Hatoyama’s New Path and Washington’s Anxiety

[pa28]

"On August 26, election fever had hit Japan, and an op-ed signed by Democratic Party of Japan (DPJ) leader Yukio Hatoyama appeared in the International Herald Tribune (IHT) Asian edition and the New York Times website. The piece elicited anxiety and criticism from some Japan watchers, especially in policymaking and media circles in Washington."

http://www.eastasiaforum.org/2009/09/06/hatoyamas-new-path-and-washingtons-anxiety/

Incoming PM Hatoyama zeroed in on American style market fundamentalism, the war in Iraq, declining American influence and the end of our economic hegemony. He also took issue with dollar as world reserve currency and hinted at an Asian economic union.

"I also feel that as a result of the failure of the Iraq war and the financial crisis, the era of U.S.-led globalism is coming to an end and that we are moving toward an era of multipolarity. But at present no one country is ready to replace the United States as the dominant country. Nor is there a currency ready to replace the dollar as the world’s key currency. Although the influence of the U.S. is declining, it will remain the world’s leading military and economic power for the next two to three decades."

Here is the original OpEd:

http://www.nytimes.com/2009/08/27/opinion/27iht-edhatoyama.html?_r=1

Anyway, this piece took me by surprise. Very short, very cutting, at times thought provoking and surprisingly undiplomatic. Under Hatoyama it looks like Japan is going to be pragmatic about it's relationship with the U.S. and cut us dead if necessary. You have to believe others feel the same way but are not willing to say so as plainly.

[wuvuj]

1. China net seller...

http://www.moneyandmarkets.com/china-is-now-a-net-seller-of-us-treasury-notes-and-bonds-2-35365


Just a few days ago, the U.S. Treasury Department revealed that China actually REDUCED its note and bond holdings by $25 billion in June. Although China did NOT sell shorter-term Treasury bills — and isn’t expected to — it’s still the largest amount of Treasuries China has ever sold in a single month.

This is a huge development:

* In 2006, China and Hong Kong accounted for more than 50 percent of the increase in the amount of Treasury debt sold to the public …

* In 2008, their share had fallen to 22 percent as the U.S. government increased its public debt by a record $1.2 trillion …

* In the first half of THIS year, China and Hong Kong acquired only 9 percent of the more than $800 billion worth of Treasury bonds that were sold — and now …

* In June, China became a net SELLER of U.S. Treasury notes and bonds!