Wednesday, May 13, 2009

More Dollar Hatred

This is the worst scenario. Currently, it is nothing to get worried about. It is just warning shots and probably political positioning in Japan but if this were to become a populist movement worldwide, it could spell disaster for the U.S. and the world (at least in the short term). BBC news is reporting that Japan's opposition party would not buy U.S. debt denominated in dollars.

Japan's opposition party says it would refuse to buy American government bonds denominated in US dollars, if elected.

The chief finance spokesman of the Democratic Party of Japan, Masaharu Nakagawa, told the BBC he was worried about the future value of the dollar.......But, he added, it would continue to buy bonds only if they were denominated in yen - the so-called samurai bonds.


However observers say that, while the move would be a remarkable policy shift, it was unlikely that Mr Nakagawa's party will win the forthcoming election, due before mid-September, despite the unpopularity of the ruling Liberal party.

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