Originally posted by normbenign
Japan has been propped up by the US for decades after initial fears that Japan was going to "own" the US. The same fear that is being pushed now but with China substituted.
What is different now is that the debt of the US is now nearly as serious as the Eurozone, or the far east. Hardly any nation on the planet doesn't have debt/spending issues. How ...[text shortened]... s into spendable income and bankruptcy is the endgame. How can it be different with nations?
The yen has climbed strongly, for example, from 2000 to 2002, and from 2005 to 2007 with respect to the dollar. During this time Japan already had a huge debt. It should be noted that because of low inflation of the yen and the fact that most Japanese debt is held domestically, their debt issues are not nearly as serious as for instance Italy or Spain, who have much lower debt to GDP ratios. However, with the path the current Japanese government appears to be on, and an apparant refusal to deal with urgent socio-economic issues, some serious trouble looks to be near.
The Northern European countries have sound public finances. Norway has no debt, Sweden has a debt to GDP ratio of 33%, Denmark 45% and Finland 53%. All are triple-A rated (for what that's worth). With the recent trouble in southern Eurozone economies, many investors seeking safe investments have moved their money from the South to the North, resulting in record low yields on bonds issued by "safer" nations like Germany. None of these countries are going to default any time soon.