In essence, by imposing the U.S. Dollar as a reserve currency on the rest of the world, the United States extracts an imperial tax from dollar holders, that is to say, from those countries that hold U.S. dollars as reserves, including U.S. government bonds. In this sense, from an economic point of view, over the last 3-4 decades, Japan has been the “best” American vassal that has cumulatively contributed probably the largest amount of tribute into the American coffers. If the Japanese themselves were able to raise the status of the Japanese Yen to a major reserve currency of the world and reduce or remove the dollar as their reserve currency, then they will be able to transform themselves from an American vassal into an empire, a Yen Empire with all the benefits and privileges that an empire confers. This is not to say that Japan will create the most powerful empire in the world, for this is China’s destiny, but it is nevertheless far better to extract tribute from others instead of paying them.
Sep 20, 2007