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To: dougjn who wrote (15916)	10/2/1998 2:55:00 PM
From: Joe NYC	Read Replies (1) \| Respond to of 152472

Doug, Such as printing money in pretty extreme amounts and handing it over to the banks (and accordingly somewhat hurting everybody else, as well as forcing them to go out and buy, buy, buy.) That hasn't happened yet. I am not sure if "printing money" is going to solve the problem. If I remember my ECON 101, central bank buys stuff, for money. This money ends up in the banking system, thus increasing the money supply. Banking system can lend the money to get the multiplier effect going. But the banks are not going to lend the money, because of a lack of confidence in Japanese businesses and consumers. Increasing the money supply, or making money cheaper is, by itself, not going to overcome the credit crunch. Any bailout of the financial institutions will have some conditions tied to it, like some safeguards that it doesn't happen again. These safeguards will prolong the credit crunch. That's pretty much what happened here in the US. I am not sure if Japanese Central Bank can create inflation in this environment, even if they want to. Not that it is the answer. The answer is restoring confidence in the government, banks and other financial institutions. And more importantly, in Japanese people themselves. Joe