"East is East, and West is West, and never the twain shall meet,"
quoth Mr. Kipling. Were the Indian born Englishman alive today,
he might understand the current divergence between Eastern and
Western economies more than most. In any case, several items
from the news bring to mind Mr. Kipling's famed observation.
1) Following the recent "tankan" report citing Japan as mired in a
deep recession and the Sony Chairman's warning of possible im-
pending Japanese economic collapse, there has been reported a
flight from the yen to gold by the Japanese citizenry.
2) It is written that Japan has been dethroned by Britain as the
largest holder of U.S. Treasury debt. As of the last quarter of
1997, Britain held $300.1 billion of Treasuries versus Japan's
hoard of $293.3 billion. Japan is said to have been a net seller
of U.S. debt to the tune of $8.48 billion for the aforementioned
fiscal period. It would therefore appear that Britain has stepped
up to the plate to keep this game going.
3) Today, CNBC-TV reprised a story from the "International
Herald Tribune" which reported that since 1998 February, China
has purchased $52 billion of U.S. Treasuries for the express pur-
pose of retaliative dumping of same should American speculators
attack the Hong Kong dollar and threaten the peg. Naturally, the
Chinese understand that their wholesale dumping of Treasuries
would increase U.S. interest rates and threaten the U.S. stock
markets. Debt is a weapon, or so it would appear.
4) Meanwhile, party hats are being donned at CNBC-TV as
DJIA $9000 is breached and bullish sentiment gallops beyond
70%.
5) We "live in interesting times," per the ancient Chinese curse,
as Brinker is wont to remind us. |
