LaRouche: "Time to End the Yen Carry Trade" - Gives Full Support to Bank of Japan Chief Fukui on Hedge Funds Controls
June 1, 2007 (LPAC) -- Lyndon LaRouche has expressed his full support for the call last week by Bank of Japan Governor Toshihiko Fukui to impose new regulations on hedge funds, but went further to insist that "the very existence of hedge funds is insane," and that they should be eliminated. Noting that the Japanese have revealed over the past month that the yen carry trade has been [a:href="pages\/breaking_news\/2007\/05\/22\/japan_daily.shtml"]driven by hedge fund speculators[/a], LaRouche added that it is time for Japan to "end the carry trade altogether and raise interest rates to international levels." Continuing, he said that every time Japan postponed raising rates for fear it would undermine the international financial system, that system simply got worse. Finally, in pointing to his new writing, "[a:href="pages\/writings_files\/2007\/0601_survival.asp"]Rules of Survival[/a]," in the upcoming EIR, he reports on the full scale of the crisis and the necessary solution.
Forbes.com reported May 25 that Fukui had warned the Japanese Diet that direct controls by governments of the hedge funds is nearly impossible, because they are [a:href="http:\/\/www.larouchepub.com\/other\/2007\/3410caymans_hedges.html"]often registered in off-shore tax havens[/a]. International controls are therefore required, Fukui concluded, adding that the hedge fund method of leveraged borrowing must be traced in order to "grasp the whole picture," calling the hedge funds "close to a virtual world." He warned that the hedge funds have greatly increased the risk to the global system, and that this risk "could be explosive once it happens."