Over the weekend, Junichiro Koizumi's LDP was re-elected in what we Americans would call, a landslide. By virtue thereof, Koizumi-san has decided that he now has a mandate. To do what? you might be asking. To privatize Japan Post, which just happens to be where much of Japan's savings deposits are held. According to the Guardian, the total is 330Tln Yen or $3Tln, a little less than half the entire US national debt.
Now I don't know what Koizumi-san has up his sleeve but it seems to me that taking control of that huge pile of savings from the MoF (Ministry of Finance) and giving it to some of the Japanese banks might lead to changes in international capital flows. Who knows, maybe with the private sector apparently a little less willing to buy up our debt, this shift in control might lead to a shift in demand of US debt instruments, or even (gasp!) outright selling.
Things just look downright ugly for Uncle Buck ($), too bad nobody has the heart to break the news.