1 After a decade long slump bankruptcies continue to hit records. 'It is the ultimate viscous circle. After land prices recorded their steepest decline of the downturn during 1999, it came as little surprise when corporate bankruptcies hit a new record last year. 'Comment and Analysis: Japan needs radical measures:' by Graham Turner, Financial Times, January 16, 2001.
2 It should be pointed out that the Treasury not the Federal Reserve sets exchange rate policy.
3 As of June 30, 2000. This figure most likely understates the actual amount of inflows. The 1995 BIS annual report in talking about the early efforts to prop up the dollar in 1994 notes;"'...there is in fact far more official financing than the balance-of-payments account show.' Similarly Sayuri Kawamura in 'Problems in Japanese Policy on Foreign Exchange Market Intervention and Foreign Exchange Reserves' (Japan Research Quarterly, Summer 1996, Vol.5, No.3) the difficulty in determining the actual amount of Bank of Japan Intervention.
4 The Wall Street Journal's "The Outlook" column (August 14, 2000) by Michael M. Phillips voiced similar concerns.
5 The BIS annual report in 1997 notes that; ' The united States financed most of its current account deficit in 1996 with official inflows...this had also been the case in 1987 and 1995.' This distinction is important because it shows that the surge in investment and inflows beginning in 1995 was financed by the generosity of foreign central banks and not savvy foreign investors. Without these inflows the USA would have to have either sharply raised interest rates or let the dollar fall to attract investors-or have the economy and markets tank!
6 One could argue that the float spawned the Thatcher and Regan movements, privatization and the whole trend towards less government.
7 Ed Yardeni, at Prudential in the 1980's coined the term 'bond vigilante' to describe the vigilante rule bond investors would impose upon imprudent policies.
8 Interestingly by the 1990's the LDC crisis had turned into a financial bonanza for bankers and brokers. The creation of Brady bonds, repackaged LDC debt backed by USA T-bonds, led a surge in emerging markets investment.
9 "Power Without Purpose: The Crisis of Japan's Global Financial Dominance', Murphy, R. Taggert Harvard Business Review, March/April 1989
10 The movie 'Field of Dreams'.
11 Christopher Wood in The Bubble Economy: Japan's Extraordinary Speculative Boom of the '80's and the Dramatic Bust of the '90's
12 Makin also adds; 'The golden age is really a term to describe an investment-led recovery of the type that occurred in the United States during the 1920's and in Japan during the 1980's. However, despite those ominous predecessors, this expansion need not end in a stock marker crash.'
13 See David Asher, in "What Became of the Japanese Miracle', Orbis, 3/22/95
14 One does not know whether to commend President Clinton for having the bravado to pull it off or to scold him for creating a policy of economic diplomacy with borrowed money.
15 external or foreign pressure
16 One of the things I learned as a money manager to get the proper perspective on a market was to view it from a foreigner's point of view. That way you have a greater chance of not being sucked into buying the bull market hype.
17 Which to a great degree are owned by the wealthy, or in Japanese the kan or ones above.
18 Klein notes that branding would not have been possible if it were not for private sector emphasis of The Float. (Ibid. page 30)" The project of transforming culture into little more than a collection of brand-extensions-in-waiting would not have been possible without the deregulation and privatization's policies of the past three decades...As government spending dwindled, schools museums and broadcasters were ripe for private partnerships with private corporations.'
19 In 1970 40.8% of married women with children worked compared to 61.*% in 1998. Source U.S. Bureau of Labor Statistics
20 In a rebuttal Joseph R. Coyne, as assistant to the Board of Governors, wrote a letter to the Wall Street Journal (October 24, 1986) claiming that he attended the said meeting and Chairman Volcker never uttered the words. But William Greider in Secrets of the Temple notes; (page 765)'Three state legislators attest they heard Volcker say it, Senators Sandra Scofield and Harry B. Chronister of Nebraska and Representative Norwood Creason of Missouri...
21 Bad bank loans made during the first capital imbalance of the Float the OPEC surplus. Interestingly one could take it a step further and argue that by bailing out the banks Volcker was really bailing out the OPEC countries which had gotten their surplus by squeezing the world with higher oil prices.
22 Zepezauer & Naiman estimated that corporate welfare cost Americans $448 billion annually in 1996. And if you include hidden costs such as pollution, worker and consumer health, certain product liabilities, etc. which corporations do not pay for corporate welfare runs into the trillions of dollars annually (Estes $2.6 Trillion 1994).
23 Chalmers in his book Japan Who Governs notes (page 103)'...Kenneth Pyle stresses that economic nationalism was not just something the Japanese fell back on because political nationalism had been discredited by the war. It was the basis of all their actions and plans.'
24 Why did he cut rates so quickly and unusually was it because of the economy?, or a bailout? A few days later it was reported that the loan portfolio of Bank of America had a lot of exposure to troubled California Utilities.
25 This is not to say that should the Fed, like the Bank of Japan did, aggressively begin to raise interest rates it would pop the stock market bubble.
26 Ultimately trickling up to the Zaibatsu, or wealthy families.
27 Look anywhere around the globe from the rail system in London to electricity in California the promises of deregulation and increased emphasis on the market, the tenets of the Float, are failing to deliver and are putting constituents in a bind.
28 As a person of faith, I have serious reservations about granting powers to something that can influence and control us and often does not pay for its sins.