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To: Joe NYC who wrote (15924)	10/2/1998 3:11:00 PM
From: dougjn	Read Replies (4) \| Respond to of 152472

The reason why the Japanese government could inflate itself out of its mess is that their the Japanese government, nor Japanese companies, owe money inside or outside their economy in dollars or any other hard outside currency. They owe money in yen. It is perfectly possible for the Japanese government to print more yen, one way or another, and hand it over to their banks. For most countries in most circumstances this is very much the wrong thing to do. It tends to discourage savings, and encourage spendthrift spending. Debtors are helped and savers hurt. That's precisely what is needed in Japan. If the banks had strong equity positions they would start lending again. They aren't making new loans because they are trying, desperately, to reduce risk and exposure of any kind. One of the main purposes of inflating would be for effectively FORCE Japanese penny pinching Mom and Pops into buying more, now before prices go up even more. It gets some of that mattress money circulating and being spent. Anyway, that's how I'm seeing it at the moment. Poking holes in the reasoning would be appreciated, rather than resented. Doug