I don't know what your paying for mid-grade 89 octane gasoline in New Jersey? Here in Ohio we are currently paying around $1.40. As we know the Japanese are dependent on oil imports; so a strong yen isn't going to hurt them on that account.
Another piece of the puzzle,
Tom Lehman
Rakesh Bhandari wrote:
> Doug honestly considers the bleak possibilities:
>
> >U.S. military and political power puts a limit on how much we could
> >be foreclosed upon, but still the country could suffer a capital
> >outflow and be powerless to do anything about it except raise
> >interest rates.
>
> The US status as reserve center also puts some kind of limit. In a review
> of a book in defense of hard industries in the New York Times Book Review
> last week, James Galbraith emphasised the need for an honest study of the
> bases of US imperial power. It would have to be a political economic study
> with attention to a. strategic technological power, b. the US status as
> reserve center, c. the use of the threat of protectionism of the world's
> biggest market to win concession, d. the mercenary nature of its singularly
> world class military (for the Sauds, Germany, Japan).
>
> Long ago, I responded to Seth's suggestion that China, the world's second
> biggest holder of dollars (?), could simply decide to dump them by noting
> that China would have to consider the threat of its losing its biggest
> market just as internal accumulation is weakening and expect that the US
> would apply military pressure at several points: assistance to India
> towards nuclear parity, support of Taiwanese independence, greater pressure
> on North Korea, etc. The strike on the Chinese Embassy in Serbia is a
> powerful reminder of this possibility. It seems to me that the US has China
> by the balls. The question is how wide it can open its market and how hard
> it can force the rationalisation of state owned enterprises.
>
> At the same time, the US is indeed vulnerable as I think much more of the
> debt now held by foreigners is in short term securities. And desperate
> needs to recapitalize banks or pay off corporate debts in the wake of a
> severe dowturn in an economically important country could induce
> substantial repatriations of capital despite the pressure applied by the
> US--my point here is that we should not underestimate how violent and
> aggressive the US response can and will be. It does seem to me however
> that the chain will be broken first in Japan or Germany. However, since
> the US is clearly relatively stronger, it has become the site of so much
> speculative excess (and thus racked up unbeliveable foreign debt) that the
> most violent corrections may come first on Wall Street (raising the
> question of whether the wealth effect will be stronger this time than in
> 1986); or perhaps the dollar will resume again an upward march after the
> pseudo recovery in Japan dissipates and US exporters will be killed off (so
> Greenspan, Microsoft Pres whatever is name is trying to cool the assets
> market off).
>
> There are so many breaking points presently I find it astonishing that
> there has not yet been catastrophe and breakdown.
>
> Interesting study by FR Hansen Breakdown of Capitalism; our very own Jim O
> Connor and Paul Mattick, Sr. are treated in detail.
>
> Yours, Rakesh