[…] One said: “This has never happened before.”
Selling dollars to defend the yen would have contradicted Bessent’s strong-dollar policy. Selling euros avoided that problem. But selling a European asset to defend an Asian currency to protect an American bond market, without consulting the institution whose asset was sold, is not a currency intervention. It is the reserve architecture consuming the alliance architecture.
The reason Washington intervened at all is the part nobody wants to say plainly. Japan is the largest foreign holder of US Treasuries. The yen was at its weakest since 1986. If the yen falls far enough, Japanese institutions sell their most liquid foreign asset to raise cash. That asset is Treasuries. The selling pushes American yields higher at the exact moment the thirty-year just touched 5.28 percent. Washington did not intervene to help Japan. Washington intervened to prevent the Treasury market from absorbing a forced seller at a nineteen-year high in yields.
The convention that was broken to execute this trade is the same kind of convention the reserve confiscation broke in 2022. That one taught central banks their dollar reserves were not safe from seizure. This one taught the ECB that dollar-system cooperation is not safe from unilateral action by its architect. Both lessons point the same direction: build the alternatives faster.
The fix is eating the architecture it was built to preserve.
ecb should dump their yen to be messy
White supremacy is the black hole at the centre of liberal thought; never directly visible, but always observable in how it warps the fabric of every other thought around itself.
🦁🫸💭🐑
That’s quite good, I like that as much as earth astronaut gun astronaut moon
✨🌎✨🧑🚀🔫👩🚀🌕✨
ok, do something about it
Well this will worsen the prospects of buying treasuries forever
A good example of how long shit like this takes which we have a mutual frame of reference for would be Iran picking up Chinese geolocation tech two decades after the incident where the US shut off GPS for one of their shipments to Iran (claiming they were bringing them terrorism supplies of course waow) for the first time.
Could you spare two decades for a kindhearted regimer? Two nice weeks maybe??
But muh Civility and western values?!?!?!?
![The United States sold euros to buy yen without telling the ECB until after the trade was done. Senior ECB officials called it “an unprecedented breach of longstanding conventions.” [...]](https://hexbear.net/pictrs/image/b6eecd15-e838-4c40-ae67-0e1eeaeab19d.jpeg){kind=link}