Re: USD/ Yen

verfasst von black elk, 07.07.2000, 12:53

Japanese Prime Minister Ryutaro Hashimoto said on 23rd June 1997:


"I hope the U.S. will engage in cooperation to maintain exchange stability, so that we will not succumb to the temptation to sell U.S. Treasury Bills and switch our funds to gold."
Hashimoto also said:


"There are many countries in the world which conduct the management of their foreign exchange reserves in Treasuries. These countries continue to hold on to those Treasuries, even when the dollar plummets. And to some extent, it is this continued holding of Treasuries which supports the U.S. economy."
Of course, by"exchange stability", Hashimoto meant the dollar/Yen exchange rate.

How far would international investors be prepared to tolerate dollar plummeting, before they repatriate their dollar assets in bulk? Many countries hold such assets.

The extent of non-US dollar assets may be as much as four dollars held outside the US for every one held within its borders. Such a big pile of cash floating around the world has the potential to wreak havoc, if it should move too rapidly.


"The deficit on current course is simply not sustainable. The longer it prevails, the more likely it is that there will be a costly and disruptive adjustment for both the US and the global economies"
The deficit trap, by Ernest H. Preeg, Senior Fellow at the Hudson Institute in Washington

Alan Greenspan alluded to factors that influence foreign interest in US inward dollar asset investment in his 1999 Humphrey Hawkins testimony [July 22]:


"The remaining gap between private saving and domestic investment has been filled by a sizable increase in saving invested from abroad, largely a consequence of the technologically driven marked increase in rates of return on U.S. investments. Moreover, in recent years, with many foreign economies faltering, U.S. investments have looked particularly attractive.
As U.S. international indebtedness mounts, however, and foreign economies revive, capital inflows from abroad that enable domestic investment to exceed domestic saving may be difficult to sustain. Any resulting decline in demand for dollar assets could well be associated with higher market interest rates, unless domestic saving rebounds"
Testimony of Chairman Alan Greenspan before the Committee on Banking and Financial Services, U.S. House of Representatives, July 22, 1999

Evidently, Greenspan takes the risk of dollar asset repatriation seriously.

Auszugsweise aus Colin's Financial Pages

black elk



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gesamter Thread:

• An Dottore? - 2good4you, 07.07.2000, 11:25
  • Re: USD/ Yen - black elk, 07.07.2000, 11:43
    • Re: USD/ Yen - Baldur der Ketzer, 07.07.2000, 12:04
      • Re: USD/ Yen - black elk, 07.07.2000, 12:53
        • Re: Japans Zinspolitik - black elk, 07.07.2000, 13:29
          • Re: Japans Zinspolitik - dottore, 07.07.2000, 13:52