Will Japan Destroy the Yen to Save the Dollar?
July 11th, 2007Via: Kitco:
The only logical answer I can offer is that the Japanese realize that if they stop the flow of global liquidity they will destroy the dollar and the U.S. economy. To survive, the U.S. must be able to both limitlessly exchange the dollars it prints for the goods the rest of the world makes and then pay low rates of interest on its IOU’s that foreigners accumulate as a result. Were the Japanese to turn off the monetary spigot and raise interest rates to normal levels, Americans would not be able to do either.
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When the dollar does collapse, it’s taking the global economy with it. Destroying the yen would buy Japan a little preview.
China’s stuck in a similar position, only worse, due to their heavier dependence on exports to the US.
Actually, the Federal Reserve Banking System will collapse, not the dollar.
And as for China being dependent on exports to the US, it is much more a case of America being dependent on cheap Chinese imports…… for as has been pointed out in previous submissions on Cryptogon, the manufacturing base in America has disintegrated in its Capitalist Dreams Search for ever more Profit…… and to Hell with Service.
And all it needs is for exporters to America to insist that they be paid in currency other than the dollar, for the dollars decline to stabilise at its base level forcing it to abandon the dollar for another currency, which it cannot limitlessly print to render worthless in the illusion that it carries value.
I agree Former…the world’s economies really have built up quite a nice Catch 22 for themselves. It’s funny with the oligarchs: first, they must squeeze us “little people” so they can continue to live high on the hog for a little while longer, and at the same time engineer a “kill off/die off” scenario in which we die off, but so do THEY (by having one group of THEM killing off another group of THEM to sate their uncontrollable desires to rule it all). And, when it’s all said and done, THEY, having killed off anyone who still has any money, will have no one out there to buy what THEY are selling! Thus, THEY wind up destroying THEMSELVES! You know, I used to think the oligarchs were smart?
“When the dollar does collapse”? The US dollar has declined more than 20% against many foreign currencies over just the last 6 months (including the NZ dollar). If that’s not a collapse-in-progress, I don’t know what is.
Unfortunately, most Americans are unlikely to wake up until their government has finished robbing them blind, in the largest crime in history. It’s going to be quite a show.