tax cut

[Brad Mayer]

Betcha they wouldn't.  There's no causal economic linkage between Japanese 
(or anybody elses') commodity exports to the US, and their export of 
surplus financial capital to the US in the form of US Treasury bond 
holdings.  The only causal connection of economic significance that I can 
see is if they were to actually move to liquidate the mountain of 
bank/corporate debt in Japan.  But that's exactly what Tokyo and its banks 
won't do.  Neither did they during the last recession, despite massive 
losses in their US real estate and financial holdings.

-Brad Mayer
Oakland, CA


>I brought up the likely effect on the rest of the world, but he didn't seem
>too worried. Maybe that was me misreading him. As I see it, the effect on
>Japan alone could feed back on the US in a really ugly way. Taggart Murphy
>argued that if Japanese exports to the US collapsed, it might force the
>Japanese to suddenly repatriate their trillions of dollars in Treasury bonds
>back into yen. In other words, it wouldn't just be a question of a halt in
>fresh US capital inflows; it could end up with foreigners liquidating their
>existing stock of US assets.
>Seth