started pumping" Ahhaha, Japanese bank lending rate is .5%. Public funds are buying the stock market. A stimulus package is passed every three years. Japan has run huge deficits in the 90's. What would you consider pumping? "There is no real economy impact" Ahhaha, aside from war, natural disaster and rioting, there's never any real economy impact. The Great Depression--triggered by a plunge in the stock market--had no real economy impact. EXCEPT, that in order for the economy to become healthy again real growth must slow as real capital reallocated, this time based on reality. "That was solved by Keynes in the 40's" Ahhaha, that was solved by WWII in the 40's. Nothing the govt does has any real conomic impact. Transferring wealth fron one group to another has no real economic impact. Buying something that the market otherwise wouldn't want--stimulating demand--has no real economic impact. Only you and I impact the real economy--by producing. What the Keysian solutiuon does do is allocate resources poltically, rather than basd on supply and demand. And in the long run, that does impact the real economy (to its detriment). "In any case, debt isn't budensome" Ahhaha, the question raised isn't whether debt is "burdensome," but whether debt levels imply a misperception of reality (like the Japanese and real estate). U.S. public debt--at $5.5 trillion-- is just one example. Assuming 3.5 people per U.S. household, that works out to over $60,000 per household. The public debt is ultimately paid with tax $. Given the $60,000 overhang, are people's expectations--about future taxes, retirement benefits, the appropriate savings rate, the value of a dollar, a treasury, etc.-- aligned with reality?