PILKINGTION: A User's Guide to the Looming Collapse of the US Dollar System
Japan could well be the assassination in Sarajevo moment for US dollar hegemony. Here's how it could work -- and why the Trump Administration is desperately trying to prop up the Yen.
Japan looks like the canary in the coal mine. The country has lost control over its exchange rate. On 31 July, US Treasury Secretary Scott Bessent announced that he would throw Tokyo a lifeline in the form of a $53 billion bailout. Back in April-May, the US Treasury had engaged in an even larger bailout of around $73.5 billion; however, the latest intervention was much better advertised, with a photo ‘leaking’ of Bessent’s To-Do list that included buying yen.
The yen shot up after the intervention from around ¥0.0061 per USD to ¥0.0064. The effect was short-lived. Less than two weeks later, the yen is trading at ¥0.0063, meaning it has given up a third of its gains. The previous intervention was likewise short-lived. It all suggests that Bessent is trying to fight economic gravity.
What creates the gravity well?
