Implications on U.S. inflation of Yuan/Yen trading (May 27th 2012)

From May 27th 2012

Correct me if I’m wrong but on a combined basis (import/export) wouldn’t that be about $342bn heading straight back into the U.S.?

Where else is it going to go? Russia? Brazil? I think not.

Now $342bn doesn’t sound a lot against annualised U.S. deficits of $1.2trillion but how much of that $342bn will be in M2? In other words over the next 12 months is the U.S. about to face an inbound avalanche of inflation producing cash (and credit)?

Will the FED need to go QE3 with all this cash about to return home?

I don’t think the media economists have thought through the implications of this yet, given the emphasis on the Euro and the (looming) Iran issue.


one trillion Japanese yen = 12.55600 billion U.S. dollars
12.48ty + 14.78ty = 27.26ty x $12.556bn = $342.27bn gross transaction value.

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