From the Asia Times Online:
Japanese economists, increasingly concerned that the United States might seek to pay its enormous and growing debt obligations in a weakened US dollar, are looking to the possibility of US Treasuries being issued in yen.
"There is no wonder the dollar will weaken," said Eisuke Sakakibara, Japan's former top currency official and now a professor at Waseda University. "The dollar now looks strong for a technical reason. The money the US financial firms had invested in the world is being repatriated into the homeland, causing dollar-buying. But once this conversion into the dollars is done, the currency will head south," Sakakibara said at a forum in Tokyo on Sunday.
I completely agree with the assessment of the Japanese economists quoted in this story. The irresponsible fiscal behavior is not only bad for the future of the US dollar, but it's going to cause long term interest rates to rise significantly. That could result in an outright crash of our currency.
Most Popular Articles This Month
The gold standard these days has been reduced to a distant memory and fantasy of hard money proponents. IF we returned to a gold standard, ...
Our soft commodity flavor-of-the-month, cotton, has seen its near term futures surge "limit up" for the second day in the row. Wa...
The markets presented quite the twist on Thursday, when the much anticipated relief rally got whacked in the face. Despite the hysterics an...