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Japan's Credit Outlook Is Cut To Negative By Moody's

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http://www.bbc.co.uk/news/business-12533405

Moody's Investor Services has cut its outlook on Japan's credit rating to "negative" from "stable" citing concerns about debt levels.

Moody's currently rates Japan's government debt at an Aa2 level.

In January, rival rating agency Standard & Poor's downgraded Japan's credit rating from AA to AA-, also citing debt concerns.

Earlier this month, Japan was overtaken by China as the world's second-largest economy.

'Inexorable rise'

Japan has been trying to boost its economic growth and as a result government spending and borrowing has increased.

Moody's said that the government needed to do more to cut borrowing levels.

Japan currently has the highest government debt levels of any industrialised nation.

Shocking news, Japan apparently has a major debt problem.

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IIRC Japan has a huge debt problem. Good thing we are not in such a situation that our rating would be cut----- move over Dumbo your crushing my foot!

ome selected levels of Public Sector debt in different countries

US Gross Debt 2008 12,867.5bn 90.8% of GDP (EST) (US Debt)

Japan National Debt 192% of GDP 2009 est) 836,521 trillion yen 2007

Italy National Debt 115% of GDP (FT)

UK National Debt 68% of GDP (UK) [EXCLUDING, one assumes, Gordon's off balance sheet £4Trillion]

Other selected Levels of Public Debt as a % of GDP from 2009 est

1 Zimbabwe 304.30 %

2 Japan 192.10

3 Saint Kitts and Nevis 185.00

4 Lebanon 160.10

5 Jamaica 131.70

6 Singapore 117.60

7 Italy 115.20

8 Greece 108.10

9 Sudan 104.50

10 Iceland 100.60

11 Belgium 99.00

12 Nicaragua 87.00

13 Israel 83.90

14 Sri Lanka 82.90

15 Egypt 79.80

16 France 79.70

17 Germany 77.20

18 Portugal 75.20

19 Hungary 72.40

20 Canada 72.30

21 Jordan 69.90

22 United Kingdom 68.50

23 Austria 68.20

24 Ghana 67.50

25 Malta 66.20

26 Cote d’Ivoire 63.80

27 Ireland 63.70

28 Netherlands 62.30

29 Philippines 62.30

30 Norway 60.20

31 India 60.10

32 Spain 59.50

33 Uruguay 58.70

34 Mauritius 58.30

35 Malawi 58.00

36 Bhutan 57.80

37 El Salvador 55.40

38 Albania 54.90

39 Kenya 54.10

40 Morocco 54.10

41 Tunisia 53.80

42 World 53.60

43 Cyprus 52.40

44 Vietnam 52.30

45 Panama 49.50

46 Thailand 49.40

47 Costa Rica 49.30

48 Argentina 49.10

49 Turkey 48.50

50 Malaysia 47.80

51 Croatia 47.70

52 Poland 47.50

53 United Arab Emirates 47.20

54 Brazil 46.80

55 Finland 46.60

56 Aruba 46.30

57 Colombia 46.10

58 Pakistan 45.30

59 Bolivia 44.00

60 Seychelles 43.90

61 Switzerland 43.50

62 Sweden 43.20

63 Bosnia and Herzegovina 43.00

64 Mexico 42.60

65 Dominican Republic 41.50

66 United States 39.70

67 Yemen 39.60

68 Bangladesh 38.20

69 Denmark 38.10

70 Montenegro 38.00

71 Serbia 37.00

72 South Africa 35.70

73 Cuba 34.80

74 Gabon 34.70

75 Slovakia 34.60

76 Taiwan 34.60

77 Papua New Guinea 33.70

78 Czech Republic 32.80

79 Guatemala 32.70

80 Latvia 32.50

81 Ecuador 32.30

82 Syria 32.30

83 Ethiopia 31.70

84 Zambia 31.50

85 Slovenia 31.40

86 Lithuania 31.30

87 Moldova 31.30

88 Bahrain 30.10

89 Indonesia 29.80

90 New Zealand 29.30

91 Korea, South 28.00

92 Trinidad and Tobago 26.70

93 Mozambique 26.10

94 Peru 26.10

95 Tanzania 24.80

96 Macedonia 24.50

97 Honduras 24.30

98 Senegal 24.00

99 Paraguay 22.10

100 Bulgaria 21.40

101 Ukraine 20.70

102 Saudi Arabia 20.30

103 Romania 20.00

104 Iran 19.40

105 Venezuela 19.40

106 Uganda 19.30

107 Namibia 19.10

108 Australia 18.60

109 China 18.20

110 Hong Kong 18.10

111 Botswana 17.90

112 Nigeria 17.80

113 Angola 16.80

114 Gibraltar 15.70

115 Luxembourg 14.50

116 Cameroon 14.30

117 Kazakhstan 14.00

118 Uzbekistan 11.70

119 Algeria 10.70

120 Chile 9.00

121 Kuwait 8.20

122 Estonia 7.50

123 Qatar 7.10

124 Russia 6.90

125 Libya 6.50

126 Wallis and Futuna 5.60

127 Azerbaijan 4.60

128 Oman 2.80

129 Equatorial Guinea 1.10

Edited by Realistbear

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If I ran my monetary affairs like Japan I would be declared bankrupt. Given the ratings agencies continual downgrades with no effect i.e the stock markets keep marching upwards I conclude there is nothing to see here

move along, move along ... :ph34r:

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Shocking news, Japan apparently has a major debt problem.

Nice series - however (and I suspect I'm not alone in this), I remain confused. How can everyone be in debt? In debt to who? The fairies?

I mean, in my mind the scenario goes like this:

"Hi, our country is currently concentrating on training diversity co-ordinators, and consequently we need to borrow some money to buy everything else necessary for survival. We expect the demand for diversity co-ordinators to really pick up over the next few years, so will pay you back real soon."

"Not a problem - here you go. And, of course, if that diversity thing doesn't pan out, your children can just slave for the rest of their lives in a high-tax environment to pay it off."

"Cool."

So, we take the money and use it to buy stuff... so, my question is - why don't the countries we bought stuff from have a surplus rather than a debt, and why does who ever leant us the money have a debt? If everyone has to borrow, doesn't that imply not enough stuff is being produced by anyone?

This nonsense just does my head in... it makes Alice in Wonderland a description of a rational, well-organised society...

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If I ran my monetary affairs like Japan I would be declared bankrupt. Given the ratings agencies continual downgrades with no effect i.e the stock markets keep marching upwards I conclude there is nothing to see here

move along, move along ... :ph34r:

Our household debt to income ratio is circa 230%, and we cannot print our own cash.

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So, we take the money and use it to buy stuff... so, my question is - why don't the countries we bought stuff from have a surplus rather than a debt, and why does who ever leant us the money have a debt? If everyone has to borrow, doesn't that imply not enough stuff is being produced by anyone?

This nonsense just does my head in... it makes Alice in Wonderland a description of a rational, well-organised society...

Never fear my pretty, allow me to explain.

All countries, operate a banking system, which takes the currency issued by that county and lends out out among its own population, levering up the overall economy to say, 8:1 or something. So before this country might lend our country anything, they are all in debt to themselves.

Why? Because currency is scarce, people want it, it is going to get lent, no matter what you do.

Why? Because currency alone has no value. The currency is 'backed' by the debts denominated in it. The debts create demand for the currency and make it a viable means of exchange,

Consider the case where there is only one pound coin in all of britain but the same debt as today. This doesn't matter if that coin is moving from hand to hand very very quickly. Any amount of currency will do as long as it moves fast enough. What this should tell you, is that currency itself is not relevant macro-economically, debt is.

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Nice series - however (and I suspect I'm not alone in this), I remain confused. How can everyone be in debt? In debt to who? The fairies?

Japan's middle aged-elderly have been giving their cash savings to the Japanese government in exchange for bonds (JGBs) for years now. On paper, cash has been a poor investment while government bonds have done (slightly) better.

The problem is that there is a strong Ponzi dynamic to all of this. The generations that paid into JGBs were the ones that did well out of Japan's postwar economy. High growth, high employment, high savings rates, cheap housing. Meanwhile, the younger generations who are expected to pay them back (out of taxation) or buy the JGBs for their own retirement have experienced high unemployment and a high cost of living and consequently are saving very little.

As it ages demographically, Japan is fast running out of people who can afford to buy into the Ponzi scheme. In addition, the middle aged-elderly are going to have to start cashing in their JGBs soon to fund their own retirement. The Japanese government is a fiscal disaster, so there is really no way they can afford to start paying back JGBs out of tax revenue. Either they are going to have to start imposing haircuts on Japanese pensioners, or the central bank is going to have to start printing yen so the government has cash to pay them back with.

It's a big mess, but lord knows when it will start to play out. Could be tomorrow, could be another 20 years.

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Either they are going to have to start imposing haircuts on Japanese pensioners, or the central bank is going to have to start printing yen so the government has cash to pay them back with.

Given that Japan does deflation better than anyone else, what are the negative consequences of such a move?

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Never fear my pretty, allow me to explain.

...

Okay, so between you and dorkins, I'm sort-of getting there... the logic-bomb (from a simple bear's perspective) is that if I owe you a tenner and you owe fred a tenner and fred owes me a tenner, then debt=0. However, if I owe you a tenner and I owe fred a tenner and you owe fred a tenner, then I have a debt of £20, you have a debt of 0, and fred's good for £20...

The person whose absence is most keenly felt in the real-world seems to be fred...

However, if 'fred' isn't really a person, but is, in fact, surplus savings (whether that's Japan's JGBs or pension funds or whatever), then fred is essentially ourselves... or something... still does my bloody head in.

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Given that Japan does deflation better than anyone else, what are the negative consequences of such a move?

Well Japanese government debt is 2x GDP, so if the central bank bought all of it by printing yen that would be the equivalent of the Bank of England quantitatively easing £2.8tn i.e. well over 10x what we have done so far. Such a massive rise in the quantity of base money could set off hyperinflation.

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However, if 'fred' isn't really a person, but is, in fact, surplus savings (whether that's Japan's JGBs or pension funds or whatever), then fred is essentially ourselves... or something... still does my bloody head in.

The Japanese government owes the money to older Japanese private individuals. If it fails to pay, those people lose their life savings. It's as simple as that.

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Never fear my pretty, allow me to explain.

All countries, operate a banking system, which takes the currency issued by that county and lends out out among its own population, levering up the overall economy to say, 8:1 or something. So before this country might lend our country anything, they are all in debt to themselves.

97:3

Why? Because currency is scarce, people want it, it is going to get lent, no matter what you do.

Why? Because currency alone has no value. The currency is 'backed' by the debts denominated in it. The debts create demand for the currency and make it a viable means of exchange,

Taxes, licences and fines. The fear of being ass raped, of going homeless and potless due to the taxman in prison provides the value.

Consider the case where there is only one pound coin in all of britain but the same debt as today. This doesn't matter if that coin is moving from hand to hand very very quickly. Any amount of currency will do as long as it moves fast enough. What this should tell you, is that currency itself is not relevant macro-economically, debt is.

Ah the old "one pound can pay off all debts" nonsense.

You owe me a fiver. I want it all today. Show me how you pay me with one pound. :lol:

Everyone owes so much money to the banks, and they dop that because the banks commit mass fraud. The politicos go along with it because they get massive kick backs and to socially engineer with the proceeds, the public sector because without it they'd all have to get actual jobs, the media because they also get a place at the trough etc etc

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The Japanese government owes the money to older Japanese private individuals. If it fails to pay, those people lose their life savings. It's as simple as that.

This is the essence of the fraud.

If there really were savings, there would be a pile of wealth that was being drawn from. instead people have been sold investment under the guise of savings (and it's forced investment as well, the people paying for it don't actually want to.)

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This is the essence of the fraud.

If there really were savings, there would be a pile of wealth that was being drawn from. instead people have been sold investment under the guise of savings (and it's forced investment as well, the people paying for it don't actually want to.)

What would a 'pile of wealth' look like? How would it differ from a pile of shares/bonds/etc?

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What would a 'pile of wealth' look like? How would it differ from a pile of shares/bonds/etc?

Savings is real stuff, put by and not used for anything.

A house you own outright with no debt on it is savings. That is, you can sell/trade it to buy food with. Same goes for gold, bikes, loaves and middle aged spread. Real stuff, put to one side and not used, owed, owing or with any other claim on than your own.

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Savings is real stuff, put by and not used for anything.

A house you own outright with no debt on it is savings. That is, you can sell/trade it to buy food with. Same goes for gold, bikes, loaves and middle aged spread. Real stuff, put to one side and not used, owed, owing or with any other claim on than your own.

But you use a house.

So basically, your idea is that you should have a pile of 'stuff' which you have no use for other than to sell when you reach a certain age. And for some reason it has to be physical commodities. Is there any particular reason for this?

Edit to add: And how would it apply at a soveriegn level?

Edited by fluffy666

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But you use a house.

So basically, your idea is that you should have a pile of 'stuff' which you have no use for other than to sell when you reach a certain age. And for some reason it has to be physical commodities. Is there any particular reason for this?

Yes, because it's real.

I'm not saying don't invest in stuff, just outlinign the difference between savings and investments. Shares in a company are mostly an investment, unless you have bought to sell off the assets.

Edit to add: And how would it apply at a soveriegn level?

It doesn't, it can't.

States only destroy wealth, they inherently cannot save or invest.

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But you use a house.

So basically, your idea is that you should have a pile of 'stuff' which you have no use for other than to sell when you reach a certain age. And for some reason it has to be physical commodities. Is there any particular reason for this?

Edit to add: And how would it apply at a soveriegn level?

Yep, the point is you can't just click a button and make more of them where as money you can.

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You can if you order them prepack off the internet. :ph34r:

Ok Ok, so you cant just magic them out of thin air, they take effort and more importantly raw materials (e.g. commodities) to make them

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Ok Ok, so you cant just magic them out of thin air, they take effort and more importantly raw materials (e.g. commodities) to make them

If they had any purpose or value in and of themselves it wouldn't matter.

Your house doesn't become magically less house and therefore of less use just because somebody else somewhere makes more houses.

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Because currency alone has no value. The currency is 'backed' by the debts denominated in it.

Notwithstanding Injin interjecting about value (and he would have my agreeable ear) that statement is not true.

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Okay, so between you and dorkins, I'm sort-of getting there... the logic-bomb (from a simple bear's perspective) is that if I owe you a tenner and you owe fred a tenner and fred owes me a tenner, then debt=0.

lets get it right:

if I owe you a tenner and you owe fred a tenner and fred owes me a tenner, then debt=30, assets =30, net financial assets =0.

However, if I owe you a tenner and I owe fred a tenner and you owe fred a tenner, then I have a debt of £20, you have a debt of 0, and fred's good for £20...

freds only good if a means to clear the debts exists, and that means is in the hands of you. In the above case my net financial assets are 0. My debt is 10.

The person whose absence is most keenly felt in the real-world seems to be fred...

fred is in general the older generations who have paid down debts and acquired assets in the process. In general, you in this example are the young, who must borrow to acquire the assets from the old, and the business sector, who need it to build ventures.

However, if 'fred' isn't really a person, but is, in fact, surplus savings (whether that's Japan's JGBs or pension funds or whatever), then fred is essentially ourselves... or something... still does my bloody head in.

correct, the vast majority of the vast UK private debt is owed to ourselves. Same in Ireland.

The picture gets more tricky when you consider that the means of clearing private debts is to use government debt (cash is government debt).

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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