Japan Spirals into Bankruptcy?

the key is confidence, you can talk all you want, but the japanese people who are rich enough to finance their own government have confidence, nothing else matters.
 
"Chart of the day, sovereign precariousness edition"

http://blogs.reuters.com/felix-salmon/2013/11/02/chart-of-the-day-sovereign-precariousness-edition/

"This is the idea behind the “hang time” measure in the chart above. What we did was to take a country’s primary deficit — the amount it needs to borrow every year to finance its operations — and add on its total annual debt service. We then took that number and divided it into the country’s total foreign reserves, to get an idea for the length of time that sovereign reserves would be able to fund not only operations, but also all of the country’s debt service requirements."

"Japan would have only about 14 days."

but as always:

"Of course, countries like Japan and the UK borrow overwhelmingly in their own currencies, and can always, if push comes to shove, print more of it. The US is in the same boat — and, to boot, has the exorbitant privilege of printing the world’s reserve currency. Where fiscal solutions fail, monetary solutions are likely to look attractive."
 
Quote from blueraincap:

the key is confidence, you can talk all you want, but the japanese people who are rich enough to finance their own government have confidence, nothing else matters.
More...

Well, they stopping buying their own bonds. It has tipped over to net negative flow for about a year.

The Japanese government has to do the following to get the otaku to buy their own bonds,
http://www.bloomberg.com/video/94295197-japanese-all-girl-band-akb48-sells-bonds.html

In case you wonder what is otaku?
http://en.wikipedia.org/wiki/Otaku

:D
 
Yes ... they have confidence TODAY. You are correct having that single precious element can, and frequently does, outweigh not only every other element but the aggragate of all other elements.

Yet, like many intangibles, confidence is fragile. And, in an instant, you can be in the position that "all the King's horses and all the King's men" can't change. Have you ever seen an old person frightened? Imagine tens of millions of them in that state.

Quote from blueraincap:

the key is confidence, you can talk all you want, but the japanese people who are rich enough to finance their own government have confidence, nothing else matters.
More...
 
Quote from Swan Noir:

Yes ... they have confidence TODAY. You are correct having that single precious element can, and frequently does, outweigh not only every other element but the aggragate of all other elements.

Yet, like many intangibles, confidence is fragile.
More...

This is the essence of the above Felix Salmon article.

Japan is funding itself well for now.

But in a crisis, its "hang time", as defined in the article, is only 14 days.
 
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