A bank account in Japan would yield about half a percent a year, compared with about 5 percent in the United States or 10 percent or more in some other countries. This dynamic meant firms with the know-how and financial dexterity could borrow yen in Japan—practically for free—and invest it in other assets with higher interest rates, such as bonds, commodities, or other currencies. And the extra cash that kicked out could be deployed into even more investments, such as commodities or subprime mortgages. Add a healthy dose of leverage, and you have a perfect recipe for a worldwide speculative
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