Older story here, but it didn’t get much press that I saw – Caroline B sent me this a while ago. Aiko Mikuni – of Japanese credit rating agency Mikuni & Company – has some very harsh words for the US economy. He starts out by suggesting Japan should write off its US treasuries:
The dollar may lose as much as 40 percent of its value to 50 yen or 60 yen from the current spot rate of 90.40 today in Tokyo unless Japan takes “drastic measures” to help bail out the U.S. economy, Mikuni said. Treasury yields, which are near record lows, may fall further without debt relief, making it difficult for the U.S. to borrow elsewhere, Mikuni said.
“It’s difficult for the U.S. to borrow its way out of this problem,” Mikuni, 69, said in an interview with Bloomberg Television broadcast today. “Japan can help by extending debt cancellations.”
His other suggestion – invest in US roads and bridges, since they do suck pretty hard, and we’re unlikely to be adverse to it considering we like to sell off our toll roads and such to foreign investors anyway:
The Japanese government could use a new Marshall Plan as a chance to shrink its $976.9 billion in foreign-exchange reserves, the world’s second-largest after China’s, and help reduce global economic imbalances, Mikuni said.
Marshall Plan 2! Electric Boogaloo!
What would it be like to live in a country that had a trillion dollars lying around that it needed to get rid of? I cannot even imagine.
jesse // Jan 4, 2009 at 11:20 am
Tender treasuries and in return get what exactly? Yen, or dollars, or maybe US cars?
CB // Jan 4, 2009 at 9:08 pm
jesse, how bout shares in a Myrtle Beach theme park?
Mark Dowling // Jan 6, 2009 at 4:10 pm
@Jesse – how about US nuclear submarines? It’s probably the only asset not completely knackered. They could hook them up to the Japanese electric grid to replace imported oil (and totally not as a signal to the Chinese that they are not to be messed with)