For over 50 years, oneparty ruled Japan virtually uninterrupted. During that time, Japanremained a loyal ally and supporter of U.S. policy. This month, ahistoric event took place.
Japan has newleadership. In a landslide victory, a new party has done the seeminglyimpossible. A new freshman class of leaders now governs the Land of theRising Sun. The effects are already rippling across the Pacific towardAmerica.
Yukio Hatoyama is Japan’s new leader. He officially took office last Wednesday, and he is already threatening to split with the United States.
Hatoyama blames America for the global economic crisis and says that the U.S. is responsible for “the destruction of human dignity.” He campaigned on protecting traditional Japanese economic activities and reducing U.S.-led globalization.
During the run-up to the election, Hatoyama’s finance minister told the BBC he was worried about the future value of the dollar,refuse to purchase any more U.S. treasuries unless they were denominated in Japanese yen, and that if his party were elected in the upcoming national elections, it would refuse to purchase any more U.S. treasuries unless they were denominated in Japanese yen.
Japan is the world’s second-largest economy. It is also America’s second-most-important creditor. The U.S. government owes Japan over $724 billion! The only nation America owes more money to is China ($800 billion). The U.S. also imports $140 billion worth of goods from Japan each year.
If Japan were to followthrough with its threat to only lend in yen, the dollar would probablyfall hard. What would that mean? America gets more expensive consumergoods, higher unemployment, and currency inflation. If other nationslike China follow suit, we would be looking at a currencycrisis—Zimbabwe-style.
EAU does not support all opinions and viewpoints in ‘Japan Abandons America.’