The Japanese authorities have recently started selling their US Treasuries in a bid to save their currency, the Yen, which has been in steady decline of late.
This is yet more massive news and will have enormous ramifications in the world.
But bef…
The Japanese authorities have recently started selling their US Treasuries in a bid to save their currency, the Yen, which has been in steady decline of late.
This is yet more massive news and will have enormous ramifications in the world.
But before we get into talking about this, I need to provide you with some very important background information.
Since the setting up of the Bretton Woods System in July 1944, towards the end of World War II, the US has been the dominant force in the world in terms of Finance etc.
This Financial dominance constitutes one crucial aspect of the American Empire. There are other aspects which I won’t go into, but I’ve done a whole series of videos on Empires which can be found in the playlist.
the World Reserve Currency status and the Petro-Dollar System
I should say that there are two things have kept the Dollar, and hence the US, in such a privileged position since the middle of the 20th Century - the World Reserve Currency status and the Petro-Dollar System.
So let’s have a quick look at the first f these … the World Reserve Status
The Dollar’s strength derives in no small measure due its having the World Reserve Status.
The WRC is important because it gives a currency superpowers - superpowers which are hard to detect by first appearances. The WRC requires that all international trades are transacted in Dollars. This artificially raises the demand for the Dollar because every country and company that trades internationally is obliged to hold Dollars in reserve. To say this another way, this puts upward pressure on the demand for the Dollar. Increased demand, ensures increased value.
