Ganesh Sastri

China, The Yuan and U.S. Indebtedness

Instead of fretting and fuming over the safety of debt from US, China should simply ask that its debt be denominated in YUAN. China will be protected if the value of Yuan stays or goes up. If the value of Yuan goes down, it has to blame only itself.
US needs to move from being the LARGEST DEBTOR. It should RAISE interest rates and encourage savings both at the micro level and national level if it means busines..

Dollar Could Be Headed to 13 Year Low Against the Yen

If you keep printing new currency you cannot expect its value to be stable. Experience with other nations has shown that currencies which have expanded and expanded or had trade deficits year after year have fallen by significant amounts. The recent rise in value of USD is surprising. I will not be surprised if the value of dollar suddenly collapses by 80% against stronger currencies in the world like JPY or precious metals whose supply is not as elastic as USD. USD at 20 JPY? Possible in the not too distant future.

The Budget Deficit and Declining Dollar

1. The article says: am in no way saying the US will default on its debt soon as Russia did in 90’s. In the short run, that outcome is virtually impossible
The US is already defaulting. Look at the billions being writtne off by UBS, Barclays, RBS, BNP, Credit Suisee etc etc.
2. Why nobody is talking of budget SURPLUS? In the late nineties, Clinton ran a few years with surpluses and stopped borrowing on Long Bond.
3. If you want to reduce trade deficit you need to increase per person PRODUCTIVITY or reduce wages in US. Lowering the exchange rate of US dollar does that. If you don't want to reduce exchange rates be willing to increase interest rates and / or reduce wages.