Daretoth (< 20)

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A Question About The U.S. Dollar

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December 12, 2008 – Comments (5) | RELATED TICKERS: SFK

Can someone please explain to me how of all the other currencies in the world the dollar is losing to a country that has a 200% debt to GDP ratio?

5 Comments – Post Your Own

#1) On December 12, 2008 at 2:32 AM, starbucks4ever (99.63) wrote:

Japanese are the stupedest investors in the world. When deflation started in Japan, they were happy to lend to their government for a 1% yield. The government accumulated a guargantuan debt which costs them virtually nothing to service, so their debt load is thought to be very manageable.

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#2) On December 12, 2008 at 3:32 AM, DemonDoug (99.69) wrote:

short covering. the yen for many many years had the cheapest interest rate, so people would borrow yen, and buy currencies in higher yielding countries (for example, new zealand), and collect interest.

Now, all those bets are becoming losing propositions, hence the yen rise.

it's called the "yen carry trade" and you should google it and educate yourself on it.

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#3) On December 12, 2008 at 3:44 AM, DaretothREdux (53.86) wrote:

Thanks a lot DemonDoug I will definitely do that.

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#4) On December 12, 2008 at 4:21 AM, jgseattle (87.08) wrote:

the next carry trade is going to be the dollar to ????

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#5) On December 12, 2008 at 6:22 PM, Daretoth (< 20) wrote:

So, if we lower interest rates to zero would that completely screw up trillions of dollars of investments in U.S. T-bonds from the Japanese? And would people start doing the same thing with the U.S. dollar?

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