Japan Spirals into Bankruptcy?

[send_to_tony]

that is a very different dynamics than other sovereign defaults we encountered in the past decades (argentina/russia/etc).

 

[Swan Noir]

When Japan blows up it will be unlike anything we have seen in modern times.

Quote from send_to_tony:

that is a very different dynamics than other sovereign defaults we encountered in the past decades (argentina/russia/etc).

 

[blueraincap]

it has its own currency and huge fx reserves plus a dynamic economy and huge sticky domestic money. yes it is heavily indebted, but i dont see it coming anytime soon unless capital flight happens.

as a matter of fact, i think italy is gonna go under sooner than japan

 

[tradingjournals]

Quote from blueraincap:

it has its own currency and huge fx reserves plus a dynamic economy and huge sticky domestic money. yes it is heavily indebted, but i dont see it coming anytime soon unless capital flight happens.

as a matter of fact, i think italy is gonna go under sooner than japan

Yes, because Italy does not own the printing press. It needs others to do it for her.

On the other hand isn't Italy in a better position? Don't they have the option to leave the euro, default and start anew.

 

[tradingjournals]

Quote from Swan Noir:

When Japan blows up it will be unlike anything we have seen in modern times.

Explain in more details.

 

[Fractals 'R Us]

Quote from Swan Noir:

When Japan blows up it will be unlike anything we have seen in modern times.

unless the US of A goes under first LOL

 

[zdreg]

Quote from Fractals 'R Us:

unless the US of A goes under first LOL

the race to the bottom. a thriller better than the thriller in manila?

 

[HeSaidSheSaid]

I think the sun is setting on Japan:

1) aging population that translates into more burden on society. Lack of Human resources for maintaining growth.

2) Japan companies will face stiff competition from S. Korean's and Chinese's companies.

3) high Debt and Inflation

4) lack of natural resources that translates into high production cost.

 

[clacy]

Quote from HeSaidSheSaid:

I think the sun is setting on Japan:

1) aging population that translates into more burden on society. Lack of Human resources for maintaining growth.

2) Japan companies will face stiff competition from S. Korean's and Chinese's companies.

3) high Debt and Inflation

4) lack of natural resources that translates into high production cost.

In a sense, Japan is the canary in the coal mine for the rest of the 1st world. They are an extreme of the US and EU for instance.

How Japan plays out, will likely give us a glimpse of our future.

If the Modern Monetary Theorists are correct, there won't be a significant price to pay for them monetizing. If conventional thinking holds, then Japan should end pretty badly. So goes Japan, so goes the rest of us in the West to large degree.

 

[tradingjournals]

Quote from m22au:

It depends on how you define "default".

It may be able to monetize all outstanding JGBs, but if it did this, it's unlikely inflation would remain low, and likely the JPY would depreciate against currencies where there wasn't as much money printing.

Deflation in japan makes the Yen as if it were paying an interest or a capital gain.

I just sold some AUD/JPY before writing this post, and it is already in the green by 10 pips by the time I finished.