Commodities, Gold, global Currencies are not priced Japanese
Yen. But then, why is the Japanese Yen being strengthening
against the US dollar since it was free floated?
This proved that it does not matter whether the whole world is
priced in US dollar. The global system somehow requires a
depreciating US dollar. Analysts provided reasons for this
trend. whatever.
As USA is a net debtor superpower country, a depreciating US
dollar is to their advantage. They could print a lot of money
because they are a super power. as they print, they get a
weaker US dollar which also means the creditors lose in terms of
currency. till now, creditors have financed the US by buying
the US debts because etc etc...long list of reasons.
thats why, the US central bank knew that creditors might not
finance the USA indefinitely just as what China is saying now.
So the US central bank said they (US central bank) would buy
the US Treasuries themselves. The big question is, when such
thing happens, where would the US dollar go, up or down?
Thanks. I thought that was very refreshing.. :)
I could think of a few reasons for a strengthening yen.
- the yen carry trade.
- the increased demand in japanese technologies as opposed to
the US. (cars, tv, dvd player, aircon etc.), meaning a demand for
japanese yen?
