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Risk of Japan going bankrupt is real, analysts say

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marmar Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Apr-12-10 06:34 AM
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Risk of Japan going bankrupt is real, analysts say
Raw Story / By Agence France-Presse



Risk of Japan going bankrupt is real, analysts say

TOKYO — Greece's debt problems may currently be in the spotlight but Japan is walking its own financial tightrope, analysts say, with a public debt mountain bigger than that of any other industrialised nation. Public debt is expected to hit 200 percent of GDP in the next year as the government tries to spend its way (...)

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Art_from_Ark Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Apr-12-10 06:45 AM
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1. I don't know about Japan going bankrupt, but
if the government wants to stimulate the economy, it should end the practice of awarding all contracts, even cheap ones, merely on the basis of lowest bid (that is, without concern for quality). This results in a lot of money flowing out of the country and people in Japan who are offering a quality product for a slightly higher price could be earning that money and spending it in Japan.
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galileoreloaded Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Apr-12-10 08:35 AM
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2. So when japan needs cash, and needs to delever, what do they sell
and flood the market with???

That's right, US Treasuries!! Yeah!!
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Art_from_Ark Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Apr-12-10 11:06 PM
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3. Japan won't be dumping US Treasuries
Dumping US Treasuries means the yen would get stronger, which is something the government and exporters don't want.

Also, if the Japanese government needs cash, it could raise a bunch from domestic investors just by offering bonds that pay 2-3% interest-- and it would get back 20% of that interest in automatic taxes.
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ZeitgeistObserver Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Apr-12-10 11:11 PM
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4. Same with Greece, and several other countries. n/t
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