New York Times January 29, 2000 Japan to Turn to Direct Loans From Its Banks Related Articles Comeback Time in Japan for 3 Big Brokerage Firms (Jan. 29, 2000) Economic Stimulus in Japan: Priming a Gold-Plated Pump (Nov. 25, 1999) Japan Moves to Stimulate Its Economy (Nov. 12, 1999) By STEPHANIE STROM OKYO, Jan. 28 -- In a striking demonstration of how precarious Japan's financial situation has become, the government plans to borrow money directly from banks to fulfill its obligations to local governments. Governments normally borrow money by issuing bonds, which is cheaper than taking out bank loans. Japan's unorthodox approach to borrowing now and the size of the shortfall -- 8 trillion yen, or roughly $76 billion- have stunned economists and other market watchers. With one small exception, this is the first time since the days after World War II that Japan has taken such a step. The amount is equivalent to roughly 2 percent of Japan's gross domestic product, and exceeds the 7.7 trillion yen the government has injected into troubled banks. "The funding mechanism is breaking down," said David Asher, a research fellow in the Japan Program at the Massachusetts Institute of Technology. "The dam is showing more and more stress fractures, and they're trying to put plaster on them." ====================== Like I've posted over and over again...the economies of the world will collapse inevitably and the first big one to go over the edge will be Japan. Japan is desparate. Their banks are awash in loanable funds and no one will borrow. The banks can not repay what they owe because no one will borrow. Now the government actually has to sidestep the traditional bond market for raising funds and borrow from the banks at even HIGHER rates in order to keep the banks afloat. Laughable actually. Laughable. All the blue smoke and mirrors of the fiat money systems and fractional reserve scams are soon to come crashing down. Good riddance. Let's hope that the one country that had the best ability and opportunity to succeed and nevertheless STILL chose to do evil, comes crashing down in the pile of ashes it deserves....America. The criminals in our legislature have taken away the real money of the citizens and replaced it with worthless fiat paper trash. We began as a Constitutional Republic without a criminal central bank, no fiat money and no fractional reserve. The men that penned the Constitution understood the evil of paper money unbacked by gold. Now ya gets what ya deserves. I'll be the one rolling on the floor laughing my ass off. Paul Milne

-- Freddie Fiat (@ .), February 02, 2000

Answers

JERUSALEM POST Wednesday, January 14, 1998 16 Tevet 5758

Is The End Of The World Nigh?--By PINCHAS LANDAU

Regrettably, however, the crisis in Asia is about nothing less than the end of the world--at least the world's financial system... Japan ...is facing the threat of an imminent meltdown of its entire financial system...If the Japanese don't quickly get their act together, then the crumbling of their financial and banking system, which has been underway since 1990, and which has led to the entire East Asian crisis, will lead to the paralysis and possible collapse of the global financial system...

It may seem incredible that the threat is on such an apocalyptic scale...that the Japanese have dithered, fumbled, lied and dissembled for so long, as to have reached the point where they can bury themselves and drag everyone else down with them...But it's true; the threat is real...the speed of events and the pace of collapse means that there isn't much time left to take the measures needed to head off disaster...The long-simmering crisis in Japan has blown open the extent of the threat. It might yet blow over--or it might blow away the economic boom of the 1990s and give the doom-and-gloom Millenarian nuts a more apocalyptic scenerio than even they had bargained for.

-- Patrick Lastella (Lastella1@aol.com), February 02, 2000.

Freddie are these YOUR words or are you attributing them to Paul Milne?

"Like I've posted over and over again...the economies of the world will collapse inevitably and the first big one to go over the edge will be Japan. Japan is desparate. Their banks are awash in loanable funds and no one will borrow. The banks can not repay what they owe because no one will borrow. Now the government actually has to sidestep the traditional bond market for raising funds and borrow from the banks at even HIGHER rates in order to keep the banks afloat. Laughable actually. Laughable. All the blue smoke and mirrors of the fiat money systems and fractional reserve scams are soon to come crashing down. Good riddance. Let's hope that the one country that had the best ability and opportunity to succeed and nevertheless STILL chose to do evil, comes crashing down in the pile of ashes it deserves....America. The criminals in our legislature have taken away the real money of the citizens and replaced it with worthless fiat paper trash. We began as a Constitutional Republic without a criminal central bank, no fiat money and no fractional reserve. The men that penned the Constitution understood the evil of paper money unbacked by gold. Now ya gets what ya deserves. I'll be the one rolling on the floor laughing my ass off. Paul Milne "

-- Freddie Fiat (@ .), February 02, 2000

-- Johnny (jljtm@bellsouth.net), February 02, 2000.

Damn, this is bad. I'm surprised the Times had the guts to publish the story....

-- Mello1 (Mello1@ix.netcom.com), February 02, 2000.

Links???

This is definitely a potential major problem...will they collapse, or stagger along? And in either case, what will be the net effect on the US Economy? Not good here in Hawai'i, that's for sure! And the tourism authority is spending more advertising money in Japan, to try to draw more Japanese tourists to Hawaii! Duh...

-- Mad Monk (madmonk@hawaiian.net), February 02, 2000.

"No man is an island, alone unto himself" The same thing goes for the world's economies. Although, I doubt you'll hear that on MSNBC.

-- Gia (laureltree7@hotmail.com), February 02, 2000.

The collapse of Wall Street could be easily triggered by Japan's banks tanking, causing an unstoppable tidal wave of financial failures worldwide.

-- dinosaur (dinosaur@williams-net.com), February 02, 2000.

Haven't I read that Japanese interests hold a sizeable quantiy of U.S. Treasury paper? At some point they'll be tempted to sell them for dollars. Then things get interesting.

-- Tom Carey (tomcarey@mindspring.com), February 02, 2000.

If the Japanese banks crumble, they will send a telex speed, financial tsunami around the world. None will dodge that bullet.

-- snooze button (alarmclock_2000@yahoo.com), February 03, 2000.

"equivalent to roughly 2 percent of Japan's gross domestic product"

The other article says "128%"

-- Kyle (fordtbonly@aol.com), February 03, 2000.