Great podcast. You can't get this kind of analysis easily. Lena, you mention the U.S. concern should Japan begin selling its enormous Treasury holdings. What about Saudi Arabia? My understanding is that they are also a significant Treasury holder and threatened Trump to dump a bunch of Treasuries on the market if he went forward with his new bombing plan against Iran, which, of course, would put Saudi at great risk. Curious about your take on both Japan and Saudi Arabia holding great leverage on the U.S. bond market. Thanks.
If the Dollar isn't in great shape, the Japanese Yen is much worse. Their National Debt makes ours look like child's play. Why would Japanese invest in a market the Bank of Japan has screwed up for decades? The Bank of Japan even become the largest stock holder in the country. In other words, the Bank of Japan did Intervention 201, but it was a profound failure. Why would anyone have trust in such a country who has a prime minister who says she wants to spend, spend, spend, despite their National Debt already climbing due to increasing interest rates? You cannot fix stupid. How long can the Bank of Japan increase rates until they bankrupt themselves? Of course, this the problem of central banks.
This action by Bessent really means that the currency markets are not a free market. The US complains bitterly about the Chinese Yuan being fixed by the Bank of China and yet, here we do the very same thing. When governments manipulate currency markets, they increase volatility because market participants are relucent to bid when the free market becomes nothing more than a mirage. The more we monkey with the Dollar and other currencies, the worse the long-term effects will be. Of course, those inside the Beltway still believe they are Masters of the Universe.
Great podcast. You can't get this kind of analysis easily. Lena, you mention the U.S. concern should Japan begin selling its enormous Treasury holdings. What about Saudi Arabia? My understanding is that they are also a significant Treasury holder and threatened Trump to dump a bunch of Treasuries on the market if he went forward with his new bombing plan against Iran, which, of course, would put Saudi at great risk. Curious about your take on both Japan and Saudi Arabia holding great leverage on the U.S. bond market. Thanks.
If the Dollar isn't in great shape, the Japanese Yen is much worse. Their National Debt makes ours look like child's play. Why would Japanese invest in a market the Bank of Japan has screwed up for decades? The Bank of Japan even become the largest stock holder in the country. In other words, the Bank of Japan did Intervention 201, but it was a profound failure. Why would anyone have trust in such a country who has a prime minister who says she wants to spend, spend, spend, despite their National Debt already climbing due to increasing interest rates? You cannot fix stupid. How long can the Bank of Japan increase rates until they bankrupt themselves? Of course, this the problem of central banks.
This action by Bessent really means that the currency markets are not a free market. The US complains bitterly about the Chinese Yuan being fixed by the Bank of China and yet, here we do the very same thing. When governments manipulate currency markets, they increase volatility because market participants are relucent to bid when the free market becomes nothing more than a mirage. The more we monkey with the Dollar and other currencies, the worse the long-term effects will be. Of course, those inside the Beltway still believe they are Masters of the Universe.