Sunday, August 30, 2009

The answer I’d like to know (Japan/USA)

That story back in June 2009 (I cannot find any further information as what has been determined)

Two Japanese caught smuggling US bonds worth $134.5 billion

was it due to someone very smart trying to get rid of US bonds at the best possible price because the outcome of elections was predictable?  And possible unfavorable development for US debt owned by Japan is yet to come?  And if new Japan’s ruling party is determined to treat China not as traditional enemy, but friend – will Chinese debt owners to follow Japan’s suit?

If any of these questions will ever be answered – for me, the best answer would be rally in the USD.

No matter how much FED would love to inflate their way out of international obligations – the worse outcome would be to allow [what some dimwits in USA think] “3rd world countries” to dump US Treasuries with the speed comparable only to rush of crowd when the fire breaks in movie theater.