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

To: redfrecknj who wrote (73252)	10/31/2006 1:17:48 PM
From: regli	Read Replies (1) \| Respond to of 110194

Yes, I came across that story yesterday. I don't expect Japan to raise rates at the very least for another six months. However, my point was that when 70% of tax revenue goes to pay interest on the national debt then given the absence of a huge budget surplus, increasing interest rates might have a devastating impact on national finances. - Is Japan actually able to raise rates significantly even in the medium term? - If not then how can they slow the carry trade? - If they cannot slow the carry trade will the Yen devaluation continue? - Japan is already suffering from the effects of high commodity prices (in Japan gas sales actually increased for the last 30 months despite the recent fall of CL in US$s). Is there a point where domestic dissatisfaction might override exporters preferences for a lower Yen. - What happens if Japan had to use its foreign reserves to pay down its debt. Otherwise, without significant devaluation of the Yen, is it even possible to reduce Japan's national debt to reasonable levels so that interest payments become manageable again?