Fed cuts rates; crisis over?

boddhisatva kbevans at panix.com
Mon Oct 19 01:02:09 PDT 1998


C. Dennis,

First, you'll have to deal with the fact that American industrial capital is now younger on average than Japanese capital for the first time in a very long time. Remember the American rust belt had real factories and well-trained workers throughout its downturn. One problem with real factories and well-trained workers is that they don't necessarily add up to profitable production. The other and more important problem is that they require money to make them go. To get that money there must be a credit system and that credit system must be reliable. The Japanese cronyist credit system vastly over-extended its capacity to create credit reliably. Unless they change that system their aging industrial capacity will be unable to replenish itself and remain effective.

peace



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