Our Proprietary Model

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) and "Princes of the Yen" (M. E. Sharpe, 2003).