Tuesday, September 29, 2009

Capitalism Lesson 101

No sooner did I mention that I didn't like the way the dollar was trading if we were in the midst of a big reversal when this news out of Japan has sent the dollar spiraling in the last couple of hours. If the dollar doesn't catch a bid it could mean Wall St. will play tomorrow as Rome continues to burn. From Bloomberg:

The Bank of Japan may decide as soon as next month to let its emergency corporate-debt buying programs expire as businesses regain access to private funding, people with direct knowledge of the discussions said.

Officials are concerned that maintaining their purchases of corporate bonds and commercial paper beyond the scheduled end in December would distort capital markets, according to the people, who spoke on condition of anonymity because the deliberations are private.

Wait a minute. Why doesn't this same logic apply to the Fed and the mortgage purchase program? Oh because, Bernanke is dead set on destroying everything good in America by destroying the very thing we use to purchase other goods and services from around the world. That makes alot of sense. If anyone should want a weak currency, after their currency has been on a parabolic rise, it should be Japan.


Deputy Governor Hirohide Yamaguchi said on Sept. 18 that the central bank needs to “be mindful that keeping the temporary measures for a long time may hurt an autonomous recovery of market functions and invite the distortion of the allocation of resources.”

Nice to know our government is as worried about "proper allocation of resources." That phrase is at the heart of all things capitalism and Japan is giving us lesson 101 regardless if it hurts their economy. You know, I am an American. I love America. We may muddle through for another year or two, maybe five but in my mind we are becoming the laughing stock of the world. This is just ludicrous.

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