The half-a-trillion dollar trade deficit?
Doesn't matter.
The $1.5 billion-per-day federal deficit?
Doesn't matter.
Consumer debt-to-income levels the highest in history?
Doesn't matter.
Total debt levels at 350% of GDP?
Doesn't matter.
Jobs outsourced to India... lost to China... ?
Doesn't matter.
Dollar down 25% last year?
Doesn't matter.
Gasoline rising 3 cents/gal. per week?
Doesn't matter.
Does anything matter?
Well, nothing matters... until it matters. Or, as Bill Gross
suggests, it never rains in sunny California,
either... until it pours.
Nothing matters now, according to the Financial Times,
thanks to largely to one man, Zembei Mizoguchi.
Without Zimbei... or someone like him... the dollar would
have fallen a lot more than 25%... gasoline would be much
more expensive than it is now... the U.S. wouldn't be able
to finance its trade and federal deficits, homeowners
wouldn't be able to refinance their houses, and consumers
wouldn't be able to continue borrowing and spending... and
George W. Bush would be sweating re-election far more than
he is now.
"Mr. Mizoguchi is not a campaign strategist, U.S. Federal
Reserve chairman or even an online pundit," the FT
explains. But he is the man who matters more to preserving
Americans' self-delusions than the president himself.
"He is vice-minister in Japan's Ministry of Finance... " the
report continues. "Mr. Mizoguchi decides how many American
dollars Japan will buy each week. Every dollar he buys has
a direct impact on long-term interest rates in the U.S. And
long-term rates this year will go a long way towards
deciding who walks into the Oval Office next January.
"If you think this is an exaggeration, consider that, in
January alone, Mr. Mizoguchi bought a record $70bn and
poured nearly all of it into the U.S. bond market. He has
the authority to buy $100bn more this year and a bill
moving through Japan's parliament would double that figure
- more than enough to cover even the wildest estimates of
next year's U.S. budget deficit.
And that is exactly what is happening. Without Mr.
Mizoguchi, U.S. rates would have to rise sharply in search
of other buyers."
Last year, Mr. Mizoguchi spent $250 billion. His goal was
merely to keep the yen down... so Americans would continue
buying Japanese products. The effect was to coax them
further into debt and stimulate a hiring boom in China.
Of course, the debt doesn't matter now. Nor the dollar. Nor
the job losses in America. None of it matters... until Mr.
Mizoguchi decides that it should matter. Then, it will
matter a lot to a lot of people.
But not to us, dear reader. It will be the end-of-the-
world-as-we-have-known-it. But it was a fraud anyway. Good
riddance.
More thoughts... from Addison at The Daily Reckoning. |
