> The Panic Spreads
> Benjamin Fulford, Forbes Global, 02.18.02
>
> deflation, which at perhaps 4% annually in Japan (measured in consumer
Prices have been falling 2% a year.
> crisis, says Thomas Byrnes, a sovereign-risk analyst for Moody's. Within
> three months of the bank's collapse, he says, Japanese financial
> institutions pulled $118 billion out of the global economy, mostly from Asia
> and Eastern Europe. South Korea, the world's tenth-largest economy, was
> effectively bankrupted by the withdrawal of Japanese money, he adds.
The BIS stats on the SE Asian crisis show net movements of $100-120 billion a year, but this includes US and EU loans, not just Japanese banks. Japan spent $30 billion on the Miyazawa bailout to restart SE Asia, and Korea's problems were due to a liquidity crunch, not dependence on Japanese funds (Korea has taken care not to depend on Japanese capital, for good historical reasons).
> Japan is the world's main source of capital.
Wrong. The EU is coeval (the stats often leave out Switzerland, but Swiss capital is intricately tied to Eurocapital).
The stats on Japan/US national debt are eye-poppingly wrong. Most accounts put it at 115% of GDP, and US debt at 57% of GDP. I've seen zero credible evidence from the BIS, the Fed, Eurostat or anything source putting off-balance-claims for Japan so high. Most data says Japan's private sector debt is 200% of GDP, not terribly distant from US levels. All First World economies have credit infrastructures two to three times their annual GDP.
> Independent Strategy, an analytical outfit in London that's headed by David
> Roche, a columnist for FORBES GLOBAL, says: "There is no record of any
> government being able to repay debts equal to several times the annual
> output of its country in real money. Japan will be no exception."
Au contraire: the US did just that in the post-WW II period. There's no real limit to how high your debt level can go, as long as you owe the money to yourself, which Japan does.
> Radical deregulation of distribution and retail and better legal
> accountability are other moves that make economic, if not political, sense.
Japan is a densely packed, crowded culture, so it'll always have an expensive retail infrastructure -- there's no space to warehouse stuff, so you get this just-in-time infrastructure, lots of things moving all the time.
> Nissan was losing money for most of a decade before Carlos Ghosn stepped in
> as president. Within two years he took it to record profits.
They lost small amounts of money over the decade, not huge amounts. Renault shut down some unprofitable plants, sure, but Nissan's well-trained, world-class employees were the ones who rescued Nissan (ironically, Ghosn himself takes great care to emphasize this point).
> The world can only hope that when George W. Bush visits this month, he will
> focus those Japanese minds.
Forbes: the capitalism of fools.
-- Dennis