Following up on The Dollar post from earlier, from Bloomberg: Japan Should Scrap U.S. Debt; Dollar May Plummet, Mikuni Says. Mikuni being Akio Mikuni, the president of credit ratings agency Mikuni & Co.
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.
“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.
It’s an interesting (and short) article.
While it many have suggested that increasing the money supply through monetary policy and deficit fiscal spending can spur growth in the economy, it begs the question, how much debt can the United States Government maintain before it loses control of interest rates or the currency?