Courtesy of Vitaliy N. Katsenelson:
Japan is suffering from growing expenditures and declining tax revenues. Their population is both aging and declining with a debt to GDP ratio of 197%, second in the world only to Zimbabwe!
The government has accumulated 637 TRILLION Yen in Bond debt at the same time as household savings has been falling from 12% in the late 1990′s to less than 2% today. These are frightening statistics and it begs the question – What happens when Japan can no longer finance their debt internally? Will they begin to compete with the US and Europe for investment capital?
How will that affect global bond rates and, most importantly – how do we make money off it? Have I mentioned I like TBT lately? I also like Vitaliy, who sends me tons of good stuff so I’m making up for not posting him more often by catching up a little:
- Vitaliy also has this overview on our steroid-enhanced economy.
- Yesterday he was on CNBC with Maria mispronouncing his name - discussing our range-bound outlook.
- Here’s Yahoo giving him more time on the same subject.
- Welcome to Another Lost Decade
- Q&A on Range-Bound Market with the FT