Japan Is a Bankruptcy Waiting to Happen

Comments (7)

  1. Cho Franco says:

    It just proves that somewhere the economy doesn`t include all the costs and therefore Japan has managed to make a beautiful society.
    If all the costs would be taken seriously and be included, nobody could pay the price. So better have a guaranteed income by birth – lets say 5 M$.
    It can only be used for certain things till the age of 30.
    So life becomes an investment and has value.
    But helicopter money has no worth.
    Think about it.
    Or we find the missing costs and find a way to pay for them.
    Maybe the world is bigger than we can think!


  2. TOM COLANGELO says:

    Every action has an equal and opposite reaction, so where would you invest to take advantage of this “prior knowledge”? Investments in JAPAN itself and investments to take advantage of the domino effect this economic downfall will have on supplier countries / companies are obvious targets but which would you be looking at specifically?


  3. Peter.P. says:

    A very interesting opinion piece. Does Martin have any “prediction” of how long it might take for his scenario for Japan to play out? Regardless, I suspect they will find a way to avoid such a dire outcome – just as the US will find a way to work through its massive debt problem..


  4. TARA TAN KITAOKA. says:

    I presumed that you have a brave amount of details about Japan but no matter how hard, each of of us, wants to take the gloom & doom situation out of America, we cannot be sure that all predicted by Wall Street is god’s economics.

    We have to see and deal with each country’s economics honestly.


  5. Bill says:

    “The main losers will be Japan’s savers, who bought government debt under the impression that it provides an adequate haven for their retirement. This will spawn a major loss throughout the country and Japan will likely suffer a very deep recession and decline in living standards – similar to the U.S. Great Depression or Argentina’s “infamous decade” in the 1930s.”

    America can best learn from the Japanese experiment and avoid purchasing government debt. We should note that the $2.9 trillion of US money market funds are invested in government debt.


  6. JWRebel says:

    Economists always turn to biological metaphors, like sclerotic, healthy, growth, etc. Japan is a wealthy aging society. Just how much “growth” would be optimal? Has the social contract between employees and employers in Japan proved counter-productive, or does it actually represent somewhat of an ideal (parties investing in each other’s future). People have been talking of Japan’s imminent debt implosion for 30 years now. Japan’s debt also represents its savings, which are of course at a peak as they should be given the demographics. The economy is bound to shrink with the poopulation. That is not an economic problem, but a choice. Their capital stock is the envy of most other nations.
    Even if they were to monetize the entire government debt (note how the focus is again, as always, on public debt, whereas it is private debt dynamics that govern economic cycles), the Japanese would squirrel the cash away under the bed, saving it for their pension and a rainy day. Nothing would have changed.


  7. Dan says:

    OK, so no sovereign nation will ever default on it’s debt. Desperate governments will just print the money regardless of the laws. Think USA. So in the mean time you print Monopoly money, use it to build and buy real things from the world that will have value in the future. Best infrastructure in the world as article points out. At some point no other country wants your money anymore. You start over with new money having “learned your lesson”. History shows world will start trading with you again pretty quickly. Argentina. You still have all your nice infrastructure. As in shiny new Chinese cities with no residents and equity ownership in businesses all over the planet. Not a bad scheme for a government if you are trapped. Probably a good idea to be first. Productive world may cut off following countries a lot sooner. Anyway, beats the Venezuelan model.


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