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Message-ID: <3591D072.D333C85A@xxxxxxxx>
Date: Thu, 25 Jun 1998 06:22:11 +0200
From: Eckardt <bullcom@xxxxxxxx>
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To: DMeakin@xxxxxxx
Subject: Re: Japan real economy situation
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References: <199806242229.WAA46366@xxxxxxxxxxxx>
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The following was taken from the ProFarmer site. Its from their free
section, so I guess its okay to post it here. Is from yesterday :
U.S. Tiptoeing Through Asian Economic Minefield (news analysis by David
E. Sanger)
The Clinton administration has tried to minimize its direct
involvement in Asia's economic crisis, pulling strings at
the IMF, sending out envoys to cajole foreign leaders and avoiding
the lead role Washington took when it saved
Mexico from economic implosion in 1995. But as President Clinton
prepares to leave for China, the Asian crisis,
in the words of one of Clinton's top aides, is becoming "worse and
worse every day," and it is becoming far more
difficult for the leader of the world's largest economy to deal
with it at a distance."
My perspective: Some of the best financial analysts I know and
observe are starting to say David Sanger is one of
if not the best financial writers in today's market. Thus, when he
tackles some market-sensitive topics, especially
from a news analysis approach, I'll point them out.
Sanger's latest article has this ominous graph: "For the first
time, there is talk inside the administration,
and at the World Bank, of the possibility of an Asian
depression -- an event that would reverberate
deeply in the United States. And Clinton will end his trip in
Hong Kong, once the booming example
of Asian free enterprise, whose chief executive declared on
Tuesday that a deepening recession 'is
more far-reaching than we anticipated.'"
Sanger notes several concerns including (1) that Clinton's top
aides are cautious about raising these
worries in public -- "for fear of triggering more troubles in
the markets." But Treasury Secretary
Robert Rubin last week clearly signaled he was now a lot more
worried about the Asian crisis impact
on the U.S. economy than he was a few months ago; (2) If the
IMF is unable to contain the Asian
instability, what does Washington do next? Congress, Sanger
says, won't go along with any direct
U.S. contribution akin to the Mexican "bail-out." In fact, an
amendment to a budget bill in the House
would forbid using the same fund again that Clinton tapped to
aid Mexico; (3) Convincing China this
week that it must resist temptations to devalue its own
currency, "and convincing Americans, via
television, that the global economy can do them more good than
harm."
"China's got to hold the fort," said C. Fred Bergsten,
president of the Institute for
International Economics. "If not, if the stronger center
buckles, all hell breaks lose."
Sanger concludes by noting: "Meanwhile, Clinton will again
have to make the case that economic
engagement benefits American workers. There is already
considerable suspicion (that) the North
American Free Trade Agreement led to a loss of American jobs,
even if the statistical evidence is
mixed. In China, Clinton must argue that Asia is America's
best long-term bet, despite the economic
crisis and congressional suspicions that China is bent on
stealing American technology. It was a more
convincing argument in better economic times."
Remember what Sanger says Clinton has to do: convince
Americans that the global economy can do
them more good than harm. The president is a very good
communicator. He's got a good message to
deliver, but it's not going to be easy convincing wary
Americans.
Hope it helps - Ulrich
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