Yen Carry Trade On The Brink: OECD Warns Japan Not To Raise Rates

24 de may de 2007

<body><div id="article"><tr><td height="28" valign="middle" width="184"></td><td valign="middle" width="185"></td></tr><h1>Yen Carry Trade On The Brink: OECD Warns Japan Not To Raise Rates</h1><p>May 24 (LPAC) - With the Japanese institutions threatening to end the hedge funds behind the yen carry trade (see the) , the NATO-connected "Organization for Economic Cooperations and Development" (OECD) issued a report saying: "The Bank of Japan should not raise the short-term policy interest rate further, until inflation is firmly positive and the risk of renewed deflation becomes negligible." The OECD worry is clearly not inflation, but the deadly threat to the hedge funds if Japan carries through with threats to end the speculation in cheap yen.</p><p>Lyndon LaRouche warned in February that the yen carry trade was in big trouble, and that "the multiplier effect of the blowout of the carry trade is going to mean that the crisis hits with a magnitude far beyond any individual nation or currency. This will bring down the whole post-Bretton Woods floating exchange rate system." But LaRouche added, "Let it happen. The system is doomed under any circumstances, and we know what must be done to create a new, stable financial system, based on the principles of Franklin Roosevelt's original Bretton Woods System. I am ready with a recipe for precisely how to solve this crisis. Are you?"</p></div></body>