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

To: Tommaso who wrote (90237)	1/7/2008 3:48:33 PM
From: Archie Meeties	Read Replies (2) \| Respond to of 110194

Try the argument in reverse. Any economy dependent on keeping their currency undervalued by selling their native currency (yen/yuan) and buying foreign assets (dollars), is at the mercy of the other consuming country to continue to finance their cheap exports. Japan and China buy dollars and continue to buy dollars because their export economies depend on selling yen/yuan and buying dollars. If they did not, things would unravel quickly and a lot of those captured industries would go other places. The amount of foreign holdings of US assets continues to rise btw, even as the proportion of USD's as reserve goes lower.