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A Quadrillion Yen And Counting – The Japanese Debt Bomb Could Set Off Global Panic At Any Moment

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Shibuya Crossing in Tokyo, JapanHow much is 1,000,000,000,000,000 yen worth?  Well, a quadrillion yen is worth approximately 10.5 trillion dollars.  It is an amount of money that is larger than the “the economies of Germany, France and the U.K. combined“.  It is such an astounding amount of debt that it is hard to even get your mind around it.  The government debt to GDP ratio in Japan will reach 247 percent this year, and the Japanese currently spend about 50 percent of all central government tax revenue on debt service.  Realistically, there are only two ways out of this overwhelming debt trap for the Japanese.  Either they default or they try to inflate the debt away.  At this point, the Japanese have chosen to try to inflate the debt away.  They have initiated the greatest quantitative easing experiment that a major industrialized nation has attempted since the days of the Weimar Republic.  Over the next two years, the Bank of Japan plans to zap 60 trillion yen into existence out of thin air and use it to buy government bonds.  By the time this program is over, the monetary base in Japan will have approximately doubled.  But authorities in Japan are desperate.  They know that the Japanese debt bomb could set off global panic at any time, and they are trying to find a way out that will not cause too much pain.

Unfortunately, the only way that this bizarre quantitative easing program will work is if investors in Japanese bonds act very, very irrationally.  You see, the only way that Japan has been able to pile up this much debt in the first place is because they have been able to borrow gigantic piles of money at super low interest rates.

Right now, the yield on 10 year Japanese bonds is sitting at an absurdly low 0.76%.  But even with such ridiculously low interest rates, the central government of Japan is still spending about half of all tax revenue on debt service.

If interest rates go up, the game is over.

But now that the Japanese government has announced that it plans to double the monetary base, it would be extremely irrational for investors not to demand higher rates on Japanese government debt.  After all, why would you want to loan money to the Japanese government for less than one percent a year when the purchasing power of your money could potentially be halved over the next two years?

Amazingly, this is exactly what the Japanese government is counting on.  They are counting on being able to wildly print up money and monetize debt, but also keep yields on Japanese bonds at insanely low levels at the same time.

For the moment, it is actually working.  Investors in Japanese bonds are behaving very, very irrationally.

But if that changes at some point, we could potentially be looking at the greatest Asian economic crisis of all time.

And there are some very sharp minds out there that believe that is exactly what is going to happen.

For example, the founder of Hayman Capital Management, Kyle Bass, has been sounding the alarm about Japan for a long time.  He correctly predicted the subprime mortgage meltdown, and in the process he made hundreds of millions of dollars for his clients.  Now he believes that the next major crash is going to be in Japan.

According to Bass, the bond bubble in Japan is so large that once it begins to implode fear is going to start spreading like wildfire…

Remember, Japanese banks in general have 900% of their tangible assets invested in JGBs that are the most negatively convex instrument you can put into a portfolio. Assume for instance that a bank holds a 10 year bond yielding 80 basis points. A 100 basis point move will cost the JGB investor about 10 years of expected interest payments.

Think about the psychology of all the players and financial implications if rates do move 100 basis points. Think about the solvency of a nation which currently spends 50% of its central government tax revenues on debt service, half of which earns the lowest yields of any country in the world.

You can’t look at this as a simple question. You need to think about this as a multivariate equation. You have to think about the incentives and the fears of all the participants. And you need to think about the fiscal sustainability of the government.

If rates even rise by a full percentage point, it could start a stampede toward the exits that nobody in the entire world would be able to control…

I ran a survey of 1,009 Japanese investors where we asked: “If rates were to move up 100 basis points, would that engender more confidence and make you want to buy more JGBs?” or, “Would you take your money elsewhere, even if it were hamstringing your government’s ability to operate?” 8 – 9% of respondents that said that they would buy more bonds and almost 80% said they would run, not walk the other way.

For much more on this, you can watch a video of Kyle Bass discussing why Japan is doomed right here.

And of course Japan is not the only “debt bomb” that could potentially go off over in Asia.  As I mentioned in another article, the major problem over in China is the level of private debt…

In China, the big problem is the absolutely stunning growth of private domestic debt.  According to a recent World Bank report, the total amount of credit in China has risen from 9 trillion dollars in 2008 to 23 trillion dollars today.

That increase is roughly equivalent to the entire U.S. commercial banking system.

There is simply way, way too much debt in our world today.  Never before has there been so much red ink all over the planet at the same time.

Many in the mainstream media insist that this party can go on indefinitely.

But that is what they said about the housing bubble too.

Sadly, the truth is that every financial bubble eventually bursts, and this global debt bubble will be no exception.

I hope that you are getting prepared while you still can.

  • K

    Yes they are further down the road of debt, than we are. At least we do not have a nuclear catastrophe in the middle of our Country. They are just a lost Country, in more ways than I can count. I hear the rich folk over there have started heading for Korea, and Taiwan. So with all these problems what do they do? Waste money building their first aircraft carrier, since WWII. It seems the whole world can no longer think straight.

    • Graham

      America doesn’t have a nuclear catastrophe on its hands… yet.

      From what I have been following in recent years, a number of reactors are proving to be highly problematic.

      The same design as those sold to the Japanese. Also dangerously close to known fault lines.

      There is also a lot more to Fukushima than what most seem to realise. Start with the “initial” earthquake statistics and exactly where they were measured.

      Jim Stone has some of the best close up shots of the reactor damage that I can find. His story on the subject also seemed to attract a huge amount of negative attention, so he might be onto something.

    • BonusGift

      News flash, they are not further down the road of debt that the US. They have a higher formally admitted national debt level (i.e., relative to stated GDP), but across all private and public categories we will win that contest hands down. Furthermore, they have a homogenous population so that when all is said and down they will still be around as a cohesive nation, not so for the US that has been importing extra aggrieved underclasses and other unassimilated rabble to fill the welfare and socialized medicine roles.

      • K

        I was speaking of the National debt level. You also have not allowed for the expense of the eventual reactor cleanup. If it hits the ground water, they will have to evacuate Tokyo. Yes I know they say, they will not let that happen. Sure, after 2 1/2 years of lying I believe that

        • BonusGift

          “National debt” should include all national debts/obligations, and unfortunately the US will win that contest. Also, is the cleanup more than $100 trillion and/or does the US not have anything to clean up?

          • K

            Perhaps, but if you are right. Then the U.S. should collapse before Japan. We shall see.

          • BonusGift

            ‘Economic collapse is a process’, and has already begun for Japan some time ago, and is now well underway in the US.

    • Ralfine

      I guess we are all very close to the edge.
      America has a drought issue, depleting aquifer, disappearing rivers and lakes. And all power plants need cooling.

      Then there are re-emerging diseases like pertussis, measles, malaria, dengue, influenza. These last two years there were record levels in all these diseases.

      Further there are cuts in healthcare everywhere, as well as cuts in staffing everywhere.

      Redundancy is seen as costly by the MBA, the M.Sc. and M.Eng. view redundancy as safety.

      Now remove redundancy to reduce costs and you increase risk of catastrophic failure.

      With the right setting there will be chain reactions and avalanches of failures.

      MBAs and engineers will always work against each other – until the engineer has done his private prepping and sits back to watch.

      • PithHelmut

        With all the unemployed and under-employed you’d think we minions would organize ourselves and simply get off the monetary system and start our own form of exchange and do the things that we love to do. The system doesn’t work and all we do is lament. Let’s start helping each other. Those who are unemployed could do community service.

        • Ralfine

          You could start a company providing a service or producing goods. Sell products and services so you can feed your family.

          Keep your salary reasonable and put the profit back into the company – buying buildings, equipment, employing more people.

          Pay a decent salary, and provide amenities that makes life easier. Always keep the profit in the company for expansion, research, development, social services.
          Do not get shareholders, do not pay dividends.

          Have a look at

    • Ralfine

      I believe the japanese ship is a helicopter carrier, so that they can help better in case of emergencies like Fukushima and Tsunami. That’s what they said when they started to build it.

      Now they say it is a flat-top destroyer, which can hold 14 helicopters or vertically start fighter airplanes.

      Supposed to be used only for defense and humanitarian missions.

      And we remember China buying a scrapped and stripped down carrier from Russia for entertainment, “with no intention to build their own carrier” and then closing the entertainment carrier to change it back into a military vessel.

      • Mondobeyondo

        Don’t know about that.

        t’s big enough, and wide enough (and gosh darn it, people love it, to paraphrase Stuart Smalley from “Saturday Night Live”) to be an aircraft carrier.

    • Mudpie

      I am not sure that the whole world ever DID think straight.

      But America did at one point, not too long ago and I would say even up until the present Savage in Chief was elected. And somehow, our sanity made it all seem okay.

      Well, now WE are one of the worst banana republics and the Savage has only been in office 6 years. Imagine what it will look like in another 6, after Obamacare and the rest of the mess.

      Hit your knees and pray tonight. For the grandkids. They did not ask for this . . . .

      • Gay Veteran

        uh, like Bush the Stoopid didn’t do his share of damage to this country

        • Mudpie

          Won’t get an argument from me. But so what?

  • GSOB

    “If interest rates go up, the game is over.”

    FGreat, articulated.
    You ended nicely too.


  • Stezie

    Wow. And Japan recently purchased the largest naval warship since WW2. That’s some pretty reckless spending.

    Don’t worry, though, the US is heading down a very similar path. Although, I think it’s going to be much worse here than it is going to be for Japan. Again, I’m trying to be optimistic, but…

    • markthetruth

      Japan recently purchased the largest naval warship since WW2 on Credit !

      Nobody’s paying anyone they don’t have the Money.

      Meanwhile leakage of radiation from the Fukushima plant to the ocean Continues.

      the end

      • Ayn Rand

        It seems people have forgotten about that power plant, but it is currently the NUMBER ONE short term threat TO HUMANITY!!!!! A 7.0 earthquake would collapse one of the fuel pools making Japan lifeless and the rest of the Northern Hemisphere difficult to live in. There is a 70% chance of said earthquake happening this year. 98% of it happening in the next three years. The one time I want us to use foreign aid and they just ignore it…

    • Mudpie

      Nobody knows WHAT will happen except that it probably will be awful. But with all of these other nations killing their currencies, the dollar may somehow look better to the everybody than the competition. Esp. if China is having trouble. Just thinking out loud, but I have read similar analyses.

      Still, I think hell is coming and it’s closing in.

    • lois752

      what Jonathan responded I am shocked that you can profit $8386 in 1 month on the computer. have you seen this page w­w­w.K­E­P­2.c­o­m

      • No_trolls

        No I haven’t seen that page.

      • michaelbme

        Screw you spammer.

    • piratemarshal

      Spending doesn’t matter when the government can just create as much currency as they want. That is the real problem here, which has inflated the entire world’s economy with artificial supply and zero demand. The entire economy is fake and not driven by real world needs, only the demand for “forever growth”. The party is going to end soon, and all of us will be paying the check.

  • GSOB

    I hope that you are getting prepared while you still can.

    Water, food, shelter, equipment, medical kit,
    drum set.

    • Graham

      Your own set looks big enough to serve many, so I will score that one off the list.

      • GSOB

        That was my beginner’s set

    • Bob

      I just stocked up on all of it. Foxtrotgear had a special on ammo yesterday and that help me finish off the preps. Get ready.

      • GSOB

        What’s your 20?

    • greyprepper

      Aurora CO right? I’ve seen you on here a lot. Glad to know there are other people in Colorado preparing for tough times!

      • GSOB

        Concerned for my wife and children

    • davidmpark


    • Mondobeyondo

      Don’t forget the acoustic guitar. Heh! Electric axes and amps are useless when the power goes out.

      • TtT Engine

        Where is your monster wind mill [looks nice in the yard] and your mega solar panels ? My neighbor had a natural gas generator during hurricane Sandy. Never missed a drum beat !

        • davidmpark

          Buy all three and not worry about much!

        • Mondobeyondo

          Playing a Fender Strat in front of a windmill?! Hey ,that’s cool! Might give that a try for an upcoming music vid (say, April of 2022). I need to raise money first, form a band, etc, yada.

  • Tim

    About three months ago, Christine Hughes of Otterwood Capital Management put together a presentation about the central bank of Japan’s monetary policy. She basically stated that Japan is doomed. It’s a great presentation, and you can find it on Youtube.

    • Ralfine

      I remember these doomed projections from 15 years ago, when I talked to a friend who lived in Japan. He told me that it just looks bad from a western perspective.

      The Japanese are more resilient.

      At that time Japan had survived two nuclear bombs and had risen to second largest economy, with the largest foreign currency reserves.

      • jaxon64

        I do agree that the Japanese are more likely to pull together as a people and less likely to have the kind of mad max scenario we might see in the US with a collapse. Our American culture has been killed by “multi-culturalism” and America would quickly break into factions and roving gangs–Japan most likely could return to a simpler life and endure ( not to say that millions would still be lost to disease/starvation/illnesses etal…
        PS: No hydrogen or nuclear device have ever been detonated or used in warfare—they were atomic bombs–less than 1/10th the power of a small nuclear device..

        • Ralfine

          An atomic bomb is a bomb where the nucleus of atoms is split. Therefore atomic bombs are also called nuclear bombs just like reactors in submarines and power plants are called nuclear reactors.

  • Rodster

    I’m amazed at the levels of stupidity, govts from around the world are following with regards to monetary policy. They are all doing the same thing which will bring massive punishment to the global economy in equal parts.

    If the sum of the parts ever unite it will make the 30’s depression look like a mild recession or worse it will collapse the world economic system.

  • markthetruth

    When you got your foot stuck under a bolder and no one around with enough strength to get it off, you got two choices Die or Cut you Foot Off and be Injured for life. A no real win situation.

    the end…

    • GSOB

      Three choices,

      you can stay.

      • markthetruth

        you stay you die.

        the end…

        • davidmpark

          Go where? I have to fight – got no where else to go!

    • MeMadMax

      Option three: Slowly chip away at the rock using ur fingernails.

      • Ralfine

        There is another option – often overlooked: don’t go to places where your foot can be trapped under a rock.

  • Hellfire1968

    Every Country is going print themselves out of their debt… it is going to get crazy in a few years. Currency Wars.

  • A Dodgy Bloke

    Never understate the delusion of a Central Banker. I’ve always thought the daisy chain would start in Asia with either China or Japan. Yesterday Glenn Back pulled my coat to Egypt. Egypt is close to civil war, if the Suez Canal is blocked oil goes to $300.00 dollars a barrel. At $300.00 a barrel you wont be able to find gas let alone pay $10.00 a gallon for it. If Japan rolls over and Egypt implodes around the same time spreading to the rest of the Middle East. That and the political social and economic instability that would cause could bring the whole show down. The system is not stable now one good kick would bring in a another global dark age.

    • Ralfine

      No. As the US will be the biggest oil producer in the world, oil price will drop back to $10 per barrel, as you can dispense with your expensive navy.

      • Ales Sandro

        dream on. that oil is not for the ppl but stored for military purposes.

      • Gay Veteran

        you do understand that the price of oil is set by the world market?

        • Ralfine

          Just in:

          A Texan tragedy: ample oil, no water

          Fracking boom sucks away precious water from beneath the ground, leaving cattle dead, farms bone-dry and people thirsty

          The Guardian, who else

          • Gay Veteran

            the dangers of fracking are well known

          • Ralfine

            To whom?

    • chris

      Combined with a massive solar flare bringing down global electronic systems and the ‘just in time’ system of food supply it would be anarchy/chaos.

    • Mudpie

      We would so richly deserve the hell that would follow that the irony is delicious. We ask others to drill for oil because we dare not “pollute” our own backyard, and then get hammered when they cannot ship it any longer, and we have not the wells or refineries to meet demand.

      That would be such sweet, delicious irony.

      Satan could not have come up with a better plan.

  • Concerned Boy

    I am very concerned

    • Mondobeyondo

      Of course you are. You’re also a boy.

      • coocoopops

        Love it!

  • An Aussie Guy

    The situation (of money printing in the US) was highly reliant upon Japan not doing the same. The thinking was that if the US prints money they could monetize the US debt, with Japanese govt bonds providing the “back up” because the government bonds from Japan never did anything over decades. Every investor – especially the Really Big Hedge funds on Wall St, which really control the world NOT Central banks – thought they could use Japanese Government Bonds to “back up” and hedge against what the US was doing (i.e.: printing lots of money). This meant the Hedge Funds could manipulate the markets and suck the life out of the Central Banks while the Central Banks futilely printed more and more money to feed the appetite of the very monster that was and is eating them alive.

    Then – disastrously – the Japanese started printing money: their economy had stagnated for 20 + years, hey, money-printing seems to be working for the US economy (Look at all those nice things the O’Bananas Administration was saying… and if you can’t trust the US government, who can you trust? – pardon my sarcasm) well… why not print money in Japan?

    This removed the “safety catch” from the debt bomb that the US, Japan, Europe, Britain, and almost everyone else has built up in the last 30 or 40 years. The markets began to plunge, only stopped by some drastic action by the Central Banks who dumped even more printed money in the markets.

    The Hedge Funds smell blood. The Hedge Funds know when this almighty collapse starts, they can make a whopping profit off the whole collapse, thanks to financial deals known as “Credit Default Swaps”. Japan will be one of the first to suffer, but I think one or more of the big Wall St Banks will be the first to go. Right now, JP Morgan is desperately begging anyone for physical gold; Barclays Bank (British) is looking shaky; Deutsche Bank (Germany) is heading into very dangerous territory with the Bank of International Settlements issuing veiled warnings about the health of Deutsche Bank.

    Which one will collapse first?

    Japan’s economic and financial situation is on a hair-trigger. JP Morgan’s situation appears to be worse, with more debt than Japan. Barclay’s Bank is in similar trouble. Deutsche Bank is also on a hair-trigger. Any one of these could go, with only the slightest push – a minor company collapse or a failure to make delivery of physical gold, a withholding of monies owed (which is how JP Morgan killed Lehmann Bros) or a deliberate trashing of a company’s stock, or destruction of a company’s bonds, or a move on a country’s currency will be enough to trigger the whole collapse.

    As this excellent blog has shown, Wall St always moves steeply downwards when:

    #1. Margin debt on Wall St exceeds 2.25% of US GDP (it’s now well over 2.5% of US GDP)

    #2. The average price of fuel (gasoline being only one type of fuel) in the US goes – and stays – above $3.88 per US gallon.

    Any such steep downwards move on Wall St right now would unleash economic ruin. The US Federal Reserve would try to print money to stuff funds into the market while buying US government bonds , Japanese government bonds, British Government bonds and recycling the money through to the US Treasury. If anyone thinks the US Treasury can do all these things, all at once, then you are deluded. It can’t.

    The US Treasury itself, for all of it resources and reach, would simply not have enough resources (people or computers) to stop all the accumulated problems which with then hit all at once. The US Treasury, for all of it’s mighty resources, would not be able to stop all the accumulated problems all at once because just one problem “getting through” would be enough to cause the catastrophic collapse that this blog has been talking about.

    But there is one last shoe to fall: in September of this year, the US Federal Reserve will become the only buyer of US Treasury-issued US government bonds, using money printed by the US Treasury. Once that happens, there is not one single “safety net” left, and the Hedge Funds will have the Central Banks at their mercy.

    Then will come the destruction of the Central Banks, which is likely to take several ghastly horrifying months to go from where we are now to the utter ruin of the Central Banks, with there being two “winners”: The biggest Wall St Hedge Funds and Communist China.

    The US government will be openly revealed as the powerless puppet of the Wall St Hedge Funds and the US Government itself in urgent need of a “bail out”….and if you think things are bad, now, you wait until then.

    • Mudpie


      It wasn’t until I spent significant time Down Under that I began to see America with an objective eye.

      Be afraid. Very afraid. How the society changed so fast is hard to know. I would say that the Left has been at work a long, long time and also that our obsession with giving up on common sense in favor of politically correct thinking on all issues, but especially race, has weakened us to the point that the rot is spreading too fast to cure.

  • Nothing will happen. They have Mathematical calculations that’s not taught in the Universities.

    We are led to make calculations based on Numbers and relate it to Debt as going up and down.

    They have calculations that goes “Side-Ways” …They can still go on with more debt like in America and still continue to function normally. They control both side of the equation.

    The debt is just to Central Bank, which charges interest rate on money printing. Its not really a debt. With one stroke, it can wipe out all debt ever to Japan. Its simple. The word Debt is Con Propaganda to hide the real source of debt which are central banks of the world.

    • Robert Govan

      I like your style you could be onto something.

    • MeMadMax

      They did that with weimar republic too, didn’t work so well because it still required outside funding to keep it alive(us funds)…

    • Rodster

      Totally DISAGREE with all of the above. Right now the Fed and the Central banksters have checkmated themselves which they can’t get out of.

      If as you say they have it all under control and they know EXACTLY what they are doing. Then why does printing more digitized money equal less improvement to the economy? The answer is the money flows to the top/powerful/elite who have the money to capitalize on QE. It never gets to the economy and it’s not supposed to. If it did you would have hyperinflation if that money ever got into circulation.

      QE is just an illusion to make Wall Street look better and the govt media complex sells it as good times are here again.

      If they have it under control. Then why did Helicopter Ben feel the need to FLOAT a TRIAL BALLOON? Once he mentioned tapering the stock market suffered an irregular heartbeat. So Dr. Ben came to the rescue and gave the patient more medicine in the form of QE. If they know what they are doing and have it under control, then why back down from QE?

      If they Central Planners have it all under control, then why do we get different answers from the Fed, the IMF, the ECB, the EU and the Bank for International Settlements aka BIS?

      The answer is because this is all a ponzi scheme and they need to lie to people that all is well. The whole monetary system is all a lie and it’s being exposed for what it is.

      But you just go right ahead and feel free that the people in charge running the show have the brilliance of Gary2 and Paul Krugman.

      • GSOB

        The USA gubment and the Federal banks system(s) is under control of
        a specific class who we know something about.

        What has yet to be seen o revealed to us. pending it’s appointed time, is the person in the drivers seat.

      • ArigatouGozaimas

        I love reading Paul Krugman’s articles. I laugh so hard, and then I cry, it’s a very emotional experience.

    • GSOB


    • Steve3

      So why did Weimer, Argentina, Zimbabwe happen, they carried on printing.

    • davidmpark

      I dunno about the thesis… it’s a little incomplete. That can work so long as the fiat currency is kept only within the banking system and not used for anything with people’s accounts, loans to businesses or individuals, or spent on expenditures.

      The problem is when it gets into main street. That’s when too many dollars following to few products comes into play.

      When that happens, the issue is not just the prices go up, but wages also come down along with those wages purchasing power. That is when we hit Wiemar, Zimbabwe, and Argentina level of delusional/stupid.

  • davidmpark

    Kids want to know how this will affect their Yu-Gi-Oh, Pokemon, and other Nintendo and anime. 🙂 How cute!

    What gets me is the new military equipment the Japanese just acquired. Thought the post WWII treaties prevented that.

    Guess everyone is getting ready for the next world war to get hot.

  • Robert Govan

    If you visit the fofoa blog he will explain that the greatest transfer of wealth in the history of the world will go to you if you own “physical” gold (coins, bars etc). Paper gold will stop trading and a physical only market will appear almost overnight. Visit his blog and also look up the word “freegold” on Wikipedia. Then if you care to see how the “elite” mind control the masses and the formers Waterloo, go here…

  • MeMadMax

    one world currency will never work…
    That’s just tinfoil hat conspiracy BS. See: The Euro… That was a dry run, it failed. No, politicians keep printing because they want to keep the votes coming in… >_> They don’t ever want to look like a bad guy in the name of the best interests of the country…

    • Ralfine

      never is a long time, just look at how the us dollar is accepted all over the world.
      not as much as before, but when I travelled it was always useful to have a few usd tucked away somewhere. far better than any traveller’s cheques.

  • Mondobeyondo



  • Ralfine

    Why need interest rate? You could set the interest rate to zero. Then lending to the state is purely patriotic.

  • seth datta

    The bankers, super-rich, NS@ and CIA are all to blame for our current woes. We should concentrate our efforts against these groups rather than against other countries.

  • Richard

    Excellent article, Michael. Congratulations.

  • Theodor

    I don’t get it, I think I’m missing something… How can the 10 year yield be so low? How is this possible? Does anybody know why? Thanks.

    • GSOB

      Theory has it that the economy is doing well, that’s why.

    • ArigatouGozaimas

      The central banks are filling the demand for bonds, thus keeping the yield low. When bonds are in low demand the yield goes higher to make them more attractive to investors. With the central banks buying the bonds, thus filling demand, outside investment is not as crucial.

      The problem with this is it creates a cyclical investment bubble in which the central banks must continue buying bonds in order to keep the yield low. Since the central banks can only do this by creating money, it will eventually debase the currency. The government could lower borrowing to maintain low yield, but that would risk economic implosion as the economy has been latched to government spending beyond its means.

  • chris

    We were told that the ideal credit card customer (for the credit card company!) was someone who only ever pays just manages to make the minimum payments on the debt. This model has been applied to whole countries too. Just keep the population continually working like crazy to only pay off the interest while their savings get trashed and the total debt remains untouched or growing.

  • GSOB

    Where is Syrin?

    Syrin usually shares an interesting perspective.

    Syrin, where are you? it’s been about three weeks since you have blogged.

  • SafetyViking

    Looking at the end game, you can definitely see this is all heading toward one world currency & ultimately one world government….

  • Raj mon

    Replace the word Japan with USA, same story

  • FounderChurch


    The best investment hedge is God and numerous children. Absent those money will not help you. FounderChurch. at gmail

  • Tobias Smith

    well, well, well. looks like we are moments away…………..

  • RarefiedSnotress

    Jan 21, 2010 The Global Debt Bomb – Forbes
    Feb 2,2010 Our debt time bomb is ready to go ka-boom – Paul B. Farrell
    Sep 7,2012 China Hiding the “Mother of All Debt Bombs”? Minxin Pei
    Sep 30,2012 The Global Debt Bomb and the Fiscal Unsustainability of the United States-Hon. Joseph J. DioGuardi
    Sooo many debt bombs, so little time.
    Wake me up when this puppy blows.

  • jakartaman

    Through history mankind had kept a reasonable balance between necessary resources and the population. If it got out of balance we used wars etc to get it back in synch.
    We are at a point in time when we need a major adjustment. The solution will be to address many outstanding issues not just Financial.
    A chair has four legs and so does societies.
    1) type government
    2) type economic system
    3) Religion
    4) Arts, literature etc.
    -Most of the world is at or converging on a faile socialist system of government
    – Most countries have moved to Capitalism or quasi -capitalism for there economic system (credit/debt)
    – There is four major belief systems in the world
    Christian – Islam – Hindu and other(chinese etc)
    – The western world could be said to have degraded their arts (hip-hop – hollywood etc.
    The socialist government model is and will be a failure
    Capitalism has outlived its time and is imploding with debt
    The Major religions are at war
    our Arts have turned it into Sodom and Gamoria
    In summary – the world as we know it will collapse into chaos and wars for limited resources.
    When, who and what will emerge from this
    upheaval is very speculative to say the least.

    In my opinion it will be a very painful protracted experience.

  • Ralfine


    China’s rising stability eases need for fresh stimulus

    China’s industrial output rose 9.7 per cent in July, above expectations,
    while retail sales rose 13.2 per cent and inflation steadied, possibly
    signalling that Beijing may keep monetary policy on hold.

  • mohsensamiei

    this has been the case since 1971when the petrodollar was put into place and the us exited from the gold standard and as long as the largest economies tow the line the debet based economy will go on regardless.

  • Michael Coleman

    Exactly who is owed all this world debt ?

    • ArigatouGozaimas

      The central banks of the world own the lion share. Foreign governments own a great deal of each other’s debt. It is also owned by banks and investors. Some of it is owned by individuals.

    • Mondobeyondo

      You and me, baby, Check your income tax statement next year. (it goes deeper tha that of course. That’s the simple answer.)

  • david odowd

    The entire economic world is about to explode; no one knows for certain the outcome; unless one wants to call it Armageddon…Bring it on; this has been the slowest train wreck in history!

  • ArigatouGozaimas

    At least Japan can default, reset its currency, and still survive as a cohesive nation because of the cohesive culture, character, and temperament of its people. Japan’s people are also well educated; whereas, beyond the wealth class and some enterprising individuals, the U.S. educational system is designed to propagate progressives and leave the leftovers ignorant.

    The U.S. had such an underlying foundation as well but it is now fractured by greed, moral decay, and divisive politics. The melting pot is now more like salad bowl of mini-nations based on region, race divisions, economics, and political advantage. It is only held together by money.

    Japan seems to be doing the logical thing, they can reset their currency and still be able to do business because the other big nations will be in the same boat, only worse.

  • mar1950

    Add Fukashima to this mix and you have an extinction of a civilization.

  • Trailer Park Investor

    The whole world is spirling down the debt drain and the ONLY relief is MORE DEBT.
    NO ONE has an answer, other than more debt.
    Everyone owes somebody a lot of money, EVERYBODY.
    I say: Erase all obligations and start with a clean NEW slate, make lending and borrowing money illegal, unless you really don’t need the money in the first place.
    There are NO safe loans to make any longer, a business with a billion dollars in sales, you would think would be a safe loan but, how much do they already owe, that is the question. If you dig deep enough you will probably find they are swimming in debt also.
    Nothing is a safe bet any longer.
    Hell On Earth Is Coming, PREPARE

  • Dave of OK

    If Japan has a major economic and population crisis, what will happen to Fukushima? The place is being held together with chewing gum and baling wire. If the workers do not show up in the crisis, there could be a major meltdown, that would leave half the island uninhabitable. The U.S. better prepare for some major immigration from Japan.

  • lulu

    God gave John Paul Jackson this prophetic message. The message is on Youtube… “The Perfect Storm” Many, many events have come to pass. Unless we humble ourselves and pray and turn from our wicked ways , Japan will experience a collapse followed by the Euro, then it ends w/ the USA.

  • Steve3

    I am sick of saying this, buy physical gold and silver and hold outside the banking system as well as keep cash ( most ) outside of the banking system. Europe are getting the public ready for Cypress type banking defaults. Also expect a default/reset of the debt eventually

    • davidmpark

      Yeah, that’s a good idea… except what will you spend it on if SHTF?

      Gold and Silver only have value as a currency if there are products with sellers and buyers. In a medium to worst case scenarios there probably won’t be either.

      If it’s just a currency crash, then gold and silver will be good to sustain your cash savings. The problem is that many stores cannot accept it due to their own inability to work with it.

      The best method to have gold and silver (I’d include nickels and pre-1982 copper pennies into that collection also) during a SHTF scenario is if you previously set up a black market with trusted individuals; all of whom are producing goods on their own out of raw materials. Pretty much a replacement economy.

      Other than that, it won’t do any good short term. No one will want to part with food, medicine, ammo, etc. in the worst of it. Might be good for a prostitute or two; other than that it’s not really useful.

      Long-term (5 years and beyond) and for after SHTF: precious metals and coins. Short-term (now to 5 years): grains, sugar, salt.

  • Jim Davis

    I remember in the 80s everyone was worried that Japan would overtake America. Well they have. In debt!

    • Mondobeyondo

      Not just debt. Think Toyota, Nissan, Toshiba, Sony, and a thousand more.

  • PD1979

    Japan is committing a ritual suicide?! Subarashi!

  • A D

    The people who pull the strings will manipulate all of this to their benefit. It makes no difference if the USA prints another 500 trillion dollars, when they get ready to pull the plug it will collapse like a cheap suit until then it is going to be a FAKE economy.

  • cracker

    Good Luck and Good Night ..

  • Cyber Revengeance

    japan must stop spending. are they out of there mind. Now they don’t earn that much but there living is lavish.

    In this process they may take the whole world with it.

  • Steve

    The Japanese GDP is 3rd largest in the world and they were only recently passed by China. That is much too big. They should have allowed their economy to shrink to a more manageable size decades ago.

    The fact is that Asian economic crisis’ in general throughout history have been the most brutal.

    When Japan falls, it could parallel China’s Great Leap Forward.

    • Spongeworthy_Bob

      It doesn’t matter how large their GDP is when the government debt to GDP ratio is 247 percent.

  • I really want to know if debt can go on forever.
    It seems like it can but will investors come to a point where they need their investments? That is the only worry. I’m guessing the real worries is when things crash at one point rather than steadily go down.
    Nothing has really gotten better since 2008, but there seems to be no real problems since. Does that not imply that rather than debt, big crashes are the issue?

    I live in Japan, and can tell you that its economy is far from bad. Most people work like crazy and it is really in the culture to work hard so I really don’t see Japan going under, but I can see investors losing out heavily.

    Even though finance is interesting, tracking who owes who and who will crash is just crazy, so I give up.

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