Our proprietary Liquidity Indices were developed by our Chief Economist
Richard A. Werner during his years working at the Bank of Japan
and the Ministry of Finance. It is based on the same approach that
central bankers use internally to decide on future policies and
alter economic states. Using these models, Werner not only accurately
predicted Japan's collapse in 1991, but also the 4% growth in FY96,
the collapse of the yen in 1995-1998 and the recent yen strength.
The Liquidity Model can be utilised to explain economic growth as
well as interest rate and exchange rate movements in many countries
(our coverage consists of 37 countries, including most markets that
international investors are interested in).
Below are some illustrations of our model using past Japanese data.
Japan has provided the biggest challenge for forecasting models,
as all traditional relationships seemed to break down. In response
to these challenges, a generally valid macroeconomic fundamental
model, based on credit creation, was developed. Further details
can be obtained from Richard Werner's books "New
Paradigm in Macroeconomics" (Palgrave Macmillan, 2005)
of the Yen" (M. E. Sharpe, 2003).