Japan\ recent decisions

[Timothy Canova <tcanova@xxxxxxxxxxxxx>]

In response to G. Kohler's solicitation for discussion on Japan's recent
policy decisions, I repeat my earlier e-mail message to this network.

	It seems to me that the argument can be made that $100+ billion
	fiscal stimulus is simply too little, particularly in light of Japan's
	high real interest rates combined with significant deflation (which is
	more serious than high real interest rates without deflation).
	The deflation is forcing liquidation of loans and possibly even
	contraction of the money supply.  The level of bad loans on the
	books of Japanese banks have now risen to over half a trillion
	dollars.  A $100+ billion fiscal stimulus is merely bailing a
	trickle of the water which is seeping out of the Japanese economy.

As a new subscriber, I urge you to take a break from your talk about
your "talk rules" to join in a timely and substantive discussion.

Tim Canova



Timothy A. Canova
Visiting Instructor
University of Miami School of Law
Tel: (305) 284-3446
Fax: (305) 284-2349
E-mail: tcanova@xxxxxxxxxxxxx