Japans warning

[Il_Mostro]

the observer (http://observer.guardian.co.uk/business/story/0,6903,1366578,00.html)
[ QUOTE ]
Japan is warning the White House that there will be 'enormous capital flight' from the dollar if the Bush administration maintains its laissez-faire approach to the mounting currency crisis.

[/ QUOTE ]

We might be in for some interesting times ahead.

[adios]

Let me get this straight, the Japaneese want a stronger U.S. $ so their currency won't appreciate against the U.S. $ i.e. they don't want their currency to strengthen agaisnt the U.S. currency but they believe the U.S. currency should strengthen against theirs. So they want their goods and services that they export to be remain attractive to consumers instead of U.S. goods and services becoming more attractive to consumers if the Yen appreciates against the U.S. $. Got it.

[Il_Mostro]

Is it just me, or have your posts become more and more incoherent lately?

If the japanese starts selling of dollars at a large scale, what do you think would happen to the dollar?

[Il_Mostro]

moneycentral.msn.com (http://moneycentral.msn.com/content/P100650.asp)
[ QUOTE ]
And unless you understand the vicious cycle of higher oil prices leading to higher trade deficits leading to a weaker dollar leading to higher oil prices, you won’t see the changes coming in your everyday life until they hit you like a truck doing 60.

[/ QUOTE ]
Ditto

[Wake up CALL]

[ QUOTE ]
moneycentral.msn.com (http://moneycentral.msn.com/content/P100650.asp)
[ QUOTE ]
And unless you understand the vicious cycle of higher oil prices leading to higher trade deficits leading to a weaker dollar leading to higher oil prices, you won’t see the changes coming in your everyday life until they hit you like a truck doing 60.

[/ QUOTE ]
Ditto

[/ QUOTE ]

In case you are living under a rock I thought I'd let you know that oil prices are down nearly $10 per barrel from their 2004 highs.

[jcx]

This is certainly a big problem. The US Currency is largely supported by the Japanese (And increasingly Chinese) buying up all of our debt. They could certainly cause big problems here if they stopped doing so & cashed in their dollars. It's likely a bluff though. As much as the US relies on foreigners servicing our debt, they rely on us to keep buying all their crap. Throw the US into a depression and you throw tens, if not hundreds of millions in China & Japan out of work.

[tolbiny]

The japenese want a stronger dollar because their economy is tied directly to ours in a lot of ways. If the dollar tanks the Yen doesn't become the new currancy of the world, in lal likelyhood the Euro does. Japan will have to do a lot of restructuring to accomodate that change.

[adios]

[ QUOTE ]
Is it just me, or have your posts become more and more incoherent lately?

[/ QUOTE ]

It's just you /images/graemlins/smile.gif.

[ QUOTE ]
If the japanese starts selling of dollars at a large scale, what do you think would happen to the dollar?

[/ QUOTE ]

From the article:

The criticism of President Bush's inaction, by a senior member of the ruling Liberal Democratic Party, will be taken as a veiled threat that Japan could start to sell off its multi-billion-dollar holdings of US Treasuries.

The implication appears to be that the Japaneese will start dumping U.S. Treasury bonds. If this happens, probably the U.S. $ declines further in value and at an accelerated pace also driving the price of Treasuries down resulting in a huge loss for Japan since they would be selling the Treasuries at a much lower price than they bought them at. Two things the Japaneese don't want.

My point was that the Japaneese want their currency to be weaker so their products are more competitive but criticize the U.S. for wanting the same thing i.e. the U.S. wants a weaker U.S. $ so U.S. products are more competitive. Nobody is forcing the Japaneese or the Chineese to undertake currency intervention to prop up their currencies.

[adios]

[ QUOTE ]
The japenese want a stronger dollar because their economy is tied directly to ours in a lot of ways.

[/ QUOTE ]

The Japaneese economy isn't the only economy that fits this bill. The U.S. is the consumer of last resort it seems.

[ QUOTE ]
If the dollar tanks the Yen doesn't become the new currancy of the world, in lal likelyhood the Euro does.

[/ QUOTE ]

So what? And in my book a 40% or so decline is tanking.

[ QUOTE ]
Japan will have to do a lot of restructuring to accomodate that change.

[/ QUOTE ]

Japan and Europe can open up their markets and adopt more pro-growth economic policies or will have to live with a declining U.S. $ making their goods services less attractive when compared to the U.S. I also saw this week that Canada is contemplating intervening on behalf of the looney.

[adios]

[ QUOTE ]
Ditto

[/ QUOTE ]

A fine example of coherency and clarity.

[adios]

[ QUOTE ]
[ QUOTE ]
moneycentral.msn.com (http://moneycentral.msn.com/content/P100650.asp)
[ QUOTE ]
And unless you understand the vicious cycle of higher oil prices leading to higher trade deficits leading to a weaker dollar leading to higher oil prices, you won’t see the changes coming in your everyday life until they hit you like a truck doing 60.

[/ QUOTE ]
Ditto

[/ QUOTE ]

In case you are living under a rock I thought I'd let you know that oil prices are down nearly $10 per barrel from their 2004 highs.

[/ QUOTE ]

Actually about $15 but who's counting /images/graemlins/smile.gif. I know I'm preaching to the choir here. There's this thing called the law of supply and demand and when the price of oil gets high enough you'll get all the oil you want more or less /images/graemlins/smile.gif.

[Boris]

"the mounting currency crisis" haha. good one. where is all the capital going to fly to? Gold? That's a joke.

[lastchance]

No, Euro.