Doesn't mention that the Japanese would have sold US govt bonds to prop up the yen. But selling euros might force the Europeans to do just that to pro up the euro if need be. Is that a reasonable reading of things?
Japan holds a huge amount of US treasuries, and I guess was considering a mass sell off to raise cash to defend the Yen.
US treasury bond yields are already dangerously high for the US and Japan selling treasuries would push yields up even higher, and could trigger more panic selling from others.
I guess this is Bessent's scheme to try and kick that can down the road.
Propping up the yen may be more helpful for the US than if Japan hikes interest rates which is on the table (Google ’bring money home‘). The carry trade buying treasuries with debts incurred in yen has been a steady source for US funding. Eventually it will happen with collateral impact on treasury rates but this ‚supportive‘ move may just shift it past November.
Not to repeat myself, but I'll point to earlier comments about what's going on with interest rates [1].
For some context here, it's worth mentioning the Yen carry trade [2]. This is actually relevant because it allegedly underpins the AI investment boom [3] and the Yen appreciating is a real problem for investors who borrowed Yen to invest, particularly if it's into a bubble that may well pop. It's a double shammy.
I'm wondering if this is going to be another George Soros moment. Soros famously broke the Bank of England who were trying to maintain a rate for the pound [4]. If massive AI investment is fueled on the Yen then there's a pretty big icentive to break the Yen by investors. This administration would normally be on board with that sort of thing (and actively profit from it) so it's not yet clear to me what's going on.
The Treasury’s intervention to bolster the yen is the first since 1998, when it bought the currency in order to strengthen Japan’s economy after the yen had dropped to eight-year lows. The US intervened in Japan’s currency in 2011 to weaken it as part of a co-ordinated international effort to prevent a dangerous currency appreciation after the Tohoku earthquake and tsunami.
(From TFA.)
The Asian Financial Crisis of the 1990s was one of several that occurred during that decade (also: the recession triggered by the 1st Gulf War 1992, the Mexican Peso crisis of 1994, the Russian financial crisis of 1998, and arguably the post-dot-com bust in 2001, stretching the decade just a tad). For those present at the time, the dot-com boom was a short-lived (though extravagent) interval, beginning in late 1998, spiking early 2000, and crashing out in early 2001.
Japan's industries have been squeezed hard by China's rare earth sanction and global energy price. I'm not sure some financial operations can wiggle them out of the situation.
I still have the tab (open from yesterday's /hn/) about Trickle Down Economics working as intended (which it obviously does, from a certain minority of the population's top-of-the-K-curve POV).
Honestly, this is a good strategic move for USA lifestyle status quo, given Japan does still hold a massive amount of US bonds / debt obligations (even though in the past decade it has been lessening its exposure to US debt instruments).
I believe 2026/2027 is the threshhold where USA interest (on our debt) is the top-line of our fiscal budget. #USA
----
This is not financial advice (I am a semi-retired datacenter ELECTRICIAN, as bluecollar as they come):
look at the top marketcaps now verse just a few years ago. Pre-Covid, a $2T$+ marketcap was a rare achievement (i.e. Saudi Aramco... which is sometimes not even Top 10 anymore!): now there are three companies that are solid $4T$+ marketcaps, sometimes flirting into $5T$ (a few days at a time).
Inflation is the only answer, from that same top-of-the-K POV. Gotta keep them assets 'tected, ya'll.
Or track gold. Artwork. Land. Anything Real, legally speaking (except soon/now: perhaps not SFH housing) #WhateverDawg
----
If you've been saving up for a house: right now you should really check out Michael Bordenaro's recent video on the topic of "Corporate Landlords shedding rental homes" [1] – I have no affiliation other than enjoying his almost-daily audio commentary – he is a former realtor (I went to college he sold houses) and his topics are extremely observant and varried.
Michael's self-shot walks helped inspire me to get in better shape (e.g. lose "dead parent" weight, lower BP, &c) and rejoin "the tanktop generation" (he is a bit younger than me, but I never grew up so...). |-30lbs|-12kg~|
Save until you can put down at least 20% (to avoid additional insurance fees), because in a-fifth of US states insurance is already going to cost more than property taxes (which is ridiculous)! [recalled from video, below; double-check my aging flesh memorybanks]. One in twelve SFHs are NOT insured, including mine (a rental); I also do not have personal rental insurance, as tenant, because I. do. not. care. #Mom&Pop
2020, US printed $4 trillion dollars, 20% of all the currency it had ever printed. Then gave it to the richest and the greedy through PPP loans, and they stuffed that into the market. More $1t companies is logical.
This isn't too dissimilar from when Spain plundered the new world for gold and silver. Which then inflated their local markets as there were only so many real goods to be bought, otherwise they paid off debt, and came out of that poorer and didn't have money to build ships. They were strong on paper until England challenged them.
US was strong on paper until it went after Iran. US is having it's Spain moment right now.
I worked for a charity a few years after the PPP bamboozle (at the time, equivalent to outstanding student loan debt ~1.7TT iirc).
We pulled annual funding from something (which we were initially really proud of) after we discovered one of the physicians involved had "fulfilled" (i.e. borrowed and legally never repaid, per PPP's generous terms to business owners) their own business' loan, to the six-figure tune almost identical in value to their new company Mercedes Benz AMG...
Ridiculous, most of "charity" (for the record: good ones exist, occassionally and early on [is typ.]) isn't anything more than tax write-offs and swindling.
----
>>2020 USD
I absolutely 'member how crazy those 2020 M2 charts were (i.e. money creation/turnover).
20 comments
[ 0.21 ms ] story [ 51.5 ms ] threadUS treasury bond yields are already dangerously high for the US and Japan selling treasuries would push yields up even higher, and could trigger more panic selling from others.
I guess this is Bessent's scheme to try and kick that can down the road.
so yeah if the yen pops - then the u.s will too given all the 'a.i' shenanigans & the market manipulation with oil.
but I guess the US Treasurer is willing to manipulate the market till they can't.
On x and reddit all I see are sky is falling posts.
Someone posted a zoomed up photo of a US official (can't recall who) of a notepad a few days ago saying "To do: Buy Yen 5Y - 10Y" or something similar
For some context here, it's worth mentioning the Yen carry trade [2]. This is actually relevant because it allegedly underpins the AI investment boom [3] and the Yen appreciating is a real problem for investors who borrowed Yen to invest, particularly if it's into a bubble that may well pop. It's a double shammy.
I'm wondering if this is going to be another George Soros moment. Soros famously broke the Bank of England who were trying to maintain a rate for the pound [4]. If massive AI investment is fueled on the Yen then there's a pretty big icentive to break the Yen by investors. This administration would normally be on board with that sort of thing (and actively profit from it) so it's not yet clear to me what's going on.
[1]: https://news.ycombinator.com/item?id=49119122
[2]: https://www.economicshelp.org/blog/glossary/yen-carry-trade/
[3]: https://www.businessinsider.com/yen-carry-trade-unwind-stock...
[4]: https://www.investopedia.com/ask/answers/08/george-soros-ban...
The Treasury’s intervention to bolster the yen is the first since 1998, when it bought the currency in order to strengthen Japan’s economy after the yen had dropped to eight-year lows. The US intervened in Japan’s currency in 2011 to weaken it as part of a co-ordinated international effort to prevent a dangerous currency appreciation after the Tohoku earthquake and tsunami.
(From TFA.)
The Asian Financial Crisis of the 1990s was one of several that occurred during that decade (also: the recession triggered by the 1st Gulf War 1992, the Mexican Peso crisis of 1994, the Russian financial crisis of 1998, and arguably the post-dot-com bust in 2001, stretching the decade just a tad). For those present at the time, the dot-com boom was a short-lived (though extravagent) interval, beginning in late 1998, spiking early 2000, and crashing out in early 2001.
<https://en.wikipedia.org/wiki/1997_Asian_financial_crisis>
I still have the tab (open from yesterday's /hn/) about Trickle Down Economics working as intended (which it obviously does, from a certain minority of the population's top-of-the-K-curve POV).
Honestly, this is a good strategic move for USA lifestyle status quo, given Japan does still hold a massive amount of US bonds / debt obligations (even though in the past decade it has been lessening its exposure to US debt instruments).
I believe 2026/2027 is the threshhold where USA interest (on our debt) is the top-line of our fiscal budget. #USA
----
This is not financial advice (I am a semi-retired datacenter ELECTRICIAN, as bluecollar as they come):
look at the top marketcaps now verse just a few years ago. Pre-Covid, a $2T$+ marketcap was a rare achievement (i.e. Saudi Aramco... which is sometimes not even Top 10 anymore!): now there are three companies that are solid $4T$+ marketcaps, sometimes flirting into $5T$ (a few days at a time).
Inflation is the only answer, from that same top-of-the-K POV. Gotta keep them assets 'tected, ya'll.
Or track gold. Artwork. Land. Anything Real, legally speaking (except soon/now: perhaps not SFH housing) #WhateverDawg
----
If you've been saving up for a house: right now you should really check out Michael Bordenaro's recent video on the topic of "Corporate Landlords shedding rental homes" [1] – I have no affiliation other than enjoying his almost-daily audio commentary – he is a former realtor (I went to college he sold houses) and his topics are extremely observant and varried.
Michael's self-shot walks helped inspire me to get in better shape (e.g. lose "dead parent" weight, lower BP, &c) and rejoin "the tanktop generation" (he is a bit younger than me, but I never grew up so...). |-30lbs|-12kg~|
Save until you can put down at least 20% (to avoid additional insurance fees), because in a-fifth of US states insurance is already going to cost more than property taxes (which is ridiculous)! [recalled from video, below; double-check my aging flesh memorybanks]. One in twelve SFHs are NOT insured, including mine (a rental); I also do not have personal rental insurance, as tenant, because I. do. not. care. #Mom&Pop
[1] <https://www.youtube.com/watch?v=0n8trvfUTZs> spec: 5m40s (for a list of companies net-shedding)
This isn't too dissimilar from when Spain plundered the new world for gold and silver. Which then inflated their local markets as there were only so many real goods to be bought, otherwise they paid off debt, and came out of that poorer and didn't have money to build ships. They were strong on paper until England challenged them.
US was strong on paper until it went after Iran. US is having it's Spain moment right now.
We pulled annual funding from something (which we were initially really proud of) after we discovered one of the physicians involved had "fulfilled" (i.e. borrowed and legally never repaid, per PPP's generous terms to business owners) their own business' loan, to the six-figure tune almost identical in value to their new company Mercedes Benz AMG...
Ridiculous, most of "charity" (for the record: good ones exist, occassionally and early on [is typ.]) isn't anything more than tax write-offs and swindling.
----
>>2020 USD
I absolutely 'member how crazy those 2020 M2 charts were (i.e. money creation/turnover).