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To: Sarmad Y. Hermiz who wrote (49042)	4/5/1999 7:31:00 PM
From: KeepItSimple	Respond to of 164684

> Why is the reluctance of Japanese consumers perceived as a problem? Because 90% of goods produced in a capitalist society are not _needed_. They are _desired_. And if people suddenly get the notion that last year's car model is just as good as this year's, then the whole game gets knocked out of whack. Creating artificial demand is the essence of good marketing. It's also the fundamental story of net stocks. Japan's economy collapsed when it turned out tokyo real estate wasn't really worth 200 billion dollars per acre. We'll see what happens when people realize adding ".com" to an otherwise money losing company doesn't actually make that company worth 10 billion.

To: Sarmad Y. Hermiz who wrote (49042)	4/5/1999 8:06:00 PM
From: GST	Read Replies (3) \| Respond to of 164684

Sarmad -- Japanese save 25% of their incomes. We save 0%. Yes, 0%. They have enough productive capacity as a result of all this saving that far exceeds their own needs. So they export to us and make more money to save. We borrow it back from them to buy things, and then put whatever is left over into net stocks -g-. Their system is broken and bankrupt. But they have 10 trillion dollars in private savings -- and people with money sure as hell don't want to spend it cause they have little faith in the future. It is easy to make fun of their predicament -- but the day they start bringing their money home to spend or invest -- watch out. You might ask -- why would they do that? The answer is -- to (a) bail out their system, (b) to spend on basics like housing, and (c) because the population is aging. Remember this the next time you get the feeling that market bubbles are not that dangerous. Pause and think about Japan. Look at the price they have paid, and remember who is financing our own bubble -- because it is the Japanese that have put up the really big dollars, and because without Japan our interest rates would be much higher. If you check your charts, that is where interest rates are already going -- higher.