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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: cardcounter who wrote (30866)	8/10/1998 7:55:00 PM
From: Broken_Clock	Respond to of 132070

card... your DeRosa dude asks a question at the end of his article which I believe the Japanese already answered last fall. i will try to dig it ip. perhaps he forgot when that happened? >> The key question would be, what will they do with the money? Put it into the Nikkei? Use it to save the banks? Bail out the real estate sector? That's all throwing good money after bad -- or, in the words of the great Peter Lynch, pulling up the flowers and watering the weeds. I don't think so. <<

To: cardcounter who wrote (30866)	8/10/1998 10:11:00 PM
From: Earlie	Read Replies (2) \| Respond to of 132070

Cardcounter: Thanks for printing the article by Derosa. Mr. Derosa's commentary misses the ball on some counts and supports my point of view on the main point. - He endeavours to refute the idea that the Japanese won't sell treasuries. The fact is that they are and have been since last fall. Aside from the Fed's foreign account numbers, the BOJ's own numbers are "net negative" every month of late with respect to U.S. treasury holdings. - He is accurate with respect to the current account surplus. He sees the excess moving into foreign markets, which is exactly where it is going, but more importantly, so is the dough being stripped out of the Japanese banks by anxious Japanese savers. Either he doesn't know about this or he is ignoring it. The article suggests the former. - He actually cites one of the main causes of the currency exodus problem, which is the desire of those who managed to rescue their capital wanting to find a safer abode for it. That is of course exactly what is happening. Derosa asks "What would the Japanese do with the U.S. dollars provided when the U.S. treasuries are sold", and then suggests a number of dumb answers. His list doesn't include "buying up truck loads of Yen from Japanese who want to deposit U.S. dollars in U.S. bank accounts". That is what drives the treasury selling by the BOJ. The article reflected a rather uninformed point of view. Best, Earlie