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sphtoday at 1:02 PM1 replyview on HN

Don’t forget the EUR side to the operation. US is helping Japan by selling Euros. The big question whether this is a sensible bet.


Replies

eigenspacetoday at 1:09 PM

As a European, I'm somewhat sensitive to that side of things, but if you look at the USD-EUR exchange rates, the Euro has only strengthened against the USD since this happened.

I guess it's just not a big enough shift to change the overall USD-EUR dynamics. Plus, I think a lot of the Eurozone wouldn't actually mind if the Euro weakened a litte, even if it'd make the current energy price problems worse.

But even if the USD did liquidate enough Euros to shift the dynamics, and if this was decided to be a bad thing, the Eurozone countries hold way more US treasuries than Japan, and could just sell those if they wanted to, which could quickly bring things back into balance, and would be a major deterrent against the US.