Chronicles Of Depression 2.0: #426: Unthinkable

Japan economists call for ‘Obama bonds’

TOKYO – Japanese economists, increasingly concerned that the United States might seek to pay its enormous and growing debt obligations in a weakened US dollar, are looking to the possibility of US Treasuries being issued in yen.

Emphasis added by me.

Stop reading. Re-read that. Let it sink in.

“There is no wonder the dollar will weaken,” said Eisuke Sakakibara, Japan’s former top currency official and now a professor at Waseda University. “The dollar now looks strong for a technical reason. The money the US financial firms had invested in the world is being repatriated into the homeland, causing dollar-buying. But once this conversion into the dollars is done, the currency will head south,” Sakakibara said at a forum in Tokyo on Sunday.

Faced with the unprecedented growth of the US budget deficit and the prospect of an increasingly weaker dollar compared with the yen reducing the value of Treasury debt held by Japan, economists in Tokyo are calling for the administration of president-elect Barack Obama to issue US Treasuries denominated in yen and other currencies. The issuance of foreign currency-denominated US Treasures would reduce the perceived risk of holding the debt.

Emphasis added by me.

This I didn’t know:

The idea of issuing foreign currency-denominated US Treasures is not new. The Jimmy Carter administration, buffeted by the two oil crises of the 1970s, sold “Carter bonds”, denominated in German marks and Swiss francs, in 1978 to attract foreign investors into Treasuries.

“The US will be forced to issue foreign currency-denominated US Treasures in its hour of need,” said Mizuno. “The US cannot finance its deficit by itself. The US financial system cannot survive without foreign investors. We will see ‘Obama Bonds’ in the future.

Emphasis added by me.

I didn’t know that had happened under Carter’s spineless Administration. I wasn’t paying attention to the financial markets then. But it figures! He was the pinnacle of 1970s-era shit on a stick.

“Obama bonds.” What scares me is that when I realized Obama had become Inevitable, I saw in my mind something called “Obama Bucks” foir dealing with Depression 2.0.

Explore posts in the same categories: C.O.A.T. - Belief, C.O.A.T. - Money, C.O.A.T. - Politics, C.O.A.T. - Scams, Depression 2.0

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