Risk of Japan going bankrupt is real, analysts say

[marmar]

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]

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.

[galileoreloaded]

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!!

[Art_from_Ark]

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.

[ZeitgeistObserver]

4. Same with Greece, and several other countries. n/t