[lbo-talk] Japanese banks hemorrhage

dredmond at efn.org dredmond at efn.org
Wed May 28 16:44:47 PDT 2003


Quoting RE <earnest at tallynet.com>:


> Aren't the banks' positions only going to be made worse by the falling
> dollar, since it will cut down on purchases by US consumers from Asian firms
> these banks tend to lend to?

It may not work out this way. A rising yen/yuan/won/S$/NT$ could also push up domestic demand (Asia already trades more with itself than with the US). Historically, the major Japanese banks were an accounting fiction, designed to funnel resources to the keiretsu system, though this is starting to change. While the famed Iron Triangle of the yakuza-construction industry-LDP is in deep crisis, the Japanese economy rests on a foundation of 2 trillion EUR liquidity stored in Japan's postal savings bank and accumulated trade surpluses.

-- DRR



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