The Obama - Clinton Disaster Message Board

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Politics : The Obama - Clinton Disaster

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To: GROUND ZERO™ who wrote (26354)	2/18/2010 2:24:46 PM
From: DuckTapeSunroof	Read Replies (1) of 103300

Re: "Zero growth for more than ten years but they're now the biggest buyer of our debt... how do they do that?" Yeah... I head they just nosed-past China (to reclaim their traditional top position as buyers of US debt). How do they do that? Easy: A combination of one of the world's highest savings rates, a general absence of good alternative investments, and the government monopoly of the Japanese Postal Union (which limits the interest-bearing investments that are available to most Japanese citizens, while producing a very steady and huge stream of cash that needs to find an investment home). Also --- (Japan has this in common with current #2 China) --- the fact that they are a HUGE exporter of manufactured products to America... which gets paid for with Dollars or course, and forces them to buy dollar-denominated debt to 'sterilize' these in-flows of Dollars, else their local currencies would be forced to RISE in valuation vs. the Dollar. It's a choice between hyper-inflation or sterilizing the Dollar inflows by purchasing Dollar denominated debts.

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