Fantastic write-up. Sorry ...i know the cardinal sin of the internet is coming to a story years late (very common for me...) but when you say, in contrasting the China model (closed capital account, captive bank directed lending mandates pushing up debt), versus Japanese Model (open economy weaker yen depriving citizens wealth preservation) and that " [Japanese] also hasn’t attracted the increase in debt".....is that true? Forbes : https://youtu.be/Kq2-k9jtlBw?t=165
t=165 seconds Forbes makes very interesting comment: "Japan should stop making a big basic mistake when it uses dollars to buy yen in the foreign exchange markets [because] after it buys the yen it then effectively reintroduces those yen back into its economy [via the carry trade]" !
The short yen position in the "carry trade" is JAPANESE DEBT GOING UP IN A WAY....THEY LEND YEN INTO EXISTENCE JUST LIKE A BANK DEBT, no?
If this Forbes idea is correct, then the theatrics of Bessent's "Yen Purchase" is just smoke and mirrors b/c the "carry trade" is ALWAYS OPEN. Yen creation just happens right away....what's the point of buying Yen with Dollars....or Euros as Bessent did......(classic trump stupidism).
Very fascinating topic. Your write up is a keeper. {apologies for late bothering you....you don't have to respond....but thanks again.}
This is true, a large part of the reason BRI exists is because of how it absorbs excess capacity at home.
Given the nature of some of the projects however, I would still suggest that it is also a way of projecting power - especially in development of deep water ports.
Fantastic write-up. Sorry ...i know the cardinal sin of the internet is coming to a story years late (very common for me...) but when you say, in contrasting the China model (closed capital account, captive bank directed lending mandates pushing up debt), versus Japanese Model (open economy weaker yen depriving citizens wealth preservation) and that " [Japanese] also hasn’t attracted the increase in debt".....is that true? Forbes : https://youtu.be/Kq2-k9jtlBw?t=165
t=165 seconds Forbes makes very interesting comment: "Japan should stop making a big basic mistake when it uses dollars to buy yen in the foreign exchange markets [because] after it buys the yen it then effectively reintroduces those yen back into its economy [via the carry trade]" !
The short yen position in the "carry trade" is JAPANESE DEBT GOING UP IN A WAY....THEY LEND YEN INTO EXISTENCE JUST LIKE A BANK DEBT, no?
If this Forbes idea is correct, then the theatrics of Bessent's "Yen Purchase" is just smoke and mirrors b/c the "carry trade" is ALWAYS OPEN. Yen creation just happens right away....what's the point of buying Yen with Dollars....or Euros as Bessent did......(classic trump stupidism).
Very fascinating topic. Your write up is a keeper. {apologies for late bothering you....you don't have to respond....but thanks again.}
This is true, a large part of the reason BRI exists is because of how it absorbs excess capacity at home.
Given the nature of some of the projects however, I would still suggest that it is also a way of projecting power - especially in development of deep water ports.