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First of all: the yen has been hugely cheap for years and years. The fact that Mr. Mikuni thinks the yen might rise to 50 to the dollar means, there has to be a 40% drop in the dollar! And this is exactly what the US is demanding China do! If Japan suddenly dumps its FOREX reserve and its US securities kitty into global markets, this will utterly destroy the US ability to buy oil.
For the last year, the Japanese have hinted at this. There is a game of ‘chicken’ developing here: both China and Japan hold more than $1.5 trillion in US paper and whoever drops it off the cliff first, will beat the one who hesitates. So both are whispering or suggesting this should be done but not doing it. Will they do it? I would think so! This will probably happen after Saudi Arabia falls to revolutionaries.
This possibility is extremely high, not low. It is the focal point of all of bin laden’s works and dreams. And it will happen if oil drops below $30 a barrel. This will bring the money machine of Saudi Arabia to a screeching halt. For Saudi Arabia holds around $1 trillion in US paper in public and another $2 trillions in private deals of various sorts. This is why the US government has been frantically bailing out Saudi machines like Citigroup, for example. As well as Fannie Mae and Freddie Mac.
First of all: the yen has been hugely cheap for years and years. The fact that Mr. Mikuni thinks the yen might rise to 50 to the dollar means, there has to be a 40% drop in the dollar! And this is exactly what the US is demanding China do! If Japan suddenly dumps its FOREX reserve and its US securities kitty into global markets, this will utterly destroy the US ability to buy oil.
For the last year, the Japanese have hinted at this. There is a game of ‘chicken’ developing here: both China and Japan hold more than $1.5 trillion in US paper and whoever drops it off the cliff first, will beat the one who hesitates. So both are whispering or suggesting this should be done but not doing it. Will they do it? I would think so! This will probably happen after Saudi Arabia falls to revolutionaries.
This possibility is extremely high, not low. It is the focal point of all of bin laden’s works and dreams. And it will happen if oil drops below $30 a barrel. This will bring the money machine of Saudi Arabia to a screeching halt. For Saudi Arabia holds around $1 trillion in US paper in public and another $2 trillions in private deals of various sorts. This is why the US government has been frantically bailing out Saudi machines like Citigroup, for example. As well as Fannie Mae and Freddie Mac.
China's currency is not the yen. And what exactly is the US demanding China do? I'm confused by this article.
japan's currency is the yen and the article is addressing what japan might do (or china or the mideast), but with focus on japan since they started the ZIRP economy which brought us to the point we are at right now in the world. we became an importing (consumer) country instead of an exporting country (productive) when japan devalued their own currency to sell us exports cheaply.
the entire article is available here: CHINESE CHECKMATE « Culture of Life News
japan's currency is the yen and the article is addressing what japan might do (or china or the mideast), but with focus on japan since they started the ZIRP economy which brought us to the point we are at right now in the world. we became an importing (consumer) country instead of an exporting country (productive) when japan devalued their own currency to sell us exports cheaply.
the entire article is available here: CHINESE CHECKMATE « Culture of Life News
Don't you think that "the point we are at right now in the world" has anything to do with Japan producing superior products more efficiently than most of the rest of the world does?
i think that their market manipulation of currency had a lot to do with what we bought or did not buy. i am not pointing out japan as the only source of our problem but as the origination point. not everything made in japan was high quality and americans have been focused on buying at the least expensive price (which is actually probably normal for human nature).
i think that their market manipulation of currency had a lot to do with what we bought or did not buy. i am not pointing out japan as the only source of our problem but as the origination point. not everything made in japan was high quality and americans have been focused on buying at the least expensive price (which is actually probably normal for human nature).
Agree. "Made in Japan" did once have the stigma that "Made in China" does now. If you read books like the 80/20 Principle (an excellent read, by the way), you'll see that Japanese industry adopted these ideas much earlier than American did, which gave them a major competitive advantage that had nothing to do with the exchange rate.
I don't necessarily agree that Americans always go for the cheapest price. I'm quite convinced that if they wanted to, the Chinese could easily outdo everyone in terms of price on cars. I don't expect to see many Chinese cars on our roads. In fact, people still have a preference for Japanese cars, despite their current higher prices than U.S. equivalents.
China piggybacked on the currency devaluation of the Yen agreed upon by the US and Japan to allow the Japanese economy to try to export its way out of a long recession. This was during the Mexican Peso crisis in 1994-1995. Japan would agree to buy treasuries to bring down US interest rates and devalue the Yen to facilitate US consumption of goods imported from Mexico and Japan. It's often referred to as the Reverse Plaza Accord of 1995 because the policy is a reversal of the dollar devaluation agreement of 1985 reached with the G-7 to bail out the US automakers and other manufacturers.
China piggybacked on the currency devaluation of the Yen agreed upon by the US and Japan to allow the Japanese economy to try to export its way out of a long recession. This was during the Mexican Peso crisis in 1994-1995. Japan would agree to buy treasuries to bring down US interest rates and devalue the Yen to facilitate US consumption of goods imported from Mexico and Japan. It's often referred to as the Reverse Plaza Accord of 1995 because the policy is a reversal of the dollar devaluation agreement of 1985 reached with the G-7 to bail out the US automakers and other manufacturers.
that is interesting. when i looked it up there was an article for 2003 that ended with this:
However, as the IMF warned in a recent report on deflation, if the dollar falls too far and too fast it could rebound on the US itself. “If the dollar decline were severe enough,” it noted, “foreign balance sheets could come under significant pressure, aggravating deflationary pressure there with effects that can rebound on the United States.”
In other words, if the dollar’s fall induces an international recession, the result could be a repeat of the 1995 situation, when Japanese authorities warned that money would have to be withdrawn from US financial markets to repair balance sheets at home. Given the US economy’s even greater dependence on foreign sources of financing today, the impact of such a withdrawal would be even more serious.
that seems fairly prophetic now, yet here we are trying to devalue our dollar by throwing dollars out of helicopters.
Agree. "Made in Japan" did once have the stigma that "Made in China" does now. If you read books like the 80/20 Principle (an excellent read, by the way), you'll see that Japanese industry adopted these ideas much earlier than American did, which gave them a major competitive advantage that had nothing to do with the exchange rate.
I don't necessarily agree that Americans always go for the cheapest price. I'm quite convinced that if they wanted to, the Chinese could easily outdo everyone in terms of price on cars. I don't expect to see many Chinese cars on our roads. In fact, people still have a preference for Japanese cars, despite their current higher prices than U.S. equivalents.
I thino that peole really look at cars quite differentloy. The chinese cars are thought of much as the Japnese cars were prior to the 70's.They are still even behind Korean cars which is now the real threat to american cars ever being accepted again. American cars show just what losing a customer base does to a company now days IMO.
Oil better stay low or the people will see Obama and the Democrats as the same as the republicans. All the promises Obama made will become empty promises. After all the price of oil is the straw the broke the camel's back. The people can't afford to pay $5.00 for a gallon of gas.
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