How Long Will This Keep Going On?

What I’m referring to, of course, is the seemingly endless purchases of US dollars by Japan. (Isn’t that the first thing that came to your head?) This week’s Buttonwood column in The Economist elaborates on the point that I made yesterday about the self-contradictory G-7 communiqué regarding currency interventions, starting with this:

A CAMEL, goes the old saw, is a horse designed by a committee. What that makes this weekend’s statement by the Group of Seven (G7) finance ministers and central bankers is anyone’s guess, but a duck-billed platypus is Buttonwood’s offering.

They end the column asking the question we’ve all repeatedly asked: how long can the current state of affairs – with Japan keeping the dollar strong through enormous purchases of US dollars – continue? The question matters, because right now the purchases of US debt by Japan (and to a lesser degree, China) is having a major effect on the US economy. As one of today’s columns in CNN/ says: “Like low rates? Thank Japan.”