Tuesday, December 23, 2008

Japan Should Write-Off U.S. Debt? That Sounds Like National Default to Me...

Evidently the Japanese know how to do math better than our own officials… Perhaps we’re closer to national debt default than most people thought? People have been ignoring what I’ve repeatedly said about the math. It’s coming in some form, as the debts that the banks should have been forced to default upon were forced onto the public roles. That debt cannot be serviced and will be defaulted upon at some point. Working around the debt or deflating it away will not work. This statement should be taken very seriously. How will our other debt holders react to such a proposal? Who will finance our future debts once we have defaulted?

Still think this is a great monetary system? Not me, and we need to get busy coming up with solutions that will work over the long haul, not just to some Wall Streeter’s next bonus. Future solutions must work for the people, not the central bankers who have NO BUSINESS being in control of America’s finances.
Japan Should Scrap U.S. Debt; Dollar May Plummet, Mikuni Says

By Stanley White and Shigeki Nozawa

Dec. 24 (Bloomberg) -- Japan should write-off its holdings of Treasuries because the U.S. government will struggle to finance increasing debt levels needed to dig the economy out of recession, said Akio Mikuni, president of credit ratings agency Mikuni & Co.
The dollar may lose as much as 40 percent of its value to 50 yen or 60 yen from the current spot rate of 90.40 today in Tokyo unless Japan takes “drastic measures” to help bail out the U.S. economy, Mikuni said. Treasury yields, which are near record lows, may fall further without debt relief, making it difficult for the U.S. to borrow elsewhere, Mikuni said.

“It’s difficult for the U.S. to borrow its way out of this problem,” Mikuni, 69, said in an interview with Bloomberg Television broadcast today. “Japan can help by extending debt cancellations.”

The U.S. budget deficit may swell to at least $1 trillion this fiscal year as policy makers flood the country with $8.5 trillion through 23 different programs to combat the worst recession since the Great Depression. Japan is the world’s second-biggest foreign holder of Treasuries after China.

The rest of this article can be found here: http://www.bloomberg.com/apps/news?pid=20601087&sid=aFgHlh.Dn4Lc&refer=home