/vt/ - Virtual Youtubers

>>59429409
>>59429455
>>59429578
>>59429713

There are ways to fight the devaluation of currency due to US absorbing all the currency's purchasing power back to US (which is evil btw). First one is
>raise the interest rate
Raise the interest rate of your country's national bank. This can make the investors stay instead of changing your currency to USD. But it can worsen inflation in your country because all the loans, including mortgage become way more expensive. A hike of 1-2% can make a lot of people default on loans which can cause a chain reaction. If a country raise their interest rate like US did, their economy would collapse in no time. So what's the other way to prevent devaluation of your currency? Another way is
>selling US bonds
By selling US bonds, you can get USD in return, and using those USD to buy back your own currency, due to the law of supply and demand, can increase the value of your currency. A bit complicated so you might want to read the sentence again.
Anyway, this was what Japan has been doing. Japan sold a lot of US bonds just to maintain the value of its currency. As you can see Japan has already sold a lot of US bonds.

So the question is: why is it now working now? The answer is 2 fold
1. Because 5% of interest rate is too much for yen to handle
2. US is stopping Japan from selling its bond anymore
Japan selling US' bond is basically asking US to pay its debt so of course US would not be happy. US need to raise more debts to fund the war so tiny Japs should know their place and stop demanding money from the US! The Japs have largely stopped the yen buyback since early this year which is why yen is devaluing more and more.