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To: derek cao who wrote (23662)	8/31/1998 3:13:00 PM
From: Clarksterh	Respond to of 70976

Derek - OT On this you and I agree - that part of the problem with Asia is the huge savings rate combined with poor accounting standards and restrictive capital flows (hard to invest overseas). Thus the money must be loaned at home and that much 'free' money is likely to cause problems such as over-capacity. However, I'll admit that this feeling is largely gut-feel since I have seen little in the way of quantative data on, for instance, impediments to over-seas investment. JMOHOO. Clark

To: derek cao who wrote (23662)	8/31/1998 3:36:00 PM
From: Katherine Derbyshire	Read Replies (1) \| Respond to of 70976

>> Why Asia prospered in the past while they have higher saving rate? My guess is that the money had been used efficiently to build up their infrastructure from scratch. IMHO, now is it the time for those developed Asian nations to focus on more spending than savings. There are limits on how many factories you can build.<< A good bit of that Asian infrastructure was built with borrowed money, which is part of the current problem. At least in Japan, a large chunk of personal savings is in the postal savings system, which I think buys Japanese government bonds. Another large chunk is in the US markets, especially Treasuries. Any that was in the Nikkei in the 1980s probably bailed out years ago. It's very amusing, really. As recently as last year, Asia was viewed as a paragon of virtue because of their high savings rates compared to those spendthrift Americans. Now they have to spend their hard-earned yen/won/yuan in order to rescue our economy, even though every human instinct (and quite a few tangible facts) tells them the money is better off under a mattress. Not likely to happen, IMO. If our prosperity depends on the Japanese consumer's lust for overpriced American goods, we are in deep trouble. Katherine