From: Peter C. McCluskey (pcm@rahul.net)
Date: Sat Feb 20 1999 - 18:42:47 MST
weidai@eskimo.com (Wei Dai) writes:
>I do not understand why Japanese savers do not invest more of their money
>outside of Japan (in the US or Europe for example). First of all it would
>earn a lot more interest. It would help the countries they invest in. It
>would also stimulate demand for Japanese exports, thus helping their own
>economy. And finally it would solve the problem of their savings not being
>worth anything when they retire.
Exchange rate risks stop many risk-averse people. Without being able to
predict exchange rates, you can't know whether a 5% return in U.S. dollars
is better than a 1% return in Yen. Governments probably intervene in the
currency markets at random to discourage the average person from engaging
in this kind of arbitrage.
Also, it's harder for someone who doesn't understand English to evaluate
U.S. investments.
tbates@karri.bhs.mq.edu.au (Tim Bates) writes:
>Because the Japanese government made it illegal in order to provide cheap
I don't know what's been outlawed, but Japanese have purchased enough
t-bonds that people often worry about the effects on the U.S. economy
if they suddenly sold them all.
-- ------------------------------------------------------------------------ Peter McCluskey | Critmail (http://crit.org/critmail.html): http://www.rahul.net/pcm | Accept nothing less to archive your mailing list
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