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Old 10-22-2009, 08:03 AM   #11
KJnbceja

Join Date
Oct 2005
Posts
435
Senior Member
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This is the stuff of nightmares:
http://www.nytimes.com/2009/10/21/bu...l?ref=business


Here is my question after reading this:


If Japan runs out of lenders for it to borrow money (right now it relies mainly on its own population for cash), it could trigger a currency crisis in Japan and force Japan to sell off investments it owns to raise cash.


One of the largest national assets Japan holds is U.S. bonds (Treasury debt). If Japan dumps its bonds and cuts off reserve purchases to keep their spending machine operating, that could trigger the same behavior in our own country, which will then grow and ensnare more deficit-running countries such as ours.



Sovereign bond prices in the US would crash and drive up yields to astronomical highs, making more borrowing by the Treasury, and Congress, impossible.


It's a deadly timebomb waiting to go off.
Deadly?.. how so?
Deadly is such an ugly word.
KJnbceja is offline


 

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