Money and Metals

A guest editorial in the Asia Times by Antal E Fekete discusses the possibility of BOJ/Fed collusion to prop up the dollar. " The (BOJ) is buying US Treasury paper through the good offices of the (Fed) over and above the deficit America is running in its trade accounts with Japan". Though not the first to suggest this arrangement, the author voices a now-rare opinion that lower interest rates may be ahead, as a result of the scheme. " (Will)the attempt to save the dollar will be through the shock therapy of ultra-low interest rates, clandestinely administered by Greenspan?"

The BOJ would no doubt prefer such a route as it would produce a windfall in its US Treasury bond position. But as the author points out, the resulting deflation would put the US in a serious economic depression.