This page has been archived and commenting is disabled.

Japan Now Spends 43% Of Tax Revenue To Fund Interest On Debt

Tyler Durden's picture




 

Submitted by Simon Black via Sovereign Man blog,

It’s entirely possible that we may see interstellar space travel in our lifetime. And what a dream that would be.

But in the meantime, for anyone that’s losing patience with space technology, I would recommend you visit Japan. Because for anybody that has been here, this place is as close as it gets to being on another planet.

Japan is a land of irony and dichotomy. It is one of the most conservative cultures in the world, while simultaneously being one of the most perverted.

Business culture here is yet another thing that seems totally alien. Creativity and innovation are constrained by process and procedure. The individual is never celebrated, and dutiful compliance is everything.

In Japanese corporate culture, business meetings follow a strict agenda. New ideas, no matter how valuable, are simply not welcome.

They actually have a term here called nemawashi, which is a meeting before a meeting. The idea being that if you have an idea to present at a meeting, you need to discuss it first so that nobody’s caught off guard or embarrassed by not having a prepared response.

This is a cultural nuance that is completely lost on most Westerners. It stems from this mindset that everyone has an obligation to make sure that nobody else looks bad.

This carries over especially into Japan’s economic and financial situation. As a percentage of GDP the government here is carrying more debt than anyone else on the planet.

At one quadrillion yen, the debt level is so high that it now takes the government 43% of its central tax revenue just to pay interest this year.

The percentage of tax revenue to service the debt has been rising for years and is absurdly unsustainable. Yet large Japanese businesses have dutifully continued to hold Japanese government bonds as part of their obligation to make sure that the government doesn’t look bad.

It’s like a financial nemawashi, saving their counterparty from embarrassment.

This, however, is starting to change. Through its policy of aggressively seeking to create inflation, the government is now guaranteeing that anyone who holds Japanese government bonds will lose money.

This makes government bonds no longer an investment or a store of value, but a charity case. At best it’s just another tax.

Throughout history governments have often overestimated how much their citizens are willing to accept.

Japan has a beautiful stoic culture that has been able to endure tremendous suffering. That said, everyone has a breaking point.

And that’s when you see that there’s a big difference between love of country and love of government.

Bottom line - it’s already starting to unravel.

Every time I’m in Singapore now, as I was just last week, my banking contacts report exponential growth in Japanese customers. Businesses, entrepreneurs, and investors are all moving money out of Japan and into Singapore.

Even Japanese banks are aggressively expanding, following the money out of their own country.

This is precisely when capital controls end up being imposed—when a trickle of capital fleeing turns into a flood.

We’re seeing the same things right now in many places around the world, with most of the attention now focused on Greece and other parts of southern Europe.

However, as Japan has the third largest economy in the world and is the most woefully indebted, it’s really the one to watch.

When the powder keg goes off that sets the global financial system ablaze, it will most likely be in Japan where the match is lit.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 03/05/2015 - 18:03 | 5859019 Greenspazm
Greenspazm's picture

That's what occurs when you abolish sex.

Thu, 03/05/2015 - 18:06 | 5859032 Greenskeeper_Carl
Greenskeeper_Carl's picture

don't worry, my fellow americans, we will catch them soon. USA! USA! WE'RE NUMBER 1.

And even with the BOJ monetizing all of their debt at record low yeilds, it STILL consumes that much of their debt. Just imagine if they had to pay something resembling historical norms. And yet, they are still able to buy things with their currency, simply amazing. You would think the rest of the world would see this and avoid it at all costs, but nope, we are heading for it, full speed ahead

Thu, 03/05/2015 - 18:10 | 5859044 Publicus
Publicus's picture

Time to stop pretending and just print money to pay off those debt. As a bonus it'll stop these BS articles from being written.

Thu, 03/05/2015 - 18:14 | 5859056 negative rates
negative rates's picture

Nobody lives to suffer more, than the Japanese.

Thu, 03/05/2015 - 18:17 | 5859068 J S Bach
J S Bach's picture

Usury at its finest.

Thu, 03/05/2015 - 18:23 | 5859084 ml8ml8
ml8ml8's picture

Kind of expected to see a few charts and/or other sources in here.  I thought interest expense was lower than 43% of gov't revenue.  I do agree that Japan is the one to watch--Greece is just a red herring.

Thu, 03/05/2015 - 18:29 | 5859106 kaiserhoff
kaiserhoff's picture

Last figures I saw indicated 80% of Japanese debt is still publicly held.  That is not widely understood, because the JGB is buying 100% of the new stuff.

Soooooo,  when that 80 percent gets nervous, things will change fast.  One of Simon's better efforts.

Thu, 03/05/2015 - 18:33 | 5859120 knukles
knukles's picture

See see see see..  I todja.  This is why negative interest rates is getting so popular.
                  rolling eyes

Thu, 03/05/2015 - 18:44 | 5859153 NoDebt
NoDebt's picture

So if the BOJ owns XX% of that debt (JGBs), does that xx% of the 43% get recycled right back to the government?  In the US it does- gets handed back to the US Treasury.

Thu, 03/05/2015 - 18:47 | 5859163 kaiserhoff
kaiserhoff's picture

Seems likely.

Makes it even worser, does it not?

Thu, 03/05/2015 - 18:49 | 5859172 Diet Coke and F...
Diet Coke and Floozies's picture

All I'm hearing is long USD/JPY...

Thu, 03/05/2015 - 19:00 | 5859213 Eirik Magnus Larssen
Eirik Magnus Larssen's picture

Little simplistic.

Thu, 03/05/2015 - 19:39 | 5859348 cnmcdee
cnmcdee's picture

Whats the problem!!

QE(Europe) will pay 3% to borrow!!  So the Bank of Japan can just use the entire country for a collateral loan and can just borrw a quadrillion yen from the EU and make like $3 Trillion yen a year in interest!

 

Thu, 03/05/2015 - 20:40 | 5859510 max2205
max2205's picture

So.  If the rates on the five year go from 0.005 to 0.01 , Japan blows up?

 

Film at eleven 

Thu, 03/05/2015 - 18:51 | 5859180 ml8ml8
ml8ml8's picture

Exactly. If all of that "net debt" doesn't matter, than why doesn't the BoJ just do the government a favor and cancel all of the debt held by the BoJ?

Thu, 03/05/2015 - 19:01 | 5859203 NoDebt
NoDebt's picture

That's my point.  IN THEORY they could and it wouldn't make ANY difference in the real world.  But for the BOJ it would be an immediate vaporizing of all their capital.  Now, the whole idea of "capital" for a central bank is sort of ridiculous- they could recapitalize via the printing press or simply declare that the normal rules of insolvency don't apply to them.  

In any case, it would be the last step in truly, outright monetizing the debt.

Makes my head hurt thinking about it.  I guess if it ain't broke (pun intended), fix it until it is.

 

Thu, 03/05/2015 - 19:32 | 5859318 i_call_you_my_base
i_call_you_my_base's picture

Hence the trillion dollar coin.

Thu, 03/05/2015 - 21:11 | 5859590 LibertarianMenace
LibertarianMenace's picture

And Krugy's Nobel.

Fri, 03/06/2015 - 20:26 | 5863359 Tombrownssoul
Tombrownssoul's picture

No it doesn't. The Bank Of japan is a private corporation with its shares qouted on the Tokyo Stock Exchange!!

Thu, 03/05/2015 - 18:49 | 5859173 kaiserhoff
kaiserhoff's picture

Don't know if you deal with this knuks,

but have you seen any decline in new issuance of Munis?  Looks like something might start to sort out here in the bond world.

Thu, 03/05/2015 - 20:35 | 5859491 knukles
knukles's picture

Hi Kaiser,
There are any number of sources available for muni issuance, but looking for "historical muni issuance" this blurb from Invesco has a chart that does the job.  Peak issuance was several years ago when tax revenues declined and budgets needed to be cut.  Since then, lots of refinancing, calls, etc., taking advantage of lower nominal yields.  Also, some states rates continue to fall in anticipation of higher tax rates.  
So, off the peaks, and consensus for this year is no big increase.  Budgets have already been cut and not a lot of massive expenditures anticipated aside form a few of the lunatic asylums like Hi Speed rail in Ca.  So I'm OK with the consensus expectation that net issuance will probably remain flat to down.

http://www.invesco.com/pdf/MUNIMKT-INSI-1.pdf

More importantly, if anybody expects taxes to go up (probably a good guess, no?) then muni's should outperform other debt due to after tax effect.  Conversely, if (as consensus expectations here at the Hedge) one expects very tough economic times, munis will not perform as a safe haven like treasuries.  To wit, go to like Yahoo or Google finance and go back to 2005 to present and look at prices of say, TLT (Barclays 20+ yr treasury) versus PWZ (Ca long term state bonds).  CA will serve as a proxy for munis in general in this case.  As it appeared the world was coming to an end, munis got hammered opposite the flight to quality in Treasuries.  So, 2 countervailing forces potentially at work.  I personally am a big believer in lower rates (as you know I have been for years) for the deflation/QEmistake/Liquidity Trap reasons, etc.  Treasuries could run away if the world turns soft, munis then could be a great buy.  But, is what it is....

My own longer term view of the world is that the Bigger Risk right now is that one looks back in several years and rates are all substantially lower then they are today.  Meaning that there will be no income opportunities left.... just higher risk alternatives... just like they been trying to get one to do.  I sure don't want to be the one holding the high risk asset bag if things go soft, so I'll just take the income and buy it now.
But that's just my own personal preference.  Nothing right or wrong about it.  Opposite that, the real assets/PMs etc. serve as the safety barbell against the income stream.  (Gallic shrugs)

Thu, 03/05/2015 - 18:44 | 5859154 The Navigator
The Navigator's picture

It may be that the '80% held by the public' is due to Japanese having a lot their money in the 'Postal savings' system, which then in turn buys the JGB.

Thu, 03/05/2015 - 18:50 | 5859178 kaiserhoff
kaiserhoff's picture

Plenty of corporate according to the article, but yes, that Postal thang is a unique beast.

Thu, 03/05/2015 - 20:00 | 5859401 The Navigator
The Navigator's picture

Unique BIG beast

From an August 2002 article in The Economist

"With ¥240 trillion ($2 trillion) of deposits and another ¥125 trillion in insurance policies"

http://www.economist.com/node/1276633

 

Either way, it's gonna be a hard nut for the Japanese.

Thu, 03/05/2015 - 23:27 | 5860010 Crash Overide
Crash Overide's picture

"Japan Now Spends 43% Of Tax Revenue To Fund Interest On Debt"

 

Central bank translation: WINNING!

Thu, 03/05/2015 - 18:38 | 5859135 Midas
Midas's picture

I have been telling people that nobody can endure suffering like the Russians can.

Thu, 03/05/2015 - 18:35 | 5859126 mrdenis
mrdenis's picture

New Jersey's already caught up to them .....

Thu, 03/05/2015 - 18:07 | 5859036 SafelyGraze
SafelyGraze's picture

"Japan Now Spends 43% Of Tax Revenue To Fund Interest On Debt"

and one day it will be 100%

from everybody

everywhere

nyah ha ha ha ha ha ha ha

hugs,
the dark sith lords or lending 

Thu, 03/05/2015 - 18:22 | 5859082 Mentaliusanything
Mentaliusanything's picture

It would be a good question to ask Janet Yellen ..." How would Japan pay its Interest on Debt if prime interest rates doubled to 2.6 % from its current 1.3% and how would they fund the running of the country out of the balance left over"

Thu, 03/05/2015 - 18:30 | 5859110 kaiserhoff
kaiserhoff's picture

and why is she stealing ALL of our interest income?

Thu, 03/05/2015 - 19:19 | 5859278 game theory
game theory's picture

Yellen isn't "stealing" interest; blame China. When we get QE4 and the 30 year goes even lower, we still won't know how fraudulent China's numbers are...but it will be a useful clue.

Thu, 03/05/2015 - 19:19 | 5859279 game theory
game theory's picture

dupe

Thu, 03/05/2015 - 18:42 | 5859149 Doubleguns
Doubleguns's picture

Rates may not go up. They can go negative and charge the folks interest for keeping their bond money safe. It would be a cash cow. 

Thu, 03/05/2015 - 19:20 | 5859281 Mentaliusanything
Mentaliusanything's picture

Until the cow was taken out of the Paddock - No Bull, you no pay, we no deposit. Then you have Huge problems as Banks gearing goes Ballistic

Thu, 03/05/2015 - 18:35 | 5859125 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Yes, the BOJ will print more toilet paper to wipe their sorry indebted asses. Print on CBs!

Thu, 03/05/2015 - 18:22 | 5859080 venturen
venturen's picture

just delcare NIRP...problem solved...well till it isn't

Thu, 03/05/2015 - 18:48 | 5859165 GoldSilverBitcoinBug
GoldSilverBitcoinBug's picture

That's what occurs when you abolish sex.

Which happen when you promote feminism and women liberation...

Conservative culture have strong family values and strong fertility rate even if the country is rich and developed.

Saying that japan is conservative is not totally true: liberal and western ideologies are present too.

Japan will collapse, case closed.

 

Thu, 03/05/2015 - 19:25 | 5859298 ShrNfr
ShrNfr's picture

They will get fucked anyway, just in a different orifice.

Thu, 03/05/2015 - 20:45 | 5859519 doctor10
doctor10's picture

Just because its not Tony Brokenosa collectin' 42% with a baseball bat doesn't mean ist not loansharkin'

 

just sayin'

Thu, 03/05/2015 - 21:16 | 5859603 rubiconsolutions
rubiconsolutions's picture

"Calling Dr Krugman, Dr. Paul Krugman. Please report to the BOJ stat!"

Thu, 03/05/2015 - 18:04 | 5859022 Jstanley011
Jstanley011's picture

Oh yeah, that's sustainable...

Thu, 03/05/2015 - 18:04 | 5859023 Bastiat
Bastiat's picture

Fortunately they have tons of extra money to buy UST paper.

Thu, 03/05/2015 - 18:08 | 5859038 Greenspazm
Greenspazm's picture

In addition, the JCB will just print the money to pay the interest on the JGBs. Problem solved

Thu, 03/05/2015 - 18:08 | 5859040 Bunga Bunga
Bunga Bunga's picture

Calm down, as long as interest payment are smaller than GDP everything is fine.

Thu, 03/05/2015 - 21:22 | 5859628 StupidEarthlings
StupidEarthlings's picture

Sadly..this is true.

So where is this'starting to unravel' thing you speak of?... is there evidence?

I think  they can still keep this shit rollin for a while yet. (I think your forgetting how stupid people are) that said, there is no 'unraveling'..when it goes ..its gonna go quick.

Thu, 03/05/2015 - 18:09 | 5859043 RyeWhiskey
RyeWhiskey's picture

57% upside still available !

Thu, 03/05/2015 - 18:12 | 5859052 Youri Carma
Youri Carma's picture
While the Jap was sleeping, yeah, Lift Off! https://www.youtube.com/watch?v=ebMdV2AvDzk
Thu, 03/05/2015 - 18:14 | 5859057 new game
new game's picture

calling kyle, how are your bets looking? nice, congrats to many moar millions.

Thu, 03/05/2015 - 18:15 | 5859059 Batman11
Batman11's picture

Japan 1989 – Enormous property bubble bursts

Japanese hide bad debts on banks’ balance sheets and use QE and low interest rates to keep things going.

Result – stagnation.

 

US 2008 – Enormous property bubble bursts

US and Europe hide bad debts on banks’ balance sheets and use QE and low interest rates to keep things going.

Result – stagnation.

 

Where Japan leads the West has followed.

 

 

 

 

Thu, 03/05/2015 - 19:01 | 5859221 glenlloyd
glenlloyd's picture

Oddly enough back in 89 the US told the Japanese that they needed to purge the bad debt from the system, which the Japanese promptly ignored. Which begs the question of why on earth after the evidence of the Japanese stagnation (lost decade) would the US even consider (back in 2008) doing the same damn thing.

Insanity....

Thu, 03/05/2015 - 19:59 | 5859399 Al Tinfoil
Al Tinfoil's picture

BUT THIS TIME IS DIFFERENT!

There, fixed everything.

Thu, 03/05/2015 - 18:15 | 5859063 JustObserving
JustObserving's picture
Japan Now Spends 43% Of Tax Revenue To Fund Interest On Debt

Let's look at Japanese bond yields:

JGB 2 Year Yield -0.01%

5 Year Yield 0.08%

10 Year Yield 0.39%

30 Year Yield 1.45%

When these rates normalize, Japan will be paying 200% of tax revenue to fund interest on debt.

http://www.bloomberg.com/markets/rates-bonds/government-bonds/japan/

 

Thu, 03/05/2015 - 18:23 | 5859086 venturen
venturen's picture

Hence why there will never be normal....until the crooked bankers are vanquished. The USA is no different. 

Thu, 03/05/2015 - 18:23 | 5859091 Irishcyclist
Irishcyclist's picture

+100

bond rates are going to normalize at some point.

And central bank interest rates will also have to rise at some point too.

 

Thu, 03/05/2015 - 18:30 | 5859111 LawsofPhysics
LawsofPhysics's picture

No they won't the underlying currency will simply die...

Thu, 03/05/2015 - 20:42 | 5859456 layman_please
layman_please's picture

NIRP/ZIRP/LIRP is the life support of this almost clinically dead economy. It's similar to cardiopulmonary bypass where functions of hearth and lungs are artificially replaced by a pump (central banks). It's even worse, the pump (central bank) has to also inject new blood (currency), not just circulate it, because the body (economy) is bleeding out. Or to be fair, the pump itself is leaking, while also the oxygenator is not saturating the blood with oxygen and it's becoming more and more toxic. FYI, cardiopulmonary bypass is nothing but a temporary solution.

Fri, 03/06/2015 - 00:27 | 5860199 JLee2027
JLee2027's picture

The entire financial system as we know it today needs to be destroyed and rebuilt.

Thu, 03/05/2015 - 18:15 | 5859064 whatthecurtains
whatthecurtains's picture

But Krugman says debt means nothing.  

Thu, 03/05/2015 - 18:26 | 5859099 Mentaliusanything
Mentaliusanything's picture

No He Doesn't....... He say we (the USA) owe it to ourselves so its all beer and skittles or shits and giggles or something insane like that.

Noble prize winner my ass and another name for an ass is a Donkey

Thu, 03/05/2015 - 18:55 | 5859196 Gambit
Gambit's picture

Fuck Krugman and the horse shit he rode in on. 

Fri, 03/06/2015 - 00:09 | 5860149 DaveyJones
DaveyJones's picture

I guess it takes a nothing to call a nothing

Thu, 03/05/2015 - 18:16 | 5859066 sTls7
sTls7's picture

Looks like we're traveling down the same sewer of sorrow, thanks to the Feds.

Thu, 03/05/2015 - 18:17 | 5859069 Watson
Watson's picture

Didn't the Japanese say 'we fight until we eat stones'?

There is, of course, a limit, even for the Japanese.
But they hesitated to surrender even _after_ Hiroshima and Nagasaki, which suggests they are _nowhere near_ that limit yet.

Watson

Thu, 03/05/2015 - 18:20 | 5859076 wendigo
wendigo's picture

I'm a simple man, with simple understanding. I know politicians like to spend nonexistent money to buy votes. I know they've been shocking their economy for decades.

What I can't understand is: didn't they have any idea what they were doing? Surely they knew one day reality would reassert itself? Or did they think that the universe had no internal workings of its own?

Fri, 03/06/2015 - 06:07 | 5860547 turnoffthewater
turnoffthewater's picture

Politicians only care about the next election and their ego.

It's a job and they will work the highest bidder (think banks)

Thu, 03/05/2015 - 18:21 | 5859078 wendigo
wendigo's picture

I'm a simple man, with simple understanding. I know politicians like to spend nonexistent money to buy votes. I know they've been shocking their economy for decades.

What I can't understand is: didn't they have any idea what they were doing? Surely they knew one day reality would reassert itself? Or did they think that the universe had no internal workings of its own?

Thu, 03/05/2015 - 18:22 | 5859083 davidalan1
davidalan1's picture

"Squeeze my lemon, till the juice run down my leg"- Lemon song,  Led Zep-  apropou? yes or no?

Thu, 03/05/2015 - 18:23 | 5859090 Bemused Observer
Bemused Observer's picture

"They actually have a term here called nemawashi, which is a meeting before a meeting. The idea being that if you have an idea to present at a meeting, you need to discuss it first so that nobody’s caught off guard or embarrassed by not having a prepared response."

Well, wouldn't you be catching them off guard at that first meeting then? Should you schedule something in advance to discuss this so you don't put them on the spot? A little meeting or something?

DOH! The meetings go back to INFINITY! You're always off-guard, never completely sure you've scheduled the proper number of pre-notification meetings or not...damn these inscrutable Japanese and their strange business etiquette!

Thu, 03/05/2015 - 18:24 | 5859092 Steverino
Steverino's picture

somewhere Kyle Bass is going "toldja"...

Thu, 03/05/2015 - 18:24 | 5859095 bnbdnb
bnbdnb's picture

The Japanese are owed a lot. We really should give them credit for our way of life, because without them, we never would have known how big of a bully we could be.

 

Thu, 03/05/2015 - 18:24 | 5859096 Fun Facts
Fun Facts's picture

People used to think negative interest rates, or even debt monetization would never happen.

Now as time passes, watch the CB's all end up having to print money just to pay the interest on the debt.

They're already monetizing more than they're issuing when viewed in sum total.

Thu, 03/05/2015 - 18:25 | 5859098 flyonmywall
flyonmywall's picture

Most people live for the here and now, with no thought of the future. Politicians only want to line their pockets now, thinking it will protect them in the future.

It's very simple. And, it will lead to the doom of the human species. Count on it.

 

Thu, 03/05/2015 - 19:10 | 5859251 darteaus
darteaus's picture

It's free! Just swipe your EBT!

https://m.youtube.com/watch?v=xLTTX35LNJo

Thu, 03/05/2015 - 18:32 | 5859115 Mr. Bones
Mr. Bones's picture

Then I say the earth belongs to each of these generations during it's course, fully, and in their own right. The 2d. generation receives it clear of the debts and incumbrances of the 1st., the 3d. of the 2d. and so on. For if the 1st. could charge it with a debt, then the earth would belong to the dead and not the living generation. Then no generation can contract debts greater than may be paid during the course of it's own existence.

-Jefferson, 1789

 

He also had a quote about generational debt causing wars, but we'll have to wait 'till another day before that one becomes immediately relevant...

Thu, 03/05/2015 - 19:35 | 5859331 mc225
mc225's picture

--course of it's own existence--

it is doubtful that jefferson had an apostrophe on a possessive its.

Thu, 03/05/2015 - 18:37 | 5859119 katchum
katchum's picture

Actually it's only 20%:

10 trillion yen interest at 50 trillion yen tax revenues.

http://seekingalpha.com/article/2820706-ministry-of-finance-japan-approv...

Of course, it depends on the interest rates... which are skyrocketing now.

Thu, 03/05/2015 - 18:41 | 5859142 BrosephStiglitz
BrosephStiglitz's picture

I'm also of the opinion that Japan will be the first domino to topple.  I have a bet placed to that respect (payment terms in silver bullion, of course*.)  We'll see.  I am terrible at market timing.

This year is shaping up to be an interesting one indeed. 

*could not anticipate exchange rate risk, thus opted for payment in something outside the fiat game. 

Fri, 03/06/2015 - 00:38 | 5860220 JLee2027
JLee2027's picture

Japan, the Euro, South America (Venezuela, Argentina). So many choices...the United States will be the last.

 

I'm also of the opinion that Japan will be the first domino to topple.

Thu, 03/05/2015 - 18:45 | 5859158 kiwimail
kiwimail's picture

And the Yen is considered a "safe haven" currency?  WTF!!!

Thu, 03/05/2015 - 18:48 | 5859168 papaswamp
papaswamp's picture

NIRP it!

Thu, 03/05/2015 - 18:49 | 5859174 LawsofPhysics
LawsofPhysics's picture

Yes, pay me to take out a billion dollar loan.

Thu, 03/05/2015 - 19:23 | 5859289 Soul Glow
Soul Glow's picture

Roll 'em up, move 'em out!

Thu, 03/05/2015 - 19:59 | 5859397 Unix
Unix's picture

...rawhide!

Thu, 03/05/2015 - 18:51 | 5859181 GoldSilverBitcoinBug
GoldSilverBitcoinBug's picture

I don't want to imagine if the interest rate was going slightly up.

At 100 % tax revenue it's game over...

BANZAI emperor of debt !

Thu, 03/05/2015 - 18:57 | 5859194 Kirk2NCC1701
Kirk2NCC1701's picture

This is just like Monopoly: Some players have just the right amount of skill plus luck to get ahead.

Other players learn to make game allies and 'negotiate deals' in a seemingly innocuous way, but which really favors the deal makers. This forces the others into eventually making similar alliances and deals.

Those with alliances last longer than individual players. Lone players get marginalized and fall into the inevitable downward spiral of money and asset losses, and game elimination. Only the strongest alliance remains in this game of financial Darwinism.

The kicker is, when the Game is over and the winners and losers are recorded, the money and assets are taken by the Bank, the cards are shuffled, and the Game begins all over again. Unlike the board game version though, in real life there is always a new crop or generation of players to restart the Game. But the Banker remains the same, no matter whose face is used as the Front.

Plan and play accordingly.

Thu, 03/05/2015 - 19:58 | 5859392 Unix
Unix's picture

Crap, I do the lone wolfe and wipe the board by buying everything and charging high rents LOL...I usually win, BTW you can have the fucking utilities! loaded dice helps too...heh.

Thu, 03/05/2015 - 20:19 | 5859461 MollyHacker
MollyHacker's picture

That and when somebody decides to change the game to a game of RISK.

Thu, 03/05/2015 - 20:55 | 5859541 Unix
Unix's picture

...or Axis and Allies...best board game EVER!

Thu, 03/05/2015 - 19:05 | 5859232 Bemused Observer
Bemused Observer's picture

Well, what is life like in Japan?

I always hear about the sclerotic business environment, but I never hear much about what every day life is LIKE for these folks. I never hear about any unrest, or of scores of angry Japanese all over Twitter. I'm not aware of any shortage issues, and if their currency is not worth shit, as long as it's working for them in Japan it's doing its job...
The population is older...they don't consume as much and don't throw their money around. So Japan doesn't have to 'attract business investment' and doesn't need to be revving up its economy and "competing globally", despite the demands of its elite and investor classes.

Maybe the best course for Japan is to adjust downwards and accept a slower paced economy. A "good life" doesn't depend on acquisition...most people acquire stuff to enjoy it, and once they have enough they want to kick back and do that, not keep acquiring more and more.

Thu, 03/05/2015 - 20:06 | 5859427 Al Tinfoil
Al Tinfoil's picture

They're all starting to glow in the dark.

Fri, 03/06/2015 - 03:49 | 5860452 kareninca
kareninca's picture

If you sincerely want to know, google "rice ball man Japan starvation."

Oh, here it is, I did it for you:  http://www.nytimes.com/2007/10/12/world/asia/12japan.html?hp=&_r=0

Thu, 03/05/2015 - 19:05 | 5859233 darteaus
darteaus's picture

Good thing they have ZIRP!

They may want to move up their hire of that former Zimbabwe Central Banking Chairman.

Thu, 03/05/2015 - 19:09 | 5859249 Unix
Unix's picture

In no time at all, it will be 100%, and EVERY country will be doing it soon enough...BANK on it. CB's are in collusion, to keep the ships afloat, it won't last much longer!

Thu, 03/05/2015 - 19:32 | 5859317 Coletrane
Coletrane's picture

been hearing that since the 80s lol i would've thought it'd have come to a head already......

 

 

 

when you hold all the cards, you can deal yourself whichever hand you wish, and you can fuck over whomever you wish. Great racket if you';re the dealer

Thu, 03/05/2015 - 19:56 | 5859387 Unix
Unix's picture

true, but the difference today is the sea of ponzi floating around waiting to burn! along with all the other geopolitical BS and idiots in charge!

Thu, 03/05/2015 - 19:22 | 5859287 Soul Glow
Soul Glow's picture

bullish

Thu, 03/05/2015 - 19:29 | 5859307 Coletrane
Coletrane's picture

whip that horse some more.....you can get a few more miles out of him before he keels over

Thu, 03/05/2015 - 19:35 | 5859328 mastersnark
mastersnark's picture

Mishima Yukio now, more than ever.

Thu, 03/05/2015 - 19:39 | 5859341 mc225
mc225's picture

how about some yousei teikoku: https://www.youtube.com/watch?v=xr80D3MOX64

Thu, 03/05/2015 - 19:47 | 5859349 Nue
Nue's picture

This moment in Japanese anime sums up Japanese economic policy.

Warning! Disturbing and not for the faint of heart

https://www.youtube.com/watch?v=mEM_PgxRRAg

 

*Just think of the Girl with Green hair has China.

 

Thu, 03/05/2015 - 19:55 | 5859383 WTFUD
WTFUD's picture

There's no one quite like the Japanese for burying their heads in the sand although they call it saving face.

Thu, 03/05/2015 - 20:28 | 5859482 Niall Of The Ni...
Niall Of The Nine Hostages's picture

Japan not only is a nation of conformists that were genuinely willing to commit mass suicide in 1945, but it's in Japan that the New Socialist Man is being built that the banksters plan as replacements for the human race. If a robot able to do anything a human can and do it better is ever realized---allowing its masters to order it to kill off the rest of humanity, the proles having outlived their usefulness even as slaves---it'll be built in Japan. 

It's a bit frightening how the Japanese not only seem okay with their own extinction but positively eager to hurry it along. 

That makes them especially useful to the PTB; so Japan will be kept on life support a bit longer. They'll pull the plug on the Fourth Reich much sooner than Japan. Lord knows Japan hasn't been crazy enough to have another go at conquering China.

Thu, 03/05/2015 - 20:33 | 5859487 directaction
directaction's picture

With a small jump in interest rates the 43% of tax revenue allocated to servicing the debt will exceed 100%.  

Thu, 03/05/2015 - 21:10 | 5859587 Free Wary
Free Wary's picture

no problem at that time the central bank can harmlessly shred the bonds, duh.

Thu, 03/05/2015 - 21:39 | 5859691 toros
toros's picture

"At one quadrillion yen, the debt level is so high that it now takes the government 43% of its central tax revenue just to pay interest this year"

USA interest paid on debt:
2014 $430,812,121,372.05

http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm

2013 debt outstanding
09/30/2013 16,738,183,526,697.32

2014 debt outstanding
09/30/2014 $17,824,071,380,733.82

debt increase of $ 1,085,887,854,036

39% = interest/debt increase

http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.htm

Thu, 03/05/2015 - 21:47 | 5859711 BeerMe
BeerMe's picture

Here is a brain tease:

Are they the third largest economy because of debt?  And without debt is their economy actually less?

 

On a side note, I finally got the last of the credit card debt paid.  Next up maybe some extra savings plus getting some bank loans finished faster.  Kind of freeing knowing I'll at least have a little extra every month.  Of course thinking about it more, it probably winds up paying taxes.  Fuck!

Thu, 03/05/2015 - 22:58 | 5859930 juggalo1
juggalo1's picture

I don't see the problem here.  Japan's debt is domestically financed and denominated in their own currency.  Japan doesn't depend on foreign investment or run an unfavorable trade balance.  In these conditions it seems impossible to have a debt crisis, and from a macro view, the debt is pretty irrelevant.  After from the perspective of the Japanese nation as a whole the debt and assets, interest and interest payments are coming from one hand and going to the other.

Thu, 03/05/2015 - 22:59 | 5859933 falconflight
falconflight's picture

And yet Japan's ruling class with the full support of its uber conformist body politic has proven that 'levitation' is real and not just a David Copperfield sleight of hand.  20 years and counting.  That's a long time in a human's life.

Fri, 03/06/2015 - 00:00 | 5860106 roddy6667
roddy6667's picture

What percent of tax revenues does America spend servicing debt?

Fri, 03/06/2015 - 03:51 | 5860455 contrarianstrai...
contrarianstraighttalker's picture

I was in Japan 4 months ago. Beautiful country, but sadly broke. Wrote a blog last month on this topic, hope it adds value

https://contrarianstraighttalker.wordpress.com/2015/01/22/japan-default-looming/

Do NOT follow this link or you will be banned from the site!