David Barsan_

New Rules for Global Investing in 2007

wonderful article about many different global economic themes. I would like some clarification on something, if you would....

You spoke about the fact that Tokyo wouldn't increase rates because of the increased debt payments they would make. If everyone is borrowing yen right now because of the low interest rates, and the BoJ raised rates, they would obviously collect more from those who are borrowing. Would this not offset the increase in payments they make on their national debt, or is the thought that by raising their rates, it would slow down the yen-carry trade too much??

Hope my question was clear enough because I'd love your feedback. thanks again for the interesting article.