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To: Ramsey Su who wrote (12274)	7/12/1998 10:54:00 PM
From: Valueman	Read Replies (4) \| Respond to of 152472

The sky is falling!!! The sky is falling!!! The sky is......??? Wait a sec.....is that Nikkei index down .1%? Damn--Ramsey had me in the fallout shelter sitting atop my stash of gold coins. Now what am I going to do?

To: Ramsey Su who wrote (12274)	7/13/1998 9:37:00 AM
From: Jeff Vayda	Respond to of 152472

Ramsy Su; I missed the <gg> at the end of your post. (I hope!) This is an example of the type of stuff that will eventually cure the Asian contagion. Ramsey TOKYO (Nikkei)-The Bank of Japan will introduce a system of providing yen loans to other central banks, mainly in Asian countries, using as collateral Japanese government bonds held by those institutions, BOJ sources said. The move is primarily designed to help other Asian countries ease liquidity problems and stabilize their financial systems. It is also aimed at promoting internationalization of the Japanese currency, the sources said. The system envisages a formula under which a foreign central bank would sell its Japanese government bonds to the BOJ under a repurchase agreement, in exchange for which the BOJ would loan yen to that central bank using the bonds as collateral... This looks like getting brain cancer to cure kidney failure! Is this the world's largest pyramid scheme ever? I (various Asian country banks) originally buy BOJ bonds, which are ultimately backed by the strength of the Japanese economy - read the excessive savings rate of its people supplying cheap steady capital to its banks. (There just isnt that much to buy and with the government imposed mentality of 'saving'...) The economy is built up on a system of everyone loaning money to everyone else, regardless of the worth of the underlying business. Your nice easy Japanese credit builds businesses in my country. I see all this building going on and jump on the bandwagon and sell bonds to finance my own growth. Oh, by the way BOJ is the major capital supplier in the region, nice of them turn right around and send my money back. (It is important that my people see that we can keep up with the Jones-a-sans, and what the heck, I can skim some off the top also) Finally borrowing from Peter to pay Paul comes due. Too much money is tied up running back and forth and not enough is put towards actually building or buying anything. So what is the grand solution the parties in power come up with? The BOJ will buy back the bonds I bought (giving me increased liquidity) AND loan me money based on the bonds it just bought back!! BOJ takes money from its savers to loan more money to its croanies! Tax the savers! Print more money! I dont think the sky is falling, it just looks that way. People are scrambling to stay on top of all the money being printed! Yen will be stronger, the world markets will take it as a good sign that the common Japanese voter is waking up and voting the bums out. (Ramsey, as a follower of the east, do you appreciate the gravity of the people not blindly going along with their leaders?) Looks like an interesting geopolitical month on tap. Jeff Vayda