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Strategies & Market Trends : Heinz Blasnik- Views You Can Use -- Ignore unavailable to you. Want to Upgrade?

To: jrhana who wrote (1652)	5/21/2003 9:58:50 AM
From: zonder	Read Replies (1) \| Respond to of 4905

Do you mind searching in Google for accounts of how and why Japan heavily buys US t-bills? I am a bit overwhelmed with work today. I don't mind talking about it afterwards if you would like to. Here is the first link I came across. I am sure you can find better sources. If you recall, Japan has been bailing the US out for a few years by making sure all the bonds and T-bills offered at auction are purchased. They have been quietly grousing about it. Japan has its own national debt of well over 3 trillion dollars, a large part of it caused by having to purchase US government instruments. Japan is hopelessly intertwined in the US market, the largest in the world and the single largest consumer of products made by Japanese companies. An economic disaster in the US, like defaulting on our debt, would be as catastrophic to Japan as it would be to the US. So our number one trading partner has every reason to continue buying US government securities, which forces them to protect their investment from collapse. If Japan stops bailing us out by stopping to pick up what's left over on auction day, the US will default on its debt and we face a total collapse of our financial system. concentric.net