Is there a currency worth the paper it's printed on?

Since the onset of the financial market meltdown, which began in the US equity sector and then filtered around the globe, one of the major currencies that managed to appreciate significantly rather than depreciate was the Japanese Yen.  You may ask yourself however…does this make sense?  The answer on a pure traditional fundamental basis involving current account balance and national debt scenario is NO.  Japan seems to be viewed as the safe haven through all the real estate and subprime fallout but reality is that this once great global economy (still number two in the world) has been built on a mountain of national debt that was created to inflate the economy out of a more than decade recession.

What the media has failed to communicate for years now is that the national debt of Japan has been the size of the new US national debt AFTER THE BAILOUTS of Fannie Mae and Freddie Mac and additional funding.  Additionally, Japanese interest rates have been near zero for numerous years at the longer end of their treasury curve.

So in case you think Japan has been doing something right…forget about it.  Recent Yen appreciation is more the result of unwinding of massive hedge fund carry trades.  So what currency is worth anything now?  Let me take a few months to try and figure it out because at face value…there is none.  Just a lot of printed and colorfully designed paper out there the value of which is built on perception and hope.