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Japan Credit Rating Downgraded Over Ballooning Deficit

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http://www.guardian.co.uk/business/2011/aug/24/japan-credit-rating-downgraded

Credit ratings agency Moody's criticised the instability at the top of Japanese politics on Tuesday as it slashed the country's credit rating and warned that its mountain of debt needed to be tackled.

Moody's cut Japan's rating by one notch to Aa3, its fourth highest rating, and said a tougher deficit reduction plan was urgently needed. The move came just hours before Japan took fresh steps to help corporations cope with the strength of the yen, including a $100bn (£60bn) fund to help fund overseas acquisitions.

Japan has the highest debt-to-GDP ratio of any country in the world, with its borrowings estimated to hit 233% of annual economic output in 2011. Moody's said the rapid turnover of Japanese prime ministers – five different men have held the job since the credit crunch began in August 2007 – had prevented the government from turning "long-term economic and fiscal strategies into effective and durable policies"

Still at least they aren't coping with the worst nuclear disaster.......

Good to see the credit rating agencies up to speed, the problem is clearly the past 4 years and nothing to do with the past 20 odd years where they've repeatedly ran up debt in a vain effort to prop up their economy after a bubble burst.

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America made them into an idiot nation of worker ants.

Maybe the Samurai spirit can fire up the nation long enough for them to forget that they are slowly dying of radiation sickness and genetic damage, on an island with a geography that would make the Atlantians envious.

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Why don't they just reduce interest rates and do some quantitive easing to boost the economy?

Why don't they invest in a credit based economy where house prices are the true demonstration of wealth.

After all they are just a small island and space is limited.

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Why don't they invest in a credit based economy where house prices are the true demonstration of wealth.

After all they are just a small island and space is limited.

They did it in true Japansese fashion until 1990. For some reason they stopped after that despite the shortages of land and all that. I wonder why.

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They did it in true Japansese fashion until 1990.

Indeed, and they've have only got away with it until now because there pension savers turned to investing in the only thing 'guaranteed' to pay you money back - Japanese Gvt Bonds.

Their buying of government debt has supportredf the crazy government 'make work' schemes for 20 years. But now the tide is turning as the demographics mean the savers want their money and want to sell JGBs. So the gvt will have have to sell even more bonds to someone else to fund their deficit spending, and to pay back their domestic investors. Who? Will you buy them? I'd buy them at a yield of 30% or so. They will default. And sooner than you think. The sun is setting over Japan too.

Reuters News Story - GPIF sells JGBS

Edited by no accountant

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  • 338 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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