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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (3880)	12/26/2003 12:57:40 PM
From: Kailash	Respond to of 110194

"Hayami also said Japan's foreign currency purchases expose the government to the risk of losses. ``The government has aggressively stepped into the market,'' he said. ``It holds such a huge amount of dollars, and who would pay for losses if the dollar plunges?'' " The problem here is that the Bush administration doesn't seem to care, so Japan doesn't really have a partner in the US. Instead, the administration is recklessly pursuing schemes that have a huge price tag. The official Japan might talk tough, but continuing to bail out the dollar may carry too high a price to carry out in practice. While Japanese intervention may be able to prevent a dollar collapse, it won't prevent a loss in value against the euro and gold. It's an interesting dynamic: production moves to Asia, consumption stays in the US. They're in effect acting as if we're one country, and in a very real sense they're right. Japan will be severely impacted by a collapse of US consumption. Cheers, Kailash