The coming US dollar crisis Message Board

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Strategies & Market Trends : The coming US dollar crisis

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To: gregor_us who wrote (13605)	10/27/2008 1:15:58 PM
From: Wyätt Gwyön	1 Recommendation Read Replies (1) of 71407

i understand what you are saying in your black hole analogy. i just don't know enough to say whether i think it is true. the reason i can't say is, i don't know what will happen to the heretofore not discussed "moving parts" in the event of a Japanese meltdown. specifically, Japan is a huge creditor. in a meltdown, they are likely to call home a lot of capital. this means selling forex (mainly USD, but others as well) and buying JPY. there could be trillions of dollars of inflows into Japan, and this would be a new source of JPY demand. right now, we have speculative unwind (how much further to go, we don't know). next, we could have unwind of Japan's international creditor position built up over the past 40yrs. that could even be worse.

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