Thank you Gratis, six minutes now past 11. Good morning, and welcome to midday here on Minnesota Public Radio. I'm Gary eichten. Glad you could join us. Remember those heady days of July when we kept hearing talk about 10,000 or Bust the Dow Jones Industrial Average surging ahead retirement funds growing by Leaps and Bounds everybody. It seemed was pleased as punch and oh so optimistic. Well so much for heady optimism forget about 10,000 today the Dow continues to plummet dropping below 8000. The r-word recession is starting to be resurfaced here in the United States. Globally. The situation appears to be much worse. The Asian financial crisis is still not resolved. The Russian economy is collapsing and there's growing concern the Latin America is Nick. It's time to ask the question what the heck is going on and who better than me to answer that question then Minnesota Public Radio senior business and economics editor Chris Farrell, and of course, we invite you to join our conversation as well. We're talking about the state of the economy of the US economy the global economy Russia Asia. Give us a call or Twin City area number is 227-6002. 276 Thousand Oaks. I'd the Twin Cities 1 800 to +422-828-227-6102 for 22828. So, mr. Farrell, what the heck is going on here that introduction maybe I should leave now. It's happening right now is to draw an analogy between the Minnesota farm economy in the world economy in Minnesota Farmers are in a situation where there's a lot of Supply so lot of grains lot of hogs. So you have lots of crop with the global economy. We have a lot of factories that were built over the past decade in 1990s with the fall of Communism in the Embrace of capitalism around the world. And we've also a lot of commodity markets that open up Lotto oil Marcus a lot more grain, but now you're in a situation where demand for those bees Goods in these Commodities has shrunk dramatically prices are falling the cost of debt goes up that becomes more expensive because it's still meet those debt payments, but you also have to maintain your factory or maintain your farm it maintain your equipment and affection need to invest in a little more equipment. The situation we're just the global economies much like the Minnesota farm economy is being squeezed is being squeezed hard and the cost of debt is getting more expensive. You can't get a decent price for your crop, but you got a lot of your crop to sell and you're worrying about the fault and that's what's happening in the global economy today. How serious is this Alyssa very serious. This is extremely serious. It's just a couple of days were pulling their hair out here a while ago, but seem like it's only a month or two ago. Everybody was just just before it. Asia has continued to get worse. Asia is in a depression and a recession not what African you know, when he was banned by The Carter White House from using the r-word he called the banana. This is the d word there in a depression in Asia and part of that is even go from 1991 to 1996. And you take Asia including China it accounted for two-thirds of the growth in the demand for Commodities, like oil and copper let the man has just disappeared prices of oil plummeted price of copper are down over Russia is an extremely dependent economy on exports of Commodities. So it's much of Latin America. So is there a neighbor to the north Canada? The Canadian dollar to loonie is at 140 year loan against the US dollar at par that has to do with falling commodity prices. So this is truly had so it's it's showing up in commodity prices sausage showing up in manufacturing prices because your success capacity in the world and there's a lot of Focus right now in Russia. There's a good reason she really is just the latest financial crisis. That's Rippling around the world. That's how much Russia said. It's another financial crisis. The banks are taking another hit and Heather bad Asian loans Tyler bad Russian low in Russia affect Central in Eastern Europe and that affects Europe the European Union. So it's this ripple effect the contagion effect that seems to be going around the world in the US stands out right now and parts of Europe as the only place to place has a strength. There was an interesting story in the Wall Street Journal this morning a lot of Econo. Who buys got together in Jackson Hole over the weekend? Is that right? I mean the Federal Reserve people and investment advisors. And anybody who's anybody in the absolutely true that they all got together to they were supposed to talk about income inequality, which is quite a big big subject but apparently spent most of their time pondering this global economic situation and I want to read a paragraph a short paragraph from the story that was written by David Wessel for the Wall Street Journal today when the hostess at a private dinner party asked the assembled current and former US officials what the US should now due to say Russia the silence was deafening. the conversation soon turned to a lively discussion of Indian jewelry It sounds like nobody has a clue at this point in terms of Russia. Absolutely and if there is there is no consensus of what to do. The IMF had, you know, the billions of dollars in loans that were supposed to help out Russia clearly at this point. The Russian situation has gone way past that so there's a great deal of Despair about Russia. And what do we do about Russia? What I hope doesn't happen is that that despair spills over to the whole global economy because there are things that can be done the stem dis the sense of Despair the sense of desperation that sweeping the markets and you can see the sense of Despair, but just what's happening in the market itself. Russia's collapsing. I have money fling Asia, you have money fling Russia. You have money fleeing Central Europe. You have money coming out of Latin America. Where is it going? It's going into the United States Larson US Treasury Securities and into Europe. Us interest rates are way down there way down we go break 5% Bond if this continues it's a remarkable thing. And so we have room to ease our interest rates to bring down again a coordinated ride to bring in our interest rate in order to an Essence do what the central bank or supposed to do at times of trouble when lots of stupid money is doing lots of stupid things. And by the way, the stupid money are the highly paid professionals always known that I have to calm down and not to take such a dramatic and it's a sort of panic-stricken action is not yet. They are turn the panic but it's getting off the closed. How important is the psychology of the the big shots extremely important the 401K investor going to its Main Street investor going to do when there's a real crisis or real change in the market and I don't think it's ever been the issue. Games exactly what they should do some people in their 30s or not going to cash in their game. So say, okay. I'm going to go through a year year-and-a-half baby in 5 years of a bad time. But now I got the long long. Of time. It's the professional money manager who is evaluated quarterly bonus is evaluated quarterly and his performances by the way to constantly by all the radio like Morning Star and everybody else who is under enormous pressure to act quickly wear your Banker in their International lending Division and you have been lending a lot of money to Asia or even lending a lot of money into Russia and all of a sudden these loans are going bad your jobs on the line. That's where the real concern is. we're talking this hour with the Chris Ferro, Minnesota Public Radio senior business and economics editor about the Interesting shall we say interesting economic situation that's developed around the world the markets here course in the United States are getting pummeled again today, but lots of attention focus now on Russia President Clinton is leaving today for Russian a meeting with Boris Russian president Boris Yeltsin a meeting that was scheduled me for the the Russian economy started to collapse. We should note but of course, that's the backdrop now for that meeting that the Asian situation what the heck is going on with the economy. That's the theme this hour if you'd like to join our conversation to 276 thousand 2276 thousand outside the Twin City area 1 800 to +422-828-227-6001. 802-422-8284 scholarship Minneapolis Rec. I was wondering if the rumors were still hot and heavy about transferring to Social Security System into the stock market. It's still a Vite is still an ongoing discussion. They're having various a blue-ribbon commission is going to travel around the country and talking about it for the moment. This is probably put the kibosh on that idea at least for awhile raises an interesting point have policymakers in general not just on Social Security and then the conversation about social security but if policymakers in general gotten too far out on a limb operating on the premise that boom times were here boom times would would stay around forever. But you know why everybody pays lip service to this and they have for the last call and all of this won't last forever, but have they in fact been acting on with that kind of caution. I think you have seen especially in Washington with the whole debate. Would we do with Surplus you seen a little bit exactly what you're describing the sort of Bloom time and you're also noticing as the Dare questions being raised about the stock market gains in the strength of US economy and a norm. Political leadership vacuum is in tatters is reputation right now Congress just seems to be running around and who knows what they're doing at this point in time. Japan. Japan has is still going nowhere in this economy is getting worse, call. He's in a political fight of his life in terms of the election there. Yeltsin is, you know, he still has a name he's in power but he is not in power to a bunch of dementia oligarchs that right now seem to be in control. So no matter where you go or in the world, the political leadership is is weak and what the system now is relying on our Central bankers and the technocrats of the IMF, you know do order to take some rather bold action because it does not appear on the political level that there is any natural political leadership that can rise to this occasion. We've been assured recently in the last few years that the the Economic experts the technocrats have got this whole situation of managing the economy under control. They've refined it to a to a science. Now. We can't have any real big problem little blips here and there but boy, they've got everything. We're in a new age a new age. All right. Well is that true? There's a problem. There always is a problem that we don't know how to handle and we've the the world economy has run right into a new one. I remember when stagflation no sex flation immersion Economist knew how to deal with inflation and they knew how to deal when you know an economy was weakening as a yes or your toolkit you pull it out of your pocket. You say Okay of inflation Federal Reserve has to raise interest rates and we'll go after inflation and when the economy is weakening with the Federal Reserve and maybe some fiscal policy and there in a couple of pot taxes and we'll get the economy going. What are you doing here stagflation, which is when you have inflammation and a slowing economy at the same time. Now our problem is these currency markets good economies sound economies economies with high savings rates, very little government debt and and you know good private Enterprise are being attacked and their currencies are plummeting and they're being forced to take actions to try and save their economies which makes their economies worse. And we really don't have any idea. What is the right policy prescription for dealing with this kind of finantial contagion that just going around the world and that's why in the David Wessel article you get that blank. What do we do? It just it have to do with Russia because with Russia, there is a genuine the richest that we may not be much at the Western World can do at this point except would be opportunistic and supportive but we take a look at the the emerging markets and the developing nations in general. It's a you'll get that to dinner party. You'll get the exact same response. And that's the most worrisome thing back to the phones Roberts on the line with a question. Go ahead place. You know, I've been listen to Alan Greenspan for the last year to saying there's going to be a correction. There's going to be a correction and no one wants to listen to him and I find myself constantly asking the question does no one in the world of economic ever read history. Don't they? Remember the name of the 1920s? Don't do remember the 80s and have they never heard of the laws of science thermodynamics and things like this. We can't have perpetual motion. Why does everybody assume we can have sustainable growth? Why doesn't anybody look at the world around them and realize these Corrections are going to happen. Why is the entire tone of this show sound surprised? Well, there's a couple things that mean yes, we have known Greenspan's made the warning services in the US market at this point is reacting quote unquote quite rationally to a great deal of uncertainty and worries about corporate profits. And yeah, we knew that the good times can go on forever. But typically what happens in an economy of the US is doing well. Some other economies are doing that. So well, then the US economy weekends, maybe Europe's doing better or Latin America. There's something different going on right now and it is it is a lesson of history and we have seen this occasionally, which is this sort of financial complications that go around the world economy. And typically you put them out they have dampened you don't end up with arm again, but there's always a little bit of a worry and that worry is there court right now because the tide doesn't seem to be stemi whatever cliche I can come up with that burrow into this particular send in the lessons of History are important, but what history only gives us a certain amount of guidance, what do we do now? I don't believe and I think that, you know, a lot of stuff is being drawn to analogies tonight. 29 or silly the world economy declined at a 10% annual rate in that. Of time in 1975 and 1990 1982 and 1991 New Trier sessions at the three big recession of the world economy grew at 1.5% annual rate in at 1.5% And the rate is it much and you hurt but there's a big difference between growing a little bit and declining at 10% solutes Great. Depression stuff is silly but nonetheless is this worrisome. It is a contagion and want to think that we've learned is that the financial systems are very linked. I mean, can you imagine that you are Spanx? We're participating in Russian loans in some of these Russian loans. What were they doing? A little fun? I guess trying to make a little money. So there's a lack information just a lot of uncertainty. It feeds on itself. Yes history tells us that this happens but circumstances, you know that Mark Twain saying history doesn't repeat itself, but it Rhymes it does run up, you know exactly quite sure. We do this time around but isn't there more to it though Chris at least in part again, we have these are surance is the last couple of years from people who presumably know what they're talking about that something fundamental had changed that the experts at finally figured out how the whole system operates and that that they could really protect people from from the ugliness of the of the economy are there was some people with a Henderson difference between what had fundamentally changed is because of globalization country now getting the bad side of that but because of the global economy and is rapid technological change that the underlined growth rate of the US economy has probably picked up Ian does a fairly strong argument to be made that doesn't tell you anything about the business cycle doesn't tell you anything about the stock market all it tells you that this economy can grow faster than it did in the 1970s and 1980s. But if you look at the Grove at the 1970s and 1980s, they were boom times and their bus times they are where is high unemployment and low unemployment. So you're You're trying to make guesstimate some the future adjusting for the business cycle adjusting for changes in the stock market with people would argue. You know that the stock market will continue to go on without a major correction. I mean trees go to the sky in that silly. But you know what the stock market was not irrational either when you take a look over the. The 1990s it low inflation High corporate profits and strong economic growth and we still have a lot of strength in this economy to 276 thousand be like to join our conversation Pony with business economics editor Chris Farrell this hour about the global economy. President Clinton is on his way to Russia. He will be meeting with Russian president Boris Yeltsin and certainly one of the items topping. The agenda will be what appears to be the collapse of the Russian economy and what if anything the US and the rest of the world might be able to do to help the Russians. Meanwhile here in the United States. The the markets are off again today dial is off another I get 250 points that lie Last entry as well. Yeah, so it's now below where it was when the year started by guess and what's going on. That's the that's the subject of this hours conversation to 276 thousand or one 800-242-2828. If you'd like to join our conversation Neil your next good place. My wife is going to retire in about 3 months and I am retired in the last month. We've lost about 10% of the value of our Investment Portfolio, which is into mutual funds that we also have a substantial annuity with the life insurance company. I can wear invested in you are up and the United States about equally I've got a variety of friends to choose from that. I can roll my money into what I'm wondering is What can I do to protect my values in a particularly in light of the fact that we're both going to be living on our Investment Portfolio very shortly. I have any suggestions on what I might roll is money into the kind of protective a couple of points. When you retire you probably have another unit depending on the the actual tables and knocking and what a little good luck, you know, maybe another three decades. So sure this is a pretty nerve-wracking time. This is a tough time is a worrisome time, but you know, what's it going to last six months a year? Maybe the worst scenario you come up with five, you're so part of you have to put now in perspective and not get caught up with it. You can't let the market determine what you do. You can't become Hostage to the market with the market jerks this way and ujurak that way in the market goes like this and you do that to me just can't do that. If you let the market control you you've you've lost right then and there so I wouldn't do anything drastic. I'm going to go back in with just you just ask yourself those old fundamental questions, you know, are you basically satisfied with your portfolio? Sounds like you're pretty nervous at this point. Okay Retreat treat a little bit Retreat back to the sleeping point. Maybe you might want to reduce your exposure to the markets by 10% and going to lock in some of those gains. You put some of it in a money market fund to your little more comfortable or you might want to put some of it into a short term bond fund get a slightly higher interest rates, but I really would avoid doing anything dramatic even if even if this does turn into a bear market and a bear Market just for the definition of affection of these definitions don't mean much but a correction to something like 10% and a beer markets the decline about 20% and the average bear Market in the post-world War II. Is average about two years. So that's that gives you a little bit of contacts, but I am getting an awful lot of questions about your do. I do just want to really respond to this and you have to push the market away put what Warren Buffett called mr. Market. Figure out your social stance as you're nearing retirement. You probably still have huge cancer in your portfolio should go ahead and lock some of those games but don't do anything dramatic not to not to push the pain of the personal finance questions here, but I'd like to keep the focus today as much as possible on the pain of a broader economy, but I should ask you Chris for people that don't follow this thing very closely. But there are they pick up their paper goodness. Gracious Rose Roshes Roshes in trouble in there. Every time they have the seems like the u.s. Stock markets getting battered around and there's Asia and now somebody so I might Latin America and you know, all this kind of thing you get 10 to get worried. Is it safe in general for people to assume that the levers managing their money and their retirement fund kind of knows what they're doing and not going to lose all their money for him. That's a reasonable assumption. Newsroom we can have access to the wires we could pretend this way. But look, what's Happening Here. Become a member unemployment's 4.5% right now. What are most businesses in Minnesota complaining about to complain but I can't find the skilled workers they need and they're desperate for them. They're looking for them their conferences about how do we build affordable housing for for workers? And we're still in an economy at the housing market housing market still fairly strong. Maybe we can do a little bit going good strong housing market if she had to keep things a little bit in perspective and remembered probably as far as the individual go so far as the economy goes versus jargon Tramway called The Wealth effect. The wealth effect is it's a price of your assets go up you feel a little more comfortable you feel good. So you got to spend some money, maybe some extra money, then you should have but because hey my stock market portfolio stop for the price of my house is up. But on the way down there's also scanned of a well for defect but it's not that big. It really isn't that big so I would be worried about these are real instantaneous responses and some of the new Wall Street really trying to figure out if I make this trade today not going to make or lose money. They're not sitting around saying if I have 60% of my portfolio in stocks in 25 years. Is that was that going to be the right allocation? What is Russia become in that kind of a population becomes in the Russian stock market is worth one half of AOL Carol your question place interpreted is more positively I can give you a box for examples off the top of my head that happen. If your friend since the colonel of Indonesia was a 30-year dictator. He's out of their Lovato in in the Congo another 30 or dictator. He's out of there and there's a potential for the whole development of central Africa. Once that stabilizes Hong Kong. The British took from China has finally been returned to China. Yes, and that's been hanging on but by his fingernail since 96 when we help them get in May finally go and and the Japanese Bank corruption. They're finally going to have to come to terms with that and yet the markets don't seem to see the trucks that's temporary as as a leading to an economic situation on the global. That's much more positive than it was Chris who I think if we went back to last October when we have the voice of 550 Point meltdown and the stock market that was actually the interpretation that was out there. This is all yesterday's going to be a lot of pain in Asia. Yeah. There's going to be a lot of being to unemployment in a lot of countries that weren't used unemployment, but it's basically to the good we going to break up crony capitalism in one that was more democratic apples and that's still really hope happens and I still think that is what will happen. But the pain is Ben what's greater right. Now, one of the great success stories of the post-world War II era was the creation of a middle-class in Asia normous middle-class that middle-class is on the point in the verge of being wiped out. So there's a lot of fear about what comes next Russia right now. It appears to be the first real attempt to step away from market capitalism global market capitalism with the negotiations that are going on right now. Pick up some more of that. We're talking to shower with Chris Farrell Minnesota Public Radio senior business and economics editor will get us more calls and just a minute NPR members have until 4 Friday to get first pick on seats for the new fall season of A Prairie Home Companion call the Fitzgerald theater today at 651-290-1221 and reserve your seat for an exciting new season with Garrison Keillor sound effects, man. Tom Keith rich dworsky in the guys all star shoe band and more. It's six consecutive Saturday shows at the Fitzgerald call now and get a discount on tickets to reserve your seats call 651-290-1221. It pays to be a member invitation to join us over. The noon hour. Today. We're going to be broadcasting that debate that was held Saturday involving six of the seven gubernatorial candidates. They met at the state fair at the Minnesota Public Radio Booth took questions that were prepared by the citizens for him and I'll have an opportunity to hear that debate over the noon hour today Major funding for Minnesota public radio's documentary fund is provided by Phil. Taylor in memory of Walter stremmel the weather forecast for the state of Minnesota possibility of some scattered showers and thundershowers. Basically though partly cloudy with highs 70s to 80s Twin Cities partly cloudy today with a high near 80° currently in the Twin Cities. We have a sunny sky or cloudy Sky though. I'm sorry cloudy sky and 75°. We're talking the shower with Chris Farrell Minnesota Public Radio senior business and economics editor about the rapid changes that seem to be taking place in the world economy. Course President Clinton is on his way to Russia now to meet with Boris Yeltsin a meeting that was scheduled before the collapse of the Russian economy. But that seems to be going to be the highlight of that meeting. And so we thought today would be a good reader Market stock market down again today. And then you hear about the Asian problems. They're not corrected and Latin America and Lots of bad news out there. Chris Farrell is come by today to try to put it in some perspective and either scare the Daylights out of us once and for all or at least give us some minor reassurance Sally go ahead and place the question I have is restorative talking about all the trends. This is all great and fine for the global picture. But what are we as individual investors to do and there's two of the previous caller you give some information but I have to kind of broad questions one. Is this a good time as US Stock Market and mutual stock funds are kind of headed to press price. Now, is this a good time to be moving from the international funds that we have that are kind of in the doldrums? To move back to the US markets and as many of the stocks that we watch our down cash well over thirty percent is this now kind of a Buy Signal were individual investors to buy some of the stocks and which stocks should be looking at technology or consumer products or transportation. For a couple drinks and I think in terms of Europe versus u.s. They're what I would do is maintain and exposure to both. I mean you want to have an exposure to the both economies and whether you want it shipped a little from one to the other. Can you want to make a five 10% shift? Because you think the US is more attractive on a relative basis, you know, that's fine. But I can't you know, what I would definitely not do is shift from Europe to the US or vice versa and you're getting a lot of this get a lot of these or either or questions and I would make marginal changes. Is this a screaming by time in the US market? My sense is the question is what's the outlook for corporate profits and I don't have a strong feeling with the outlook for corporate profits has and has a lot of strength and US economy real incomes. Her up worker wages airwrap unemployment is down labor is scarce. We've invested a lot of money in high-tech. We have higher productivity. There's a lot of real strengths there and cash flow is strong among companies. What what Is the outlook for profit growth? Is it going to be a 5% gain? It's going to be a 10% gain. How much will what's happening the global economy affect you as Corporation. It's a very uncertain environment some ice. My guesstimate is that the market is behaving the way it should be having with a lot of uncertainty. It's not a screaming by opportunity, but that's not the question. The question is do you want on the stock do you want on this company? If you do you must go buy some of it at a discount. It could turn out that you bought too high. It just could but you want to own this company. So you getting an opportunity to buy it one price at a goes down a little more you buy it at a lower you I don't even lower price and I would dollar cost average my way around this market so pick the company's you want to own. I have no idea on the timing. I just don't my own, you know, my best guess and I can see Gary you're looking at me with Ted when I was going to sell me the Brooklyn Bridge my best guess is that it stagnates, but who knows? If you're in if you're in the market for individual stocks, go ahead find the right company find the management. They got the products. They got that knowledge that got the human capital that treat their workers, right? Hey, you might as well own it back to the big picture namely Russia President Clinton on his way to Russia Today to meet with Russian president Boris Yeltsin. Is it a time when the Russian economy is in big trouble and calls for y'all since resignation are increasing Miller store along time political columnist for his vestian senior fellow at the Humphrey Institute at the University of Minnesota just returned yesterday from another two-week visit to Russia and joins us now morning professor. Good morning. How serious in your mind is the crisis in Russia? Social crisis point is that the financial crisis eat itself of course is very devastating. But because our democracy and free market-oriented economy are very very weak everything can happen because the colonies dominated to do my can you rewrite Constitution can bring back the old Soviet centralized economy. Do you see that happening sir? No the government and the president Yeltsin they are too weak and they make some concessions now they feel that. No strong and they can decide the future of the future government. That's why they dictate some conditions which in itself a very dangerous it would they work to reinitialize our economy. Thanks. They won't sleep executive ride and concentrate on the power in the Duma where they have majority of President Clinton called you and asked you what he should say to mystery Olsen what he should do during his Summit meeting. What would you advise? I think of President Clinton want to repeat what he has had several times that we have to continue our we have to listen to the international monetary fund you have to bring order to have a budget flower taxation, etcetera. Everything is fine and I will sign and countersign this kind of advice. Unfortunately. She's on the brink of the Civil War stick measure not advise button reels financial help from G7 and international monetary fund the average Russian person if there is such a a person Do they where do they how do they see this playing out didn't affect him people in the street. Now. The prices are skyrocketing, especially food because Angel enough 50% of food is imported exist release. Disappear disappear during this is really a matter of concern. Finally Siri. Is there anybody on the scene there who might be able to step forward replace Yeltsin and make things right and who is regarded as a strong man with strong hands who could bring some order to the country and other candidates little Moscow. Mr. Lusco who is very successful himself very successful administrator and who somehow succeeded to Moscow and island of prosperity in Russia field are there. Wait before the year 2003 Maine candidates to replace Mr. Yelchin General and prime minister children music in the meanwhile, Russia penalty Turfs. He's an enigma said that nobody can really see what happened. But she's resilient. It's still super power and don't forget. Russia whole export is just 1% of your Xbox combined. Yeah, just like nice maybe Bank of the United States, but unfortunately for everybody if you have to 30,000 nuclear bomb, thank you so much. I appreciate your insights Miller store Road longtime political columnist for his vestia. He is now a senior fellow at the University of Minnesota's Humphrey Institute, particularly cheery report from Professor stora. No not at all in the big fear is that the deal that you're meeting is is negotiating what she wants to prop up the old Industrial Enterprises and insist that the Russian Central Bank, which is not a very good job in bringing down hyperinflation and bring inflation down sharply print the ruble and so you could end up with a situation of hyperinflation. Who charges which is a recipe for disaster are all friend Mark celie's on the line with a question Highmark orientation in the midwest at least High Plains and Central Plains. We've got a good production year underway and everybody's scrambling around trying to figure out how to store this cry because prices are so lousy on the premise that we're going to see a lot of agricultural storage this year with the hopes that prices will go up. What are the implications short and long-term Horizon wise to having prices go up given everything that's going on now. It seems to me purchasing power of many of the people we count on for exports is declining. And I would add Natalie's the purchasing power of a lot of people we can unfreeze exports declining but also our competitors in Asia where us farmers were competing to sell their goods will those competitors can't sell the Asia either. So where are they selling they're coming here to the US which is when the strong market so you're not only getting the syrupy no demand side effects of lack of demand in Asia or other parts of the world, but you're also getting anybody that's a decent crop. They can't sell the Haisha they're coming here. This is where they're going to try and sell the goods. So that compounds to pressure the forecast about Rising food prices and Rising food production were largely based on a crawling developing World growing Asia and growing China and greater Imports, and it was a you know, it's still a good story. I mean, it sounds like it's right, but it's very dependent on one of these economies turn around and clearly Asia is not a 1/2 or even three or wonder so prices will remain under pressure. Eric your question place in relation to the weekend against the dollar. Is there any direct intervention by the US that could be effective in strengthening the yin and secondly you something like this likely to happen but we try to do June 15th or the coordinated action between the US and the Japanese central banks and it was extremely successful for one or a couple of days cuz it was a big surprise was not expected number of people got burned and it was the timing of it was was really beautiful because the Ender become a one-way trip down and everybody was piling and just say hey the yen is going to keep going down the dollars going to keep strengthening. Let's it isn't easy trade and then the central banks came in not a lot of money and they just managed to burn the speculators where the currency Traders well, but it doesn't last that long that impact currency intervention is just buys you something. And we bought that time you had the any other Japanese elections in there. We have everyone is crossing your fingers with a new prime minister take some bold action cat the Japanese economy like this. Is that really matters. That's the economy. The second world's second largest kind of that needs to be to get going in order to provide some relief to Asia and the rest of the world so they could Forge apple with Russia. They can start buying some of the Russian interest in also get age cuz I just get Asia growing again because Japan is an import export market for their other Asian Nations. Japanese economy has gotten worse. The political situation has gotten worse and the lowest expectations that we had of the Japanese prime minister have been met. So there's a great deal of Despair. There's a great deal since that that the unemployment Rising there was a there was a the unemployment range of an the official unemployment rate Japan that recently came out through the kid shows like the client but that turns out it's basically getting women out of the workforce. And so they're no longer being counted many of the women who were in the workforce are no longer being counted in the unemployment statistics. Oh actually The Unofficial of unemployment rate may be nearing 10% as opposed to the officially stated 4.1% Marion your questions Chris Ferrell. I was wondering whether I was wondering whether in the longer run coherent governments with coherent economies would be able to enact laws that would restrict the width signing of international capital in and out of their economies while still keeping themselves sufficiently attractive to International Investment to not stifle their growth. It's a that's one of the really great questions that is being discussed right now. How do you do that? There is one optimistic sign that's happening. And that is if you look at for an investment the portfolio investment for the mutual funds the money the hot money that can move fairly quickly is a shrinking part of that pie and what the bigger part investment would call foreign direct investment General Motors goes and buys a planter build a planter by the company in South Korea. Well, they have payroll to meet they have factories. And so that money doesn't come in and out for a fast. It has a commitment to that economy. So foreign direct investment is a better type of investment than your portfolio investment and your portfolio investment has been shrinking your foreign direct investment has been increasing and effects of increasing a fair amount. So that's an optimistic sign. But how do you control these huge Capital flows without some of the negative effects of putting in capital? And those negative effects are potentially quite huge. That's an answer that we really don't have I don't have a satisfactory answer that we don't have a consensus that we're moving toward. What do we know about the psychology of the people who run a General Motors say at a time when boom times I mean, I can clearly you'd want to build your plant in South Korea or whatever. You know, let's let's expand but now when the worm is turned or seems to have do they draw back to or what what what goes through their mind a two-fold effect and it depends on the company. What were a lot of companies when the initial age of situation evolved said look Asia is the future Manny that educated Workforce really truly educated work. This is you have a middle-class. I mean you have to think about you in the 1960s and 1960s per capita income in South Korea was about $83 per person. I 1997. It was 10,000 Days Inn pool back. They decided we're going to let you know we're going to stay now what you're saying is sort of a two-fold movement and it's probably offsetting each other one pulling back the expansion plans. So, you know, Gary you were going to be sent over to South Korea to Thailand to expand some this plant. Well, you're not going to be sent over there this year. We're not we're not going to send that many people. But at the same time you're sending from your Chief in it from your finance office some pretty smart pencil people to say, you know, what can we buy some of these companies on the cheap? Help when I can make you money right now before it's been a tough Market to break into a lot of protection is barriers that government really causing some problems. But hey, there's some turmoil here and this company is on the ropes and we can come in and buy them cheap and man is not going to be much of a pay off in the next 5 6 7 years, but hey, it's a buying opportunity. Just like, you know, some of the questions that we got from portfolio managers both effects happening at the same time little bit of throwing in the towel because clearly Asia situation is continuing to get worse and you going to pull back on some of your investment. But do you have another part of your business? It seemed wouldn't it? Maybe you can buy some assets are some home coal companies. That's an opportunity that in this part of the world had presented itself before let's get one more quick question on the from the phone John quick one place in regards to the millennium bug on your take on that since we were too busy scaring ourselves to death, you know, I can't get worried about the most talked-about disaster. History of the world and when something is that known yes, Toby some some implications, but I just I would steer clear of the disaster scenarios tie to the millennium bug Crush are the people who are making these financial decisions trying to cope with the global situation. I smart enough to deal with us or Are they pretty much address to? I think that there's a combination of a lot of people are adrift because we don't really have the toolkit and we don't have the institutions that deal with this kind of Crisis and won the great triumphs of the post-world War II era that generation was it created the IMF. They created the World Bank, they created the general agreement on tariffs and trade the number of Institutions to deal with international issues. The world economy has changed in such a way to those institutions are no longer working. We haven't replaced them. So then what we turn around and return to the Sun King Alan Greenspan and say can you save us? Obviously he can't. Minnesota Public Radio is senior business and economics editor Chris Farrell. Thanks Chris for coming in today and cheering us up again. But thank you. This is midday coming to you on Minnesota Public Radio will continue just a moment. Hello. I'm Brian new house with an invitation for you to meet the people that Minnesota Public Radio at the state fair. When is this coming week at the corner of Judson and Nelson at the NPR booth for the NPR radio. Maker's series does daily meet and greet Series starts Monday and goes through Friday every day from 1 to 3 in the afternoon. We'll have a handful of folks available to answer questions and give their insights into the on-and-off fair workings of Minnesota Public Radio meet the folks. Then PR the state fair during the daily radio Maker's series today. You can meet Lynne warfel Holt John Bourgeois Craig Curtis, Robin Gail, and Jack Allen time now to hear from Garrison Keillor