Originally posted by KazetNagorraThe reason that Japan and the US have been able to maintain and service high debt levels is their very high productivity, and large GDPs. Similar with Germany. The southern Europeans are not so industrialized, and rely on tourism and other soft business.
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, ...[text shortened]... by "safer" nations like Germany. None of these countries are going to default any time soon.
The UK still has some residual command of banking from the days of the empire, but its policies are leading to debt problems.
You may well be right that the crisis is not immediately impending, but the longer the wait, the worse the eventual crash will be.
Originally posted by normbenignJapan has the highest debt to GDP ratio of any country.
The reason that Japan and the US have been able to maintain and service high debt levels is their very high productivity, and large GDPs. Similar with Germany. The southern Europeans are not so industrialized, and rely on tourism and other soft business.
The UK still has some residual command of banking from the days of the empire, but its policies a ...[text shortened]... sis is not immediately impending, but the longer the wait, the worse the eventual crash will be.
Originally posted by Metal BrainYes, but it still makes a lot of stuff that others want. Last I heard Japanese GDP was around the top 5.
Japan has the highest debt to GDP ratio of any country.
On the original question, if debt is used wisely, it can help, both in individual and governmental terms. When it is used irresponsibly, and that is almost guaranteed when the debtor issues his own debt, it simply leads to waste, malinvestment, and recession.
Originally posted by normbenignThe BOJ is going to inject about $1.4 trillion into the economy in less than two years.
Yes, but it still makes a lot of stuff that others want. Last I heard Japanese GDP was around the top 5.
On the original question, if debt is used wisely, it can help, both in individual and governmental terms. When it is used irresponsibly, and that is almost guaranteed when the debtor issues his own debt, it simply leads to waste, malinvestment, and recession.
http://www.reuters.com/article/2013/04/04/us-japan-economy-
boj-idUSBRE93216U20130404
I think this supports what I have been saying all along.
Originally posted by Metal BrainThey keep doing the same thing, because at this stage Japan hasn't got anything else. The US isn't that far behind. Each successive QE temporarily keeps the wolf from the door, but the time eventually comes that nobody wants to buy that debt, and it becomes a bank run of cataclysmic proportions.
The BOJ is going to inject about $1.4 trillion into the economy in less than two years.
http://www.reuters.com/article/2013/04/04/us-japan-economy-
boj-idUSBRE93216U20130404
I think this supports what I have been saying all along.