Aug. 02, 2012 - 12:06PM JST
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Scrote at Aug. 02, 2012 - 09:58AM JST
The government are incapable of controlling spending and bankruptcy is inevitable. The only alternative is they seize control of the Bank of Japan and create some hyper inflation. Either way, bondholders will get stuffed.
marcelito at Aug. 02, 2012 - 11:52AM JST
Yep, stopping the rampant bureaucratic wasteful spending that continues unabated all over the place would be a good first step. But hey , pigs will fly first.
Dog at Aug. 02, 2012 - 03:11PM JST
Not pubished domestically, but yesterday the Japanese government fell well short of selling all the bonds it wished on the domestic bond market.
Very worrying because there is no way the Japanese government can tap into the foreign bond markets without starting a hyper inflationary spiral with the plus 8% interest the foreign lenders would require.
Could be the beginning of the end.
ExportExpert at Aug. 02, 2012 - 07:16PM JST
Spread the word then DOG so the yen starts to crash and exports boom, only need another 5 - 10 years out of it, then im retiring
kchoze at Aug. 02, 2012 - 10:13PM JST
Drop it with hyper-inflation.
All cases of hyper inflation in history was accompanied with a collapse in the real production of the economy. In Germany after WWI, much of the production was given to foreign nations as reparations for WWI and the government printed money to support a general strike movement after the French occupied the Ruhr region (the heart of industrial Germany at the time). In Hungary at the end of WWII, the economy was destroyed by the Red Army's invasion. In Zimbabwe, ill-advised land redistribution depressed agricultural production in a country where 60% of the population works in agriculture.
So hyper-inflation is the result of two things:
1- a collapse in the real economy, in the amount of goods available for consumers (which is inflationary by default because of supply and demand)
2- a government that, generally for political reasons, decides to print money to compensate for this collapse, of course this can't work.
Japan is nowhere near to reaching either condition. Warnings of hyper-inflation are thus foolish. I know of no case where mere public debt caused hyper inflation in history. Between the two world wars, the UK had a public debt of 175% of GDP, more or less. After WWII, it peaked at 250% of GDP. The Pound never suffered from hyper inflation nonetheless.
As long as Japan remains a manufacturing powerhouse and the rest of the world consumes its production, even if the government prints Yen to finance its debt, it will never face hyper inflation, at best higher inflation and devaluation on the global markets (which wouldn't be a bad thing currently).
crack123 at Aug. 04, 2012 - 03:41PM JST
Spain needs more than €500.000 million. The situation required a Europe coordination actions. Good analysis from Spain, (in Spanish): http://www.miguelangeldiez.com
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