Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: Henry Volquardsen who wrote (603)	9/7/1998 1:33:00 PM
From: Frodo Baxter	Read Replies (1) \| Respond to of 3536

>Also it is tougher to determine an appropriate exchange rate for yen than it is for the more open European economies. Is there a formula somewhere that figures this all out? Can you point me to it? Or is this protected voodoo? >It depends what segment of the Japanese economy you look at. I saw a study a few years ago that suggested, at that time, that there were multiple equilibrium levels for yen. 110, I believe, was appropriate for electronic, 130 for autos and so on for the various export oriented sectors. But the protected sectors of the economy such as agriculture were all well over 200. Well, can you really say that the arm is weak while the leg is strong? There's only one equilibrium and it is what the market says it is. Unless it's wrong. It shouldn't be too surprising that the favored industries can do with a stronger yen, considering they had a negative cost of capital. Did the analysis include the financial sector? It must to fully capture the rot at the core. Beggar thyself.