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Guest Post: Japan's Perpetual Motion Debt Machine
Submitted by Charles Hugh Smith form Of Two Minds
Japan's Perpetual Motion Debt Machine
Perpetual motion is impossible, but Japan has managed the illusion of perpetual debt for 20 years.
Perpetual motion--a machine which produces more than it consumes indefinitely, without any visible energy source--is impossible. So too is an economy which consumes more than it produces and fills the gap with debt. Yet Japan has maintained the illusion of a perpetual motion debt machine for 20 years.
Back in 2001 I wrote an article describing Japan's Runaway Debt Train: 40% of its annual budget was borrowed, and much of its tax revenues were gobbled up by interest payments on its mind-boggling public debt.
Nine years later, nothing has changed: welcome to perpetual motion. Japan's government approved a record 92.4 trillion yen ($1.1 trillion) budget for the 2011 fiscal year, of which 44 trillion is borrowed, 7 trillion is lifted from various trust funds and a mere 41 trillion is tax revenues.
So roughly half (48%) of Japan's Central State spending is borrowed.
So Japan has borrowed almost half its government expenditures for a decade or so. Even at super-low bond yields of around 1%, it now costs 21 trillion yen to service that ever-growing mountain of debt. So 23% of the government's budget is spent on servicing debt. Roughly half of all tax revenues (51%) are devoted to paying interest on public debt.
The more Japan borrows, the more revenue must be devoted to paying interest.
Japan's total bond issuance in fiscal 2011, including roll-over of existing bonds and the additional 44.3 trillion, is 169 trillion yen--184% of the entire annual budget.
Despite a decade of vast "pump-priming," prices are still declining in Japan: the core consumer price index, which doesn’t include volatile fresh-food prices, was 0.5% lower in November than in the year-earlier period. Compared to October, the core CPI lost 0.1%. (Apparently the Japanese government has adopted the useful legerdemaine of "core" and "non-core" consumer price indices.)
Has Japan really invented a perpetual motion debt machine, in which consumption can exceed revenues by 50% forever? For an answer, we must look at culture and demographics. Japan is a very traditional society in key ways, and the citizenry have historically been prodigious savers. They have accepted low rates of return and other restrictions on their investment options as part of their social contract.
As a result, most of the gargantuan public debt in Japan is owed to its own citizens, life insurance companies, pension funds, etc. Its high savings rate and conservative culture has enabled a self-funding perpetual motion debt machine.
But the nation's demographic tides have turned against the self-funding. Given Japan's low birth rate and longevity, the generation which is now retiring is outsized compared to the younger generation which is supposed to fund the retirees' retirement. As globalization has eroded the old social contract of lifetime employment and high salaries, many of the younger generation earn a mere slice of their parents' wages.
Predictably, Japan's savings rate has plummeted as retirees start withdrawing their savings, and many younger workers find their incomes too low to save anything.
Japan may well try the Federal Reserve's approach of printing credit to buy government bonds--a perpetual motion debt machine if there ever was one--but Japan's debt may well have reached a critical mass that is simply too large to monetize without triggering serious consequences.
In the U.S., we are borrowing "only" 41% of our Federal expenditures, roughly $1.4 trillion a year. The U.S. annual borrowing is equal to roughly 58% of its tax revenues of $2.4 trillion. The Federal deficit is about 10% of the nation's entire GDP of $14.5 trillion.
Clearly, American politicos and recipients of Federal largesse are hoping that its debt will also be a perpetual motion machine. But Americans don't save much of their income; while the Chinese sock away roughly a third of their income, Americans save a meager 5-6%, and that number is dropping as the urge to consume overwhelms the culture's brief interlude of fiscal prudence.
Spendthrift consumption-obsessed America cannot self-fund its gargantuan government debt, so it must rely on external sources and the Fed's monetization. Despite the pretense of "concern" coming from the politicos in Washington D.C., America's "leadership" (barf) clearly believes that the U.S. government can operate a perpetual motion debt machine like the Japanese have done for an entire generation.
But just as perpetual motion is impossible, so too are perpetual motion debt machines which consume more than they produce via the "magic" of borrowing.
The end-game is not yet in sight, but the rumblings can be heard and the lightning flashes are now visible over the horizon.
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Despite the pretense of "concern" coming from the politicos in Washington D.C., America's "leadership" (barf) clearly believes that the U.S. government can operate a perpetual motion debt machine like the Japanese have done for an entire generation.
So far, so good.
This is the beauty of a global fiat money system and the transfer of generations of wealth through an increasing debt responsibility and the ability to marginalize the standard of living for all. It is a stealth wealth transfer mechanism and the people accept it as a part of being a "citizen" and "patriot".
The question I have is whether the power-elite actually believe this course of action is sustainable, or more likely, that they not only understand the implications of peak resources, but have been busily preparing to be survivors while the rest of us have been artfully juked. In other words, perhaps the entire financial farce being played out is simply a distraction from the very real work of making sure a certain chosen minority lives to see another day.
Doing the math, we have 2% who know what's goin' down and currently control the power mechanisms. Combine this with another 2-3% who understand the same dynamics, but posses no real power. So, what about the other 95%? Well, it is these who are slated for the salt mines in the coming neo-feudal society.
ZH has been on the very cutting edge ever since Tyler rolled-out his first tiny effort on the old blog two years ago (Jan). To maintain relevance in an environment where the happy mask is rapidly being replaced with the iron fist, I would posit that his target audience is the powerless 2-3% who are looking for information & skills to avoid being added to the 95-centers.
Which is where stealth eugenics comes in, to my thinking. You are right on the money here, since they control the levers of the machine. I think they are taking back what they had lost through the middle class expansion of the last hundred years and as peak commodities reveal limitations, the population will be reduced to help maintain civil controls and still maintain an acceptable workforce.
Which means the elderly and uneducated and untrained workers will be sacrificed through the eugenics programs. To me, this is the combination of foods, medicines and medical care, loss of entitlements, vaccinations and created pandemics with other methods to cull the population globally.
The methods of the power elites have been on display for centuries, it is the general ignorance of the "95%" that allows and even encourages their deprecations. Good point BK.
Don't give those in power too much credit. They are lucky fools (right place at the right time who have certain selected traits e.g. good looking, charismatic, simpletons) who know less than we do. They are simple arrogant players locked in an incentive structure / engine that has run out of oil. It will run until it doesn't... then things will move pretty fast. Remember even Robespierre was victim of his own movement having his neck cut by the national razor.
The key, I think is to stay relatively nimble, flexible, small and in the margins. Government's are large clunky and stupid bureaucracies. Just stay out of their way, and with a little luck (chance unfortunately, just as for the one's in power, can cut both ways) you'll do pretty well. I just wish I had more resources to deploy into resources.
I suggest you study your enemy (the elites) a bit more before you refer to them as lucky or fools. They are neither, nor are they part of the government. That is why they have employees, to take care of things for them. See other article on wealth transfers and tax avoidance for example.
While your strategy is sound, you only need to think in these terms because of the machinations of the Elite. If you truly lived in liberty or had to merely evade the administrations of fools, you would not need to secrete yourself into the "margins".
Well, I've spent plenty of time working with/for the gubmint on high profile projects civilian and military. After working with a fair number of high ranking individuals I can honestly say that most, or I should say, enough of them are not exactly the best and brightest. You have to understand that they're human beings and human beings have weaknesses. These particular people tend to think in a very binary way, and why wouldn't they. Binary (black and white) thinkers tend to be attracted to government and military service. They've (many, but not all) been educated at most of the same higher learning institutions and view history with much of the same distorted narrative.
The individuals are humans, rational individuals, but they are parts of a machine. The machine is made of people putting in their 40 hours, making the easiest decisions that won't endanger their own careers. By nesting and networking thousands of such people with intertwining feedback loops of incentive structures, you end up with a clumsy headless machine. That is our government, and most other modern governments. They are not inherently evil, but have the capacity to become evil, especially when given too much power.
I suggest staying in the margins, so much as to not become a target of the IRS, or the state department (Assange). When governments are in crisis, the individuals in charge look for someone(s) to blame. Wise people will avoid being a target, knowing that you will also have alot of warning to get moving. Leave being a target to greater more arrogant, or suicidal fools. That's all I'm saying. Don't be a convenient target for some bureaucrat to shift blame to.
You know, I don't think this is all a "power-elite" thing. I'm not a big conspiracy buff, but I do believe that common interests align themselves. I think this is a case of craven politicians and limited political favors...really no different from us here in the U.S. Politicians will not and cannot make the hard fiscal choices. It is actually a function of democratic socialism. We will always vote for more stuff and lower or limited taxes. The difference between the two is called debt. That's the gap between what we ask of government (plus inefficiency and waste) and what we really want to give government in our personal revenues. Power elites like banks and financial have to try to make this fact of life work. Whether it's clever financing or currency shenanigans, they have to work around our perpetual debt machines. All this must fall one day. With aging populations, smaller new generations and high economic costs, the debt machine will grind to a halt eventually. My guess would be that is when the autocratic forms of socialism take over. Could be some libertarian type political or physical revolutions, but that's a stretch.
the good ol days, remember the Weekend Reading suggestions??
http://zerohedge.blogspot.com/
and even older school..
http://seekingalpha.com/article/119414-will-pimco-be-needing-a-bailout-soon
##roughly $1.4 trillion a year. The U.S. annual borrowing is equal to roughly 58% of its tax revenues of $2.4 trillion
a few mistakes... actaully deficit a bit bigger.. 1.6 -7 trln $ (see us treasury site)
that 1.4 is pro forma incl SS money
and revenues are less.. around 2.1-2 trln $..
so US FEDERAL GOV print 0.8 $ for each 1$ in revenues..
and this not incl FANNY/FREDDY debt ( 5-6 trln$)
either US or JAPAN is fucked totaly and of course US is not gonna have
20+ years of debt printing.. its gonna end in 2-3 years max,,
HYPER INFLaTION .. OF course..
alx
Nice work, Alex.
Thanks to QE2, I believe 2011 is destined to be the "break-out" year where the US will have to admit that it borrows more than it collects in taxes.
Fortunately, MC Escher's drawings prove perpetual motion works:
http://acrossthestreetnet.files.wordpress.com/2009/02/escher-economy1a.jpg
Like I said,to destroy once and for all the trust in the US dollar and consequently all fiat currencies, you need oil shortages. That's what breaks trust. No amount of QE can top this axiom. Most people live in delusion. A reminder coming from the physical world is the only way to kill the fraud aka exponential growth in a finite world.
Destroying the trust is not the goal. It is a side effect. Exploiting the trust is the goal.
Gee, If the Japanese can do it why can't we?
PS. Don't answer.
Tontine bitchezzz!
http://en.wikipedia.org/wiki/Tontine
The ultimate endgame.
@mercury
John Brunner's classic sci-fi novel "Shockwave Rider" featured a federal government funded by a lottery. Everything old is new again.
Does the tontine have covenants preventing murder of the other participants?
The Ponzi Pyramid Scheme will continue unabated as long as we have:
- Fractional Reserve Banking
- OTC Derivatives
- The Federal Reserve and Treasury Dept. manipulating markets
I don't see any end in sight for the endless "Boom and Bust/Wash, Rinse Repeat" cycles any time soon.
Right now, we are still in the "Boom" part of the cycle.
Yeah. And I sure hope all those new food stampers, jobless and homeless are taking advantage of their current boom situation so as to be prepared for when we hit the next bust cycle.
These boom times are great. Once we hit a quadrillion debt everyone will be rich beyond imagination. I just wish we could get there faster.
Get your calls in on the debt getting bigger. Can't lose.
Don't cash 'em in. Save those aluminum cans...the redemption is gonna double. You'll be rich.
I argued weeks ago that this could go on for two or three decades before the real shit hits the fan. Thanks for supporting my thesis with this article.
You missed the part where japans citizens, who save a lot, fund most of the debt. monetizing debt and relying on frenemies to finance our glutinous ways is not going to work for multiple decades.
Consider this: Japan ran up this debt without spending like a drunken sailor on national defense. China will appreciate having some high-tech to copy for their troubles when they take her back because we can't borrow from China to proxy fight anymore.
Back in April you were going all squirrelly about the European bust. Your flavour changes with the season.....some thesis.
How is a euro crash incompatible with more American can-kicking exactly?
The boom was over in 2002, the past 8 years have been a charade, the government, the Fed and the media have colluded to plaster over the cracks of an edifice that is coming down as soon as the USD loses reserve currency status (China and Russia have already agreed to start trading oustside the USD). Your markets are so much Kabuki theater. The Fed and his global banker cronies had the audacity to think that they could tame the markets and the business cycle with it, and we are all about to pay for their arrogance. You can only keep taking more viagra so long. Sooner or later you will end up in the hospital or the morgue if you don't rest and have something besides more pills and booze.
Wish you were right, but I see an end to the Ponzi when the world refuses to accept USD.
Can't keep giving other CBs $9 Trillion under the table to stay on board.
I'm pretty sure we've already lived the boom bust cycles and they're behind us. Good times.
$600T in OTC market for derivatives is mindboggling and don't see how the underlying bad assets can unwind.
The only reason it's worked for this long is because of the massive growth from the global high-tech revolution that we all enjoyed over the last 20 years.
I feel confident that this system will fall during the global depression that we are entering into now. I wish I knew what that collapse will bring. If you're believer, now is the time to start praying that we can keep it on the rails during the next 20 years.
Sorry to destroy your illusion. The system will not fall during this depression and for the next 48 years (at least)
It is all a consumption game and enough resources exist to keep the game going for at least 48 years.
Thank God!
I was starting to worry, thanks for clearing things up.
I love predictions 48 years out. They are always deadly accurate. Now if you will excuse me I have to take my flying car home where my robobutler has prepared a fabulous meal in a pill for my enjoyment.
Accurate as a minimum can be.
Two ways out of the current scheme:
-people at the bottom (on a world scale) refuse to trade their commodities and reject the USD. So unlikely that it is to be deemed impossible.
-the system runs out of resources. The only one likely at present days.
It is all a consumption game. The first thing I checked in 2008. I probed a 50 years horizon. Gave out out green light. Now it is 48 years.
Can be expanded to 50 years with no blink due ample safe guards for the computations.
What does that even mean? Are you writing in English?
Damn - now I'm worried again.
Well, usually, US citizens are getting uncomfortable with broken english.
That is because command over a language includes the capacity to understand broken versions of it.
So when US citizens or english native speakers struggle to understand broken english, it sends them back to their unperfect command over their language. As US citizens have a self inflated ego, which leads them to believe they command their language perfectly, well, it does not go fine anytime they are shown how the real depth of their abilities...
Duplicity is a surname for US citizens. Putting in some doses of reality now and then is rather enjoyable.
I've heard many brilliant people speaking broken english that left me enlightened. Your inability to write well, coupled with your lack of (economic?) knowledge leads me ....... Fuck I'm responding to a troll
Give him credit, he speaks fluent bullshit.
"probed a 50 years horizon" lol
Save the focus on the broken version of english, that is nothing substantial.
Lack of knowledge?
I'd like to read a substantial contradiction, not ad hominems (which might indicate who is the troll by the way)
As to buying bonds and the likes, one of my sports coaches had a few catch sentences like "if you start thinking like a loser, you are already a loser"
This mentality is ingrained in the US so much that they can not think of a game without thinking of themselves as winners.
The game will go on with you being a loser or not. It will certainly not stop as you feel you are about to lose. Bear with it.
Which resources are you considering?
What growth in consumption are you taking as a given over that horizon?
Does your modeling account for climate change?
just buy 100 year bonds and relax.... and tell your city mayor to sell 75 year rights to parking meters for one lump sum lottery payout to keep the raises going
But we don't have any meters and I make more than the mayor.
Yeah thanks, your exhaustive multidisciplinary cataloging of all resources their expected uses and exhaustion rates is very appreciated.. Now what was the plan for the 577th month?
Euh, yes, this part of the job was already done. Data are available and easy to access. My contribution to cataloging is extremely small.
So what? Let's me guess, nobody has a map and that is why you are asking for a plan?
Waoooo. The scam that it is possible to produce more than you consume.
Wonderful.
Speaking of Japan, I just had some supermarket sushi... SUPERMARKET SUSHI!!
wegmans sushi is good in a pinch...
Ah, another Rochester native?
Was the supermarket in Japan?
And just look at how far Japan has come in the past decade in keeping up with other Asian countries in economic growth and development? They have lost serious ground and China is just pummeling them. It is easy to live on borrowed money if you don't mind becoming a debt slave in the end. This 20 year plan is crazy, it is only setting their people up for the big fall. In the end when interest payments exceed revenue they will be done and America is now on the same plan which doesn't ensure a prosperous future for our children.
japan is so into virtual reality and robots they will be fine with wall street taking them over
The end-game is not yet in sight, but the rumblings can be heard and the lightning flashes are now visible over the horizon.
I disagree. This is the end game. People are fffffeeeeeeddddd up with this sheet.
who? commenters or people at the mall? it is VERY hard to find anyone who has the capacity and the resolve to actually converse about any of this. Most get really mad and flustered since they 'don't know nutin about that shit and we all gonna die anyway from global rare earth warming or something...'
It is painful to watch their eyes glaze over or, worse yet, give you the "oh you poor dear" look like you're the one who is bereft of clues.
Actually, Japan's government debt is sustainable for as long as Japan remains a net creditor or at least a non-debtor nation. Japan has very low rates of private, corporate and household debt. Add them all up, and throw in Japan's forex reserves, and Japan's total debt-to-GDP ratio is around 250%.
In a way, Japan has been very lucky to escape the neoliberal era with minimal damage. Yes, there was a disastrous real estate bubble, but the value of land never goes to zero, unlike the value of CDOs, which are backed by zip.
Also, Japan's East Asian neighbors are very, very careful (due to bad memories of Japanese colonialism) about allowing Japanese capital to own major stakes of their economy. So there's nowhere else for Japanese capital to flow than into Japan.
Detroit may well stay at zero
http://www.freerepublic.com/focus/f-chat/2349112/posts
My hometown...it was nice, before the riots.
The questions which I would like to ask are the following.
1) When does it end? It has already ended for Greece and Ireland and almost for sure for Portugal. Why has the perpetual debt machine not broken down. I don't buy the fact that just because the majority of debt is owned by the public that it doesn't respond to pressure. A large hedge fund trader or a group of smaller ones could target as little as 5% of the available for sale inventory and make a mockery of all those faithful Japanese robots.
This type of debt machine doesn't survive without institutional buyers also drinking the kool-aid.
2) What is the result of Japanese austerity? A much weaker Yen? IMF bailout? Default? I don't think the IMF has the funds to bailout Japan.
3) If Japan did default would the effects be greater or worse to the economy, given that most of this debt is owned by the public and not big foreign banks which could cause contagion?
IMF bailout? If they would have a hard time with Spain, or Italy, bailing out Japan isn't even within the realm of possibility. The Japanese economy is the third largest in the world, behind only the (also bankrupt) United States and the "Eurozone"...My question is somewhat different? What happens when ALL developed nations are broke?? Does everyone simply agree to start over?? What kind of mass chaos and civil disorder would that cause? When you look at the Western world, and also Japan and the severely over-heated and over-extended Chinese economy, what's left? Brazil?? Russia?? I think there is a serious possibility that in the end, Europe (including the also bankrupt UK!!), the US and Japan agree to simply wipe out large portions of debt. This will be disastrous to the entire world economy of course, and destroy the savings of literally billions. Mass starvations time. Anarchy time. Major world war time. I just hope I can live through what is coming (I've tried my best so far to prepare) and see the other side of the massive upheaval that is coming like a frieght train right at all of us...
I agreee with you on many points, but, I usually try to think of the easiest solution rather than the most complex.
To me the resetting of major amounts of public debt might end up being a non-event where a lot of people and companies declare bankruptcy, but continue functioning.
But hell, anyone who says they really know is just blowing smoke.
After all, Lehman went bankrupt but people still work for them or one of their many zombie corps.
All the three live on a Ponzi. You dont agree to simply end a Ponzi. You are forced out of a Ponzi. Because living off a Ponzi is good. You want to live off it as long as you can.
Jubilee, defaulting on the debt... Stories that show a wish to deny what debt is.
The debt is been defaulting on for decades now. The whole game is to get deeper and deeper into debt (with no prospect of paying it back)
The end game will not be agreed on. It will come when going deeper into debt will no longer be physically possible because of an insufficient amount of goods to buy through debt.
The United States does the same thing, but the citizens have no savings. So Bernankee is destroying the only wealth left, which is that of the aging seniors. The United States runs around like a beheaded chicken spewing free blood money everywhere trying to prop everything up until eventually, the chicken dies. Survival of the fitest, logan's run, and last man standing will have new meanings. Ashton gets it.
RE: US citizens & savings
Are worker pension plans and Social Security included as "savings"?
I suspect that US workers actually do "save", or at least believe they are saving through the paycheck deductions made to government or private pension plans. Who wants to save at the ridiculously low interest banks pay?
The problem is that their "savings" (pension plans, 401s, homes, stocks, etc.) have been appropriated by the government and financiers for other purposes and/or self-enrichment.
Now, through a combination of military and financial excess, lack of socially useful and beneficial investment, the system-wide fraud is unraveling.
And it is already unraveling, well before the impact from any demographic change.
Any idea as to why YEN so strong?
Any idea as to why YEN so strong?
Two big reasons are:
Twelve years of ZIRP and "economic warfare, Chinese-style".
Read the section on Japan
http://viewfromthewilds.blogspot.com/2010/12/2011-what-does-it-hold-for-world-part-1.html
Good article, but with a needed data correction. I pulled this data from the US Treasury and it was confirmed in a WSJ article two weeks ago.
As of Dec 10th, the US Treasury confirmed that the US government is borrowing 49.65% of its spending for the first two months of this fiscal year, NOT the 40% mentioned in this article.
And that was BEFORE Obama's tax cut deal with the Republicans that will add $120 billion of debt because of the Social Security tax reduction and $56 billion because of the unemployment extension. Thus, it is almost certain that the US government has now CROSSED the threshold of borrowing HALF its budget.
Armaggedon -- on its way to an America new you!
no article on japan is complete unless one takes into consideration the high (45-48%) inheritance tax, and typically how little japanese can do to avoid them.
when govt stands to collect on such a high proportion of their assets, it puts the domestic borrowing numbers into a new perspective
Do you know what is funny about the Japanese situation? They actually have even more savings locked up in the carry trade around the world. The Japanese changing demographics imply that we will see those savings start to head back onshore, returning the liquidity that the BoJ created for the world in the last 20years to Japan (average gross savings of 15% of GDP per annum vs deficit of 5% of GDP per annum implies a lot of savings off-shore)
Japan might eventually collapse from its debt load, but that day is still sometime away. In the mean time, the returning liquidity will boost asset prices domestically and may turn the tide on Japanese deflation and defict).
http://viewfromthewilds.blogspot.com/2010/12/2011-what-does-it-hold-for-world-part-1.html
Excellent point. Fantastic.
I did not think of that...
Thanks.
This is just plain wrong:
["So too is an economy which consumes more than it produces and fills the gap with debt. Yet Japan has maintained the illusion of a perpetual motion debt machine for 20 years."]
A country which has a current account surplus (which Japan has) produces more than it consumes. Not the other way around.
If you guys can't even get the basics right..
A Japan situation would seem like a boom, compared
to the US vantage point. so long suckas
Plot Japanese government debt as a percent of total government revenues. Overlap this chart with the graph of the savings rate in Japan. Just for fun plot a graph of the average age of the Japanese population, and for further amusement plot the total population.
All of that will lead to the following conclusion:
Funding JGB's domestically has had its day.
Two solutions: entice foreign money to fund the deficit, or sell foreign assets (including UST's). If Japan attempts to entice foreigners, at what rate? If JGB's came to yield the same as US 10-years do right now, fully 100% of all Japanese government revenues would be consumed by debt service.
If Japan funds by selling foreign assets, what happens to the yen (and exports) as dollars, pounds, euros, etc. are sold and exchanged for yen?
2011 looks to be Japan's "day" of reckoning.
Well, I do expect the JPY to rally, but it doesn't mean that Japan will die. Remember, liquidity creates the demand. In the case of Japan, for the last 20years of QE, all the money flowed out. And yes, new debt will have to be financed but guess what, although individual savings rates are down, corporate savings rates are still high. Japan can buy more time, but you are right in that eventually it will collapse without an adjustment in the total debt level. Read what I wrote in my blog. Japanese exports may not decline as much if what they are exporting is intermediate products. Look at the composition of japanese exports. China and Asia NIE dominate the numbers. This seems to imply a significant amount to intermediate good exports (to be assembled in China, Korea etc). The Japanese can continue to fund its deficits internally for now, and that might buy them enough time to turn the debt load and deflation around.
A large chunk of yen creditors also have yen liabilities, which in part explains why the debt situation looks like a perpetual motion machine.
Internal funding isn't so unsustainable because they get shafted on the one hand, but a nice break on the other hand.
2012 looks to be Japan's "day" of reckoning.
2013 looks to be Japan's "day" of reckoning.
2014 looks to be Japan's "day" of reckoning.
And so on...
Japan has nested its debt in the US debt. The only collapse they will know will be around US' collapse.
I notice you write through the haze of a deep inferiority complex, though I don't know why.
Regarding Japan, I have been monitoring their national savings rate since the late 1980's when by some measures it topped 20%. It has now turned negative. That is what is different now. Can they shuffle through another year? Of course. Given that neither the dollar nor euro has collapsed in the face of money printing to monitize debt, Japan can try the same thing now that they have exhausted their domestic savings. Might buy them some time. Still, they are on the path every power has taken since time began. They're on it, the US is, Europe is, China is. It ends badly for everyone. That is the nature of things.
Not perpetual motion, just a bubble in the Japanese Government bond market.
.
many perpetual motion machines to choose from:
http://www.free-energy-info.co.uk/
http://www.rexresearch.com/1index.htm