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

To: Joseph Beltran who wrote (5550)	8/14/1998 1:57:00 PM
From: Ramsey Su	Read Replies (4) \| Respond to of 9980

Joseph, I have to disagree, especially the part about us playing hardball. This is the type of "we know what is better for you" attitude that has no place in the modern world. Look at the disastrous results in the former USSR because Gorby got suckered into destroying a political infrastructure and have nothing to replace it with. Can you imagine if China caved in during the Tiananmen era to this "vacuum" democracy? The world would be in total chaos now. I respect countries like Vietnam, which against all odds, defeated these imperialistic colonists and finally have a chance to run their own country instead of being a puppet to the US. Not that I am an expert but I have tried to think through each of the solutions on the table, be it from Japan or outside pressure. I conclude that there are no immediate solutions. A sequence of events need to occur and if the first steps work, you move ahead. If not, you change your strategies in reaction, hoping to have learned something each step of the way. Regardless, Japan needs to solve Japan's problem. We can react by choosing to work with or not work with them. Ramsey

To: Joseph Beltran who wrote (5550)	8/14/1998 2:58:00 PM
From: Frodo Baxter	Respond to of 9980

Joe, I respectfully disagree. There is no "fix" for Japan. I've said this before. They've grown from the shambles of WWII to the second largest economy in the world. Unfortunately, this is a house of cards. It was built on a domestic asset bubble of incredible proportions. And, of course, in the late stages, you mix in hubris, and buy trophy properties like American real estate (Rockerfeller) and American companies (MCA) at the top. Remember, corporate earnings are a proxy for productivity growth. Japanese companies have no earnings... or they wouldn't if they hadn't access to a sea of unnaturally easy-to-acquire capital. This is the endpoint of the extremest mercantalist policies in the world. Thus the dumbest, most irrational, most backward domestic economy in the first world. What does reform entail? Bank problems? Big deal. Set up a bridge bank and have GOVERNMENT eat all the bad loans. Demand problems? Big deal. Have the GOVERNMENT refund every citizen 750,000 yen or so. Government not have money for all this candy? Big deal. Print more bonds. Then monetize it by inflating the money supply. Dollar-yen goes to 300. And Japan suddenly becomes... South Korea. And you wonder why they are trying so hard to just muddle through. The truth is, you can't handle the truth.