Quote from m22au:
Bug in Search of Windshield
"As my friend John Mauldin suggests, Japan is a bug in search of a windshield. I highly doubt Japan can make it 2022 or even 2017 before it runs into serious issues.
"Actually, Japan has extremely serious issues already, it's just that the market is ignoring them for now. If interest rates rise by a mere 2% or so, interest on the national debt will consume 100% of Japanese tax revenue."
I have not read or scanned all the posts on this thread, and I apologize if mine overlaps.
The above is part of a quote from 20 posts ago. I have read Mauldin for 5 years and his END GAME book last year when it was published. I read a couple of his newsletters every week for 5 years. Let's be clear...that post (the quote above) is not Mauldin's, except he is the originator of "Japan is a bug looking for a windshield." The rest is lifted from Mish's essay at the stated post.
Not terribly relevant here except it started me in Spain where Japan is about now: I toured Spain for a month in April 2009 talking to educated Spaniards before the PIIGS acronym and read a wonderful Spanish economist then who said there would be no Spain in 3 years (economically). The only relevance to this Japan thread is I had the PIIGS concept down real good then without the acronym, and my notion of the over-leverage of the Mediterranean countries and their imminent, unimaginable fate was a frightening looking glass into America's future, but Japan was sure to succumb soon. When I coupled this with my hero David Walker since 2007 (please Wikipedia him if not familiar) I knew damn well Japan was doomed and America would not be far behind with socialist Obama similar to socialist Spanish leader Zapatero. I mellowed out some, coming to believe USA may not be hitting a brick wall but experiencing dramatically declining quality of life. (I reserve judgment on hitting a brick wall, though.) Just as the Mediterranean was a looking glass for me 3 1/2 years ago, Japan is too, but Japanese debt as described in this thread is worse. Japan's uniqueness is it doesn't owe its soul to the country store--foreigners-- because its debt is held mainly by its citizens' purchase of its bonds. Citizens can be more graceful about demanding higher coupon rates from bonds issued by its government even as foreigners WILL demand it due to increasing risk of not being paid back.
Mauldin has been saying for a while that Japan's day of reckoning will start in 2013 and hit bad by 2014. (I have heard/seen arguments that it will be later.) You can listen to his 20 minute interview that includes reference to Japan. The link takes you to the page, and the interview is one of many links about half way down. France (hmmm....another socialist at the helm) Mauldin says is a year or two after Japan's reckoning (suggested in END GAME) and he stands by it in the interview.
http://www.georgejarkesy.com/category/radio-segments/page/3/
He says bad pain will occur to the Japanese then to the French, then to U.S. The old mantra "it is better to pay now than later" when in the middle of a reckoning will become obvious. We look at Europe, then Japan as if we will be looking at OUR life's story flash before us, but our FUTURE life's story, not our past. Mauldin recently interviewed a well respected Japanese investor who is a very big bear on Japanese bonds and currency he makes reference at the link I posted. Interesting view.
btw...Mauldin interviewed the respective chief-of-staffs for Harry Reid and John Beiner on the fiscal cliff. Behind all the puffery of Reid and Obama and Beiner, the real work goes on by the office staffers who bring the sides closer. These gentlemen get it. They have known for a long time fiscal cliff is coming. They know everything I posted here for a long time. Buckle up if you listen to the interview.
http://www.mauldineconomics.com/landing/chiefs-of-staff-video/MEC011TF1112D
Sorry for this long post. It is some of my primal scream.
