[lbo-talk] [Fwd: Why the World Needs a Weaker Dollar]

Michael Pollak mpollak at panix.com
Sun Nov 21 11:38:56 PST 2004


On Sun, 21 Nov 2004, Miles Jackson wrote:


> I don't get something about this economic arrangement: what's to stop
> China and Japan from gradually shifting their assets from U. S. bonds to
> other assets (say, euro-bonds)?

Arguably doing it gradually would be just what the doctor ordered for the US and the world, with the emphasis on gradual.

The limit lies in the needs of their own export oriented economies, which mainly export to the US. The more they make this switch, the more they lose US market share to Europeans.

That doesn't mean a stamped or an avalanche couldn't happen. But right now these countries don't want it to happen any more than the US does. That's what's holding it up.

Michael



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