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Japan Will Raise More Cash From Debt Issuance Than Taxes For Fourth Year In A Row

Tyler Durden's picture


While the world is watching Europe and the US for signs of imminent decoupling, and now has added China to its insolvency focus list, things in Japan, which is "fine" courtesy of a self-destruct autopilot, are just getting plain ridiculous. As we reported earlier this year, Japan's marketable public debt, already the largest in the world at $11.2 trillion compared to America's $10 trillion (of course this assumes the whole SSN sleight of hand is funded, which it isn't), is due to surpass ¥1 quadrillion any month now (aka the exponential phase). And that's just the beginning. As Bloomberg reports, "Bond sales to the market will climb to a record 149.7 trillion yen ($1.9 trillion), while the national budget’s reliance on debt for funding will rise to an unprecedented 49 percent in the year starting April 1, Japan’s government said Dec. 24. The government said it plans to sell 44.2 trillion yen of new bonds to fund 90.3 trillion yen of spending in next fiscal year’s budget. It estimates that tax revenue will total 42.3 trillion yen in fiscal 2012, meaning that new bond sales will exceed tax revenue for a fourth year." In other words, in a world increasingly disconnected form any sort of reality, very soon no taxes at all will be needed: after all each and every government (or uber-union in teh EU's case, once the imploding Eurozone turns to the final Deus Ex - a fiscal protectorate issuing joining Eurobonds) will simply fund all its cash needs by printing its own money. Naturally, anyone daring to suggest that this is beyond idiotic will be given an MMT 101 manual and/or incarcerated for grand treason. And any last voices of sanity will be promptly muted: "I think the reliance on bonds to compile budgets is reaching its limit,” Japanese Finance Minister Jun Azumi said Dec. 24, after the announcement of the budget plan.

Oh please, as if there is any alternative. Because Japan, just like the US, relies on the Primary Dealer grand repo Ponzi (anyone who still hasn't read the following presentation from Citi which explains the grand shadow ponzi in exquisite detail, without any academic BS, is strongly urged to do so immediately) scheme to keep the lie afloat: "There is no sign that Japan’s outstanding debt will be reduced,” said Shinji Nomura, chief debt strategist in Tokyo at SMBC Nikko Securities Inc., one of the 25 primary dealers obliged to bid at government-debt sales. “Japan’s lawmakers aren’t serious enough. Europe’s debt crisis isn’t a fire on the other side of the river." End result: near record low interest rates: "Japan’s benchmark bond yield is set to end the year below 1 percent, the second-lowest among developed bond markets, as the nation’s current-account surplus makes it a haven from Europe’s financial crisis."

So somehow a "current account" surplus makes unprecedented ponziness ok. But yes, Shinji is absolutely right: neither Japan's, nor anyone else's public debt will ever be reduced as at this point the best holders can hope for is the debt to keep rolling, albeit at ever lower rates due to the exponential rise in gross notional, where even the smallest uptick in interest rates will bring the whole house of cards tumbling down.

In other news, and to all the neo-Keynesians out there, we post the following thought experiment: according to the head priest economic growth derives from debt issuance. And since apparently every country (yes, yes, that has its own currency) can issue infinite amounts of debt, why doesn't the US and Japan (and the EU post Eurobonds), simply announce it will monetize, aka print, an infinite amount of debt tomorrow? Shouldn't that lead to global GDP promptly rising by infinity %? Or is there an actual problem with this hypothetical scenario which takes current debt trends to their ludicrous extreme.

As for Japan, more from Bloomberg:

The cost of insuring Japan’s bonds against default climbed to the highest in 2 1/2 months last week. Five-year credit- default swaps tied to government bonds rose to 143 basis points on Dec. 20, the highest level since Oct. 5, according to CMA prices. The swaps were 142 basis points on Dec. 22. CMA is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market.


Total debt issuance, including securities to replace maturing debt and so-called zaito bonds sold for government agencies, will increase by 4.6 trillion yen to a record 174.2 trillion yen, the Ministry of Finance said Dec. 24.


Japan’s benchmark 10-year bond yield was unchanged at 0.97 percent on Dec. 22 as a 0.8 percent drop in the Nikkei 225 Stock Average supported demand for debt.


The Ministry of Finance said it will expand each monthly auction of debt maturing in 10 and 20 years by 100 billion yen in 2012 from the original plan for this year. The government in November increased sales of two- and five-year debt by 100 billion yen at each auction after Prime Minister Yoshihiko Noda approved a 12.1 trillion yen third extra budget to fund earthquake rebuilding


“The government is increasing issuance of long-term and super-long-term bonds because it wants to borrow for a long period while interest rates are still low,” said Naomi Hasegawa, senior fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo.


The nation’s economic expansion will probably slow after annualized 5.6 percent growth in the three months ended September fueled by demand related to the March 11 earthquake.


The median estimate of 11 economists surveyed by Bloomberg News is for growth of 0.42 percent this quarter. Of the 10 polled this month, five predicted GDP will shrink.

Still, maybe some are finally awaking to the insanity...

Japanese rating company R&I, in cutting the nation’s rating to AA+ from AAA on Dec. 21, said prospects for an economic rebound are “uncertain” and that its debt “would inevitably rise for an extensive period of time.”


The outstanding debt of the world’s third largest economy was 954.4 trillion yen at the end of September. It’s projected to reach 219 percent of gross domestic product next year, the most among the member nations of the Organization for Economic Cooperation and Development, according to the OECD.


“The fact that the domestic rating agency had to make such a decision will likely make not only money managers but also Japan’s public seriously doubt if the nation’s finances are really okay,” said Akane Enatsu, a senior credit analyst at Barclays Capital in Tokyo.

Unfortunately, we doubt it. After all it is not only Europe (thank you SWIFT), but the entire world that has now crossed the Rubicon of the Bizarre, where the mere contemplation of the fact that the world's head economic shamans have been wrong from day one is grounds for immediate systemic collapse. We reckon we have a few months before even the mere speculation that the system is headed for outright disaster become a punishable felony offense, roughly at the same time the soon to be enacted SOPA makes sure any dissent is dealt with cleanly and efficiently.


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Mon, 12/26/2011 - 10:51 | 2011685 Fips_OnTheSpot
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Look, all that deflation and deleveraging over the "developed" world. </sarc>

Mon, 12/26/2011 - 11:28 | 2011732 Chris Jusset
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Japanese Finance Minister Jun Azumi said:

"I think the reliance on bonds to compile budgets is reaching its limit.


D'ya think?

Mon, 12/26/2011 - 12:01 | 2011767 WestVillageIdiot
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He forgot to add on the part about, "but we have absolutely no intentions of changing what we are doing.  In fact we are exploring ways to collect even fewer taxes and create even more bonds.  Heh, we are the government and that is what we do, bitchez."

Mon, 12/26/2011 - 12:49 | 2011832 sun tzu
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I don't think tax revenue is the problem as Japan has the highest corporate tax rates in the world and a 40% tax rate on the wealthy 

Mon, 12/26/2011 - 12:59 | 2011845 merizobeach
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Anybody know how to say 'quadrillion' in Japanese..?

Well, I couldn't wait, I had to look it up..

"Sen chou".  Literally, 'thousand trillion'.  Good luck with that, Japan.  Say, could I borrow a quick quadril, too?  Even at punitive interest rates, I don't mind.

Mon, 12/26/2011 - 22:07 | 2012540 New_Meat
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Mon, 12/26/2011 - 13:30 | 2011883 disabledvet
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unsustainable indeed then since how can they raise taxes to compensate? Both the short AND long answer is "Japan cannot do that." With the sudden emergence of a trade deficit in is "Japan the country" being financed? If you say "via China like everyone else save the USA" then i think you go to the head of the class.

Mon, 12/26/2011 - 13:58 | 2011937 midtowng
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And yet corporations and the wealthy aren't fleeing Japan. Funny that?

Mon, 12/26/2011 - 14:38 | 2011983 sun tzu
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They are fleeing from California. Nothing could be more rewarding than giving a huge chunk of your earnings to to the corrupt oligarchs so they can buy votes and spread the wealth to their cronies. It's amazing how people can be so stupid.

Mon, 12/26/2011 - 12:03 | 2011770 BandGap
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Thing is, when Finance Ministers start uttering these words they are in deep shit.  It takes a freakin' lot of crap to make them abandon the "all is well" line of bullshit.

more bad

Mon, 12/26/2011 - 12:46 | 2011826 MobBarley
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Interesting that your name is a scrambling of Jesus Christ with a mushroom cloud icon. Perhaps you think that Christianity is a 'Death Cult'

or some such. In fact, Christianity is a strong proponent of life.

Just thought you'd like to know.


Mon, 12/26/2011 - 15:10 | 2012044 Lost Wages
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Before the creation of the United States, the Catholic Church probably murdered the most people in the world. You can say, "That's the church, that's religion, that's not Christianity." Bullshit.  The Old Testament advocates loads of violence. The New Testament is practically a treatise on death anxiety and what happens to you after you die. All in all, the Bible advises us against self-defense, telling us to turn the other cheek and take a beating from life, unless someone bigger and more powerful tells us to do otherwise. Then it's OK to go to war and murder thousands of people in the name of god.

You choose selectively what you think Christianity is. You choose whichever facets of the ideology comfort you personally, based on your imagined mythological reality, then try to push that on everyone else. I'd love it if the world could keep their storybook characters and imaginary friends out of discussions about stark reality, but I also know that is too much to ask of most people.

What's even more confusing is how many anarcho-capitalist Libertarians worship Jesus, the most Communist, collectivist, egalitarian character to ever transcend meme to archetype. You can trust me when I say Ayn Rand had no love for Jesus. Obviously laizzez-faire capitalism needs temperance from social liberalism, or we'll just be returning to cave man days where we beat each other over the head with dollars instead of a wooden club and steal each other's shit. The argument between Capitalism and Communism is basically, "Who gets to fuck the poor worker in the ass harder? Government or Corporation?" My answer is neither. After all, what is the difference? An omnipotent power at the top of a hierarchy is always a tyrant. Fascism is always fascism, no matter what lipstick you put on its piggish face.

Destroy money. Destroy the economy. Alan Greenspan is the reincarnation of Jesus, creating infinte food out of a few loaves and fishes. Merry Xmas.

Mon, 12/26/2011 - 14:30 | 2011973 Caviar Emptor
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I theenk we need a beeger box....

Mon, 12/26/2011 - 15:30 | 2012064 Zero Govt
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in Economic Doctor parlance the patient is dead

Jap Govt RIP

Mon, 12/26/2011 - 10:53 | 2011688 GeneMarchbanks
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Since we're all engaged in this, let's just call it the "new norm" and move on...

Debt forgiveness or trade war that spirals into real war, choice is yours citizens....

Mon, 12/26/2011 - 11:18 | 2011721 Oh regional Indian
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Gene, odds on it seems war is the likely outcome.

Thing is, so much tension has been built into the Islamic world's fabric through actual, senseless carnage and in the white man's world through fear mongering and false-flags.

This much tension will release either through uniting behind a huge, planetary catastrophe (NWO wet-dream) or War.

Interesting that we get to participate in such momentous times. Awesome, eh?



Mon, 12/26/2011 - 11:35 | 2011740 GeneMarchbanks
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Take a peek at the discussions on these boards. Everyone is now an expert on places where they do not reside. They claim to 'know' with who the blame lies so-to-speak. "EUrope is done" "Japan is kaput" "China is popping". Meanwhile the matter is very simple, we've reached global debt saturation. No more. Minsky moment dead ahead. You want to hear the horrible truth of the matter? Each one of us is to blame. For generations no one has done the work of 'citizenship' in their own back yard, locally, state/district or federal. In these times, it's all too easy to take citizens attention off of the policy-makers and moneychangers who peddle the debt.

Yet, I (maybe naively) still believe that war is not a foregone conclusion.

Mon, 12/26/2011 - 11:40 | 2011746 Oh regional Indian
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Agreed Gene. We've all eaten at the trough so to speak.

But the war part... it's a simple matter of energy. Oppress a population enough, condition with daily doese of violence and cheap have a UK at your hands. Seething under a thin veneer of warm varnish.

One way or another, people seek scapegoats.

So, unless Gaia delivers a big swift kick or we go at each other once again for the Oily Garks.... some debt AND destruction ahead, no doubt. 

We all need to practice detachment...



Mon, 12/26/2011 - 11:51 | 2011759 GeneMarchbanks
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From The Coming Insurrection:

No social order can securely found itself on the principle that nothing is true. Yet it must be made secure. Applying the concept of “security” to everything these days is the expression of a project to securely fasten onto places, behaviors, and even people themselves, an ideal order to which they are no longer ready to submit. Saying “nothing is true” says nothing about the world but everything about the Western concept of truth. For the West, truth is not an attribute of beings or things, but of their representation. A representation that conforms to experience is held to be true. Science is, in the last analysis, this empire of universal verification. Since all human behavior, from the most ordinary to the most learned, is based on a foundation of unevenly formulated presuppositions, and since all practices start from a point where things and their representations can no longer be distinguished, a dose of truth that the Western concept knows nothing about enters into every life. We talk in the West about “real people,” but only in order to mock these simpletons. This is why Westerners have always been thought of as liars and hypocrites by the people they’ve colonized. This is why they’re envied for what they have, for their technological development, but never for what they are, for which they are rightly held in contempt. Sade, Nietzsche and Artaud wouldn’t be taught in schools if the kind of truth mentioned above was not discredited in advance. Containing all affirmations and deactivating all certainties as they irresistibly come to light-such is the long labor of the Western intellect. The police and philosophy are two convergent, if formally distinct, means to this end.

Alcohol and television are not a staple of the West anymore, ORI, as you well understand. It goes even deeper, as the young have demonstrated well enough(quote above), it is now the philosophy of cruelty that is taking over...


Mon, 12/26/2011 - 12:10 | 2011778 MsCreant
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Post modern, radical relativism if you like, is really abused and misunderstood. In philosophy there is a tension between what is solid and what is percieved: Nature/nurture, Structure/Agency, big T truth and little t truth, determinism/free will, I could go on way too long. It is always there. Words point at things but the words do not absolutely embody those things. When something is named, it is limited in what it is permitted to be, but it is also enabled to be. Post modern just asks us to hold on to our sensitizing concepts lightly because words can be hegemonic and fascist. It asks us to consider "context." It asks us to know that there is always something being pointed at with a word, but the pointing is incomplete. There is truth though. The abuse of the idea is to take the statement that there is no such thing as truth and to make that one solid and obdurate as opposed to holding on to it loosely as well. Many modern deconstructionists are coming around full circle and deciding things like the concept of Justice are solid and real. Go figure. PoMo is taking an ass kicking because folks cherry pick it and those cherry pickens (so to speak) become representations of what PoMo is. In being misunderstood, the critique of it is representing the very process it protests.

Mon, 12/26/2011 - 12:28 | 2011806 JOYFUL
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MsCreant said:


Many modern deconstructionists are coming around full circle and deciding things like the concept of Justice are solid and real. Go figure

Nice to see you back MsCreant.  Regarding your statement as quoted, you must realize that many, many of the most obdurate aesthetes, drug abusers, sensualists, radical artist types of the second half of the C19th (re)converted to Catholicism in the latter part of their lives....horrified by what they had both witnessed and engendered, they sought a portal back to the security which they had serially disparaged....there is literally nothing new under the sun.

The entire panoply of C20th pundits, having reached the logical impasse at the end of their yellow-bellied roads, sought\seek the same kind of remorseful solace in what they so joyously abandoned.  Nothing so barren as the Haunted Heart! 

On a long enough timeline, we are all once again humble fore our Maker.

Mon, 12/26/2011 - 12:36 | 2011817 falak pema
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depends which brand you smoke...and never forget all brands are MAN MADE. For the rest...ask Aristotle. Metaphysics Bitchez!

Mon, 12/26/2011 - 12:55 | 2011839 JOYFUL
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strange mood you be in today Falak - Can't make head nor tails of your's all Greek to me! 


Greets from neo-Byzantium&Roger de Navarre(had I the ZH-EUS like power, I would have posted the image of Christ Pantokratorfrom the Treasury of Chilander monastery on Mt. Athos here.......)

Mon, 12/26/2011 - 13:02 | 2011847 gmrpeabody
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What the hell is everybody talking about...

Mon, 12/26/2011 - 13:08 | 2011863 GeneMarchbanks
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'Zacly. +1 for you sir.

I made a point using(what I thought to be an innocent reference), but I struck a nerve of what I can only assume to be Western Academians who apparently have an opinion on the matter.

So far...

Mon, 12/26/2011 - 13:24 | 2011872 JOYFUL
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sorry Gene, live several time zones east of y'all, and don't get much time to be 'academic'.....most of my time is devoted to cleaning out stables, and no, I don't mean of the augean kind...don't fret, it will all come clear...

on a long nuff time line!

*be careful of yur sumptions.  What we don't understand can be [poison] or [elixir]...depending pon our state of mind!

here be one for your state of soul bro!

Mon, 12/26/2011 - 13:39 | 2011904 GeneMarchbanks
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Wait a sec there. You realize I could be a migrant doctor working and residing in Cardiff, Wales or a simple young radical with lots of spare reading time in Riga?

Thanks for the tune, now I'm going to assume you're a New Religionist...

Mon, 12/26/2011 - 13:55 | 2011931 JOYFUL
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way east of Riga bro...way east of where 'religionists' go; out of the ashes of west bashing east, there's a new man agrowin, what even Falak don't know....


We be survivors. Our ancestors started off from the Eurasian plain. Smart money is comin home. Two fresh mounts, gold in them saddlebags, New Testament don't add  a lot of extra weight. Christendom,  East and West,  will heal and join together once agin, we will Rise and Ride against the main enemy, and our brothers of the Book will cover our flank.  That aint religion bro, that's called SelfPreservation....

better git it in yur Soul!

Mon, 12/26/2011 - 14:23 | 2011963 GeneMarchbanks
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Only Mother Russia is east of Riga, so you've given yourself away:)

New Testament and Self Preservation?! Sheeet sign me up! Seriously though, you seem major league Confused.

Staying away from 'Soul' experts would be a start though...



Mon, 12/26/2011 - 14:53 | 2012011 JOYFUL
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still off base sir: never been to Russia.

Eurasia is a big space....bigger than your current state of imagination it seems...I'm confused?!?!?

whose zoomin who?



Mon, 12/26/2011 - 16:11 | 2012118 falak pema
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kazakhstan...or Samarkand. Bhutan would be perfect! 

Mon, 12/26/2011 - 17:58 | 2012248 gmrpeabody
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A truck-stop along Interstate 40 would be my guess, or someplace comparable.

Tue, 12/27/2011 - 06:29 | 2012919 JOYFUL
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there are portions of Asia comparable to the Mojave, Peabody...congrats, your response was er, very well hedged.

Mon, 12/26/2011 - 14:08 | 2011909 falak pema
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I know it was xmas yesterday; but God is not necessarily in the image of Abrahamic religions; who have so many ways of interpreting His Truth one feels like in the Knossos maze. You should be more charitable towards non believers that's my point. Or towards believers of "schismatic doctrines" relative to your beliefs, if you be believer. We all know that the essence of divine beliefs is to engender as inevitable knee jerk many who believe in a deviant dogma just as passionately. That is the believers paradox! 

So schismatic smokers and agnostic neo-spiritual smokers are all smokers of divine hopium of different brands. Just like the non smokers!

Greetings to Christ Pankrator of your choice. I have two in mind of Sicilian origin : Cefalu and Monreale! I Love em as human expression of spiritual art form  without smoking their brand, as divine hopium.

Mon, 12/26/2011 - 20:24 | 2012418 MsCreant
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While I agree there is nothing new under the sun, there are individual, life shaping, gut wrenching, ephiphanies that we can have as individuals, cohorts, or nations. I do think these things tend to track through historical processes that are bigger than us. And we have agency and need not be passive slaves to them. Makes us profoundly faultless and profoundly responsible, at the same time, for everything we do.

Nice to see you too. Hope your holidays are restful and allow you to connect with all those you would like to!

Tue, 12/27/2011 - 07:09 | 2012960 GeneMarchbanks
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Ah, yes of course... Weltschmerz...

The last refuge. Carry on. Perfect example of the exhausted order, yet another reason the youths are disassociating themselves from us.

'Makes us profoundly faultless and profoundly responsible, at the same time, for everything we do.'

Um, pardon?

Tue, 12/27/2011 - 11:15 | 2013460 MsCreant
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When there is shame, and shame alone, people don't own their shit and stop being immature idiots. They evade, deny, hide, and other wise stay in deception with themselves and the world. The thing of it is, we do what we do to survive until we wake up. Many people are not born into situations where they are free or where they can even comprehend what freedom is. Did you ask to be born into a situation where your tax dollars are being used to shoot up and bomb children? I sure didn't. We are faultless there (it has always been going on), yet we are responsible for it happening because it is still going on. Faultless, I drop the shame that might tempt me to justify them, nationalism, and what they do in our name. Responsible, I act to stop it because I am awake rather than still in shame. 

Mon, 12/26/2011 - 12:32 | 2011811 falak pema
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You sound like man's existential struggle is like that of a snake that has swallowed his tail and is trying to tell head from tail. That's the philosopher's paradox. Also the liar's paradox. Also the lover's paradox. In fact in our monumental times a paradoxical pandora's box, a tautological, enigmatic, existential, holographic, incurably anthropological, freudian, sub cutaneous, post coital, pre spiritual sense of insensitivity that tells us that when logic questions facts and converts it inexorably into fiction we are in danger zone, like the ponzi maestros. Never eat your own tail. I had a good xmas and you? Looking forward to the new year...but piano, piano, in no hurry, one minute at a time. Never deny the inevitable always enjoy the epicurian ups as well the stoical downs.

Mon, 12/26/2011 - 20:19 | 2012414 MsCreant
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Very restful relatively stress free Christmas. I am fortunate and have so much. 

Sounds like this is true for you as well.

I don't always know what to do with you, but at times there is a lot of wisdom in your non-linear, lyrical postings.

Do you have a link to a picture of your avatar? I cannot make it out.

Mon, 12/26/2011 - 12:55 | 2011840 GeneMarchbanks
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All 'truth' is partial truth. What we're dealing with is really just disproportion. 

'PoMo is taking an ass kicking because folks cherry pick it and those cherry pickens (so to speak) become representations of what PoMo is.'

I'm not sure what that even means if anything? I'm guessing you're involved in soul deadening academic discussions over a simple little booklet that got massively over hyped by US media.



Mon, 12/26/2011 - 20:15 | 2012413 MsCreant
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You see it as soul deadening. Makes my soul soar. I have made a career playing with the stuff. We can agree to disagree? ;-)

Tue, 12/27/2011 - 07:22 | 2012977 GeneMarchbanks
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Writings of fringe French youths makes your 'soul soar'?

I see it for what it is, something that saps the organism and acts on fear and fear alone. Academic decadence, endless rationalization of the irrational.

'This is so American, man: either make something your God and cosmos and then worship it, or else kill it.' -DF Wallace

Tue, 12/27/2011 - 11:11 | 2013471 MsCreant
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Are we talking about Post Modern or the academy itself? If we are going to have a debate, lets keep our dimensions straight and be clear what is at issue. If you have a problem with the academy, I don't feel inclined to defend it because you are right. If we are discussing Post Modern, I am open to defending that because I see some use for it. Most academics don't do Post Modern and hate it. It makes war on their projects. The two should not be conflated.

Tue, 12/27/2011 - 11:32 | 2013531 GeneMarchbanks
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There is no debate. The absolute meltdown of all institutions is now well under way. Post modernism? You say the term, I nod my head and we pretend we understood each, my dear. This is the way of the (intellectuals)world. What is often mistaken as the evil is the representation of this breakdown of the social order. The Call and CI are immediately associated with... er... I have no idea, maybe Foucalt? Or Marxist sociology? And why? Simple. To give it a label, to categorize and to give association and context, but notice that it never actually comments on the content itself. Before this exchange deteriorates into Kantian categories and intellectual masturbation, I'll steer us back to my original point with ORI, which is a breakdown of meaning. The youth sense it better than the acclimated older generations and it should be recognized as so. Also, because much of what is said is correct whether you agree with their 'solutions' is irrelevant. On it goes...

Mon, 12/26/2011 - 13:38 | 2011901 disabledvet
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"I refuse to blame myself for problems i know i caused." there...i feel much better now.

Mon, 12/26/2011 - 14:26 | 2011970 cranky-old-geezer
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Meanwhile the matter is very simple, we've reached global debt saturation.


Yes, I believe we'll hear that phrase more often in 2012.

Mon, 12/26/2011 - 17:55 | 2012245 Widowmaker
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Money dies (becomes ineffective) beginning in 2012.

You read it here first.

Fiat = fraud.

Mon, 12/26/2011 - 15:09 | 2012046 MFL8240
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I have to agree Gene except the part about War not being a foregone conclusion.  If history is your guide than we will be at war shortly.  If you think these bums in DC want things to change then war is avoidable.  

Mon, 12/26/2011 - 14:41 | 2011996 AnAnonymous
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Debt forgiveness or trade war that spirals into real war, choice is yours citizens....

Made me laugh.

Typical US cheap attempt at diversion.

What debt forgiveness?

US citizens are fully into debt forgiveness. They are building on debt that is known not to be paid back.

They are loading on debt they know is going to be forgiven because resources will lack to pay it back.

It is typical to the US citizen consumption game.

Poor, poor US citizen Japanese. They are allowed to take free rides on the back on third worlders,who are in the US citizenism mythology, the true leechs.

Such a disconnection with reality.

US world order.

Mon, 12/26/2011 - 10:58 | 2011692 Martial
Martial's picture

Yep....if you question US/World economic policy, you are obviously with Al-qaeda and under S.1867 you will disappear...forever.

George W: "Either you are with US, or you are with the terrorists."

Mon, 12/26/2011 - 10:57 | 2011693 Irish66
Irish66's picture

Soon we all will be obliged to max out our credit cards.

Mon, 12/26/2011 - 11:40 | 2011747 DaveyJones
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they will be renamed obligation magnets

Mon, 12/26/2011 - 11:02 | 2011699 Jack Burton
Jack Burton's picture

How do you define toast? "Japan"!

The endless debt bomb grows and grows and the math seems to indicate there IS an end game, but the political authorities seem to ignore it all.

Wishful thinking? Ignorance? Just plain don't care? Who can say.

Mon, 12/26/2011 - 12:51 | 2011834 sun tzu
sun tzu's picture

kick the can. hopefully it will be somebody else's problem

Mon, 12/26/2011 - 13:49 | 2011920 falak pema
falak pema's picture

toast jubileee! but after fuku fallout has been contained... Something we don't know whats what about its deadly reality.

Mon, 12/26/2011 - 11:03 | 2011700 toadold
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Meanwhile Japanese public opinion of the ruling party and the unelected bureaurcrats who built internal empires that leach off taxpayers continues to head for the cellar in the polls. The finance ministry desperately wants to protect its rice bowl and won't hear of spending cuts.  Uhcle Rei would lose his phony baloney job if that happened. Politicians and ministers who retire then take jobs in the industries they regulated has become a subject of satire in manga.  

Glad nothing like that is happening in the US......oh wait. 

Mon, 12/26/2011 - 11:11 | 2011711 LoneCapitalist
LoneCapitalist's picture

Japan is borrowing more than they collect from taxes, and theyre going to be buying Chinas debt? Sounds like real solid global system.

Mon, 12/26/2011 - 11:24 | 2011726 Ponzi Unit
Ponzi Unit's picture

Japan is #1 on Kyle bass' hit parade.

Mon, 12/26/2011 - 11:27 | 2011729 JW n FL
JW n FL's picture



He is correct in the numbers.. but how it will play out?? he is clueless.

Mon, 12/26/2011 - 11:29 | 2011733 JW n FL
JW n FL's picture



I LOVE Kyle so dont come to me with some bullshit I dont like or understand or grasp.. cause I do!

when's the last time you were in Japan?

hit me back when you do some boots on the ground and have a better understanding of what those people will do to save their honor. Unlike America!

Mon, 12/26/2011 - 12:53 | 2011835 sun tzu
sun tzu's picture

I'm sure you know all about the Japanese having visited once or twice

Mon, 12/26/2011 - 13:06 | 2011859 JW n FL
JW n FL's picture



I always missed my friends during summer time.. when they went home to Japan to continue thier schooling..

Japan has school 12 months a year.

no summer break like for us.

and I have spent more than a few months in Japan during my life.

but you keep swinging away at pitches that are not even there.

Mon, 12/26/2011 - 11:58 | 2011765 GeneMarchbanks
GeneMarchbanks's picture

The 'numbers' don't distinguish Japan much form other countries for example the UK. Truth is even Bass cannot predict where it'll bust first. It really might just be chance in the end but the anxiety level is high so people refuse to admit that it could start in their own back yard.

Mon, 12/26/2011 - 13:02 | 2011846 JW n FL
JW n FL's picture



in all honesty I see America failing before Japan.. our grid lock v their national pride? yeah we are not going to fair so well..

dont get me wrong when America is attacked or a serious problem comes up.. sure we will band together as a nation and can get an emmense amount of work done.

but this is a pissing match over paper and people know it.

most of us here will not feel it.. let me re-phrase.. most of us here.. will eat and have some sense of food safety as opposed to the other side of that very thin coin.

the markets are going to un-wind.. it is not if? but when! will the unwind begin.

how many of our country men and women will suffer? after YEARS! NO!! DECADES!!! of farm subsidies.. instead of sharing the food with the hungry! it is destroyed to maintain price stability for our Good Christian Farmers!! while people around the World (once again) DIE of starvation!

Good, Wholesome, Middle America, Farm Belt, Bible Belt, Christians helping to Murder Children thru Starvation Elsewhere.

We the People! Pay subsidies to destroy edible food to protect price stability.

We the People!! Pay for Rockefellers NOT! To farm their land for price stability!

We the People!!! Have gotten what We deserved from the democracy we participate in.


If We the People are to fucking stupid to see the facts right under their noses.. and opt out into 5th Ave. MEME, Matrix, make believe land!

Then it is hard to provide a valid counter argument against sweeping out the trash that this Country is FILLED WITH!


There are to many dumb people using to many resources.. and these people will NEVER! Participate in or even try to make the World a better place.

It is Logical that these People (the Majority of We the People) should be allowed to kill their peers.. Natural Selection has been Stopped! For so many Generations that the World is now polluted with the weak minded and especially here in America.


I find it hard to add any counter balance to the conversation that has already been had. See below for the number revolving around resource managment thru population control.


Department of Energy 2011 (International) Outlook

We are all FUCKED! (this will only be news to a few of you idiots)

Department of Energy Press Page.

Video presentation.

The PDF short report (direct link).

how about some back ground?

This is for the attention deficit crowd, 1 minute and 45 seconds long and in cartoon medium.

this one is a little longer.. and maybe more for the grownups.. to all of my Friends here.. this is Jeff Rubin, again.. no need for you guys / gals to have to suffer it again.

Al Bartlett on energy consumption versus population

Uploaded by human4832 on Dec 7, 2009

Prof. Al Bartlett discusses his perspective on energy consumption versus population growth. Unending population growth is the root cause of our increasing demand for energy.

This is from a panel discussion with Professor Al Bartlett and former Colorado Governor Dick Lamm at the October 2009 ASPO-USA Denver, Colorado symposium on peak oil. For more information and additional panel videos, see . Also see .

The Most IMPORTANT Video You'll Ever See (part 1 of 8)

Uploaded by wonderingmind42 on Jun 16, 2007

2 million views for an old codger giving a lecture about arithmetic? What's going on? You'll just have to watch to see what's so damn amazing about what he (Albert Bartlett) has to say.

I introduce this video to my students as "Perhaps the most boring video you'll ever see, and definitely the most important." But then again, after watching it most said that if you followed along with what the presenter (a professor emeritus of Physics at Univ of Colorado-Boulder) is saying, it's quite easy to pay attention, because it is so damn compelling.

Entire playlist for the lecture:

David Rockefeller speaks about population control.

Bill Gates on energy: Innovating to zero!

Fracking Contaminates Towns Water Supply

It was a little town with no one of importance in it.. and we need the energy more than another nowhere, piece of shit, red neck infested, town in the middle of bum-fucked-Egypt!


Mon, 12/26/2011 - 13:18 | 2011874 hardcleareye
hardcleareye's picture

Jesus JW, what the hell happen to your Christmas Spirit....  that was a hell of a rant, even by your standards....

Peace on earth goodwill towards man.....  I guess it's not going to happen.

Mon, 12/26/2011 - 13:50 | 2011923 GeneMarchbanks
GeneMarchbanks's picture

Great demonstration of how we're loosing the War on Drugs... I'm giving him a +1 so he can maybe convert over to the side of Love...

Mon, 12/26/2011 - 14:33 | 2011980 JW n FL
JW n FL's picture



The Rockefellers.. Bill Gates.. and Al Bartlett provided the numbers and drive to de-populate the planet a little.. not me!

sorry that the limited resources of the planet will last longer minus a Large portion of the populace!

it is just numerical fact!

now lets get the poor killing the poor already so that the rich can enjoy yet more of the limited resources than they already do!

Mon, 12/26/2011 - 15:01 | 2011992 GeneMarchbanks
GeneMarchbanks's picture

I feel like you just realized this recently...

It is done so in free will of all the participants. Beyond that we cannot go...

Mon, 12/26/2011 - 13:51 | 2011925 falak pema
falak pema's picture

remind me to send you a bottle of champagne for new year.... and it won't be fiat. 

Mon, 12/26/2011 - 17:33 | 2012222 Widowmaker
Widowmaker's picture

Silver and sunshine nullify much of that central bank porn your watching.

One of these days people will wake up. The universe is teeming with energy, not greed or mans fraud money and boundless bullshit to support it.

More paper lies, you bet.

On behalf of counter parties dripping with systemic risk, no peace -- guaranteed.

Mon, 12/26/2011 - 13:38 | 2011902 merizobeach
merizobeach's picture

"Truth is even Bass cannot predict where it'll bust first."  Irrelevant.  As Bass says, his job is to not lose people's money.  He says that his fund is mostly long, but he acknowledges that he must hedge against the risk of those investments, and in his view, the greatest asymmetry in the world now is in Japan.  As he says, a 200 basis point rise on their interest rates, and their debt service will exceed tax income.  Their debt service is already half their tax revenue.

Mon, 12/26/2011 - 15:07 | 2012042 GeneMarchbanks
GeneMarchbanks's picture


Actually it's extremely relevant. If you haven't already realized his real hedge is a ranch in Texas that some have called a 'fortress', Japan might go the way of the dodo first or not. But if someone somewhere happens to start dumping US paper en mass a la Russia, then Bass will have bigger fish to fry than his CDS on Japanese steel makers...

Mon, 12/26/2011 - 18:00 | 2012229 Widowmaker
Widowmaker's picture

Bass is a fag that is completely dillusional and filling you full of shit.

Like his sand castles are any different than the others... Oh I forgot his garage of nickels will hedge against the weather.

Dumb shits like him killed the golden goose with fraud, now it's nickels to clean up the ... Fraud?

One bass, many cups with a sucker for each.

Mon, 12/26/2011 - 20:41 | 2012439 jm
jm's picture

There does seem to be a few commenters that sound like they want to suck him.


Mon, 12/26/2011 - 11:24 | 2011727 Tekoa Da Silva
Tekoa Da Silva's picture

excellent piece.

Mon, 12/26/2011 - 11:25 | 2011728 JW n FL
JW n FL's picture



Japan will be fine!

if there is a debt write down.. the people of Japan would take it upon themselves.

that is the difference between them and us.. they have some honor still.

see china for shorts.

Mon, 12/26/2011 - 11:51 | 2011760 High Plains Drifter
High Plains Drifter's picture

the chinese had experience with japanese honor in manchuria in the 1930's.  the nips could have given, the jewish cheka in the ukraine a few pointers, so it would seem........

Mon, 12/26/2011 - 12:54 | 2011836 sun tzu
sun tzu's picture

You've been watching too many movies like Rising Sun and Black Rain

Mon, 12/26/2011 - 13:03 | 2011849 JW n FL
JW n FL's picture



I enjoy Japan, when I am there.

Mon, 12/26/2011 - 13:46 | 2011916 RockyRacoon
RockyRacoon's picture

I guess we tend to envision that all good things disappear in a financial calamity.  They don't.  People keep moving and stuff keeps happening.   The folk of any country seem to just carry on as best they can.  Financial peril created by the government types can cause great harm, but stuff just keeps getting done.

Mon, 12/26/2011 - 22:19 | 2012552 JW n FL
JW n FL's picture



Thank You Rocky.. and Merry be-lated Christmas to You and Yours!

Mon, 12/26/2011 - 23:40 | 2012642 CvlDobd
CvlDobd's picture

How is your third arm coming in? (If you have been there since March)



Mon, 12/26/2011 - 11:33 | 2011739 Svener
Svener's picture

So many "it's all going to come crashing down" yet it never does. I'd like to know when this crash is coming, possibly 12-21-12 hmmmm?

Mon, 12/26/2011 - 13:56 | 2011933 merizobeach
merizobeach's picture

Dude, the crash is 'in progress'.  It takes an acute awareness to recognize the significance of moments as they happen.  (Thus we're here for a daily dose.)  Life is a process; if you're waiting for the Big, Sudden, Final End-All, well, that's coming, too; look far enough into the future and see that, "on a long enough timeline..."

Mon, 12/26/2011 - 14:40 | 2011994 cranky-old-geezer
cranky-old-geezer's picture



A dam doesn't burst all at once.

First there are signs of weakness and overstress.  Little groans and rumblings deep in the structure.

There are signs of stress fractures and cracks developing, days before, even weeks before.

When it does finally let go, it happens when nobody is expecting it.


Mon, 12/26/2011 - 11:37 | 2011742 BigInJapan
BigInJapan's picture

The Japanese will not change because they have one fundamental flaw - hubris.

Hubris:  a loss of contact with reality and an overestimation of one's own competence or capabilities.

You're witnessing the death of the Japanese people, in real time. 10 years from now, this place will be a Chinese province.


Mon, 12/26/2011 - 11:58 | 2011764 jm
jm's picture

Boku wa anata no iken ni hantai desu kedo.

It's not hubris, just reversion to centuries-old rhythms of history where China is a center of gravity.  Bushido is in flux and will evolve to fit the times.

Mon, 12/26/2011 - 12:24 | 2011797 Cast Iron Skillet
Cast Iron Skillet's picture

.. a radioactive chinese province ...

Mon, 12/26/2011 - 22:20 | 2012554 JW n FL
JW n FL's picture



China has NEVER! Ruled Japan in 3,000 + Years..

I would start quoting the dates Japan has Ruled China but I just dont feel like wasting that much time on someone as stupid as you.


Mon, 12/26/2011 - 11:40 | 2011745 Sudden Debt
Sudden Debt's picture

At least these bonds will never be totally worthless!
You get a half ounce gold coin with the rest of the paper....

Mon, 12/26/2011 - 11:45 | 2011749 RobotTrader
RobotTrader's picture



If things were so bad over there, why are JGB's and the Yen skying as if they were gilt-edged securities?

They are clearly not printing fast enough to bring out the bond and currency vigilantes.

Ben Bernanke is not printing fast enough either.

In fact as long as the CRB Index continues to crash, nobody is printing fast enough.

We need global inflation to be around 4% - 5%, not negative 1%.

Mon, 12/26/2011 - 12:05 | 2011773 LongBallsShortBrains
LongBallsShortBrains's picture

You got that right, Robo. 10 year monthly yen futures chart:

Yen has been on a rampage. Going to get ugly.

Mon, 12/26/2011 - 23:41 | 2012646 CvlDobd
CvlDobd's picture

Looks like its getting rising wedgy.

Mon, 12/26/2011 - 13:10 | 2011865 hardcleareye
hardcleareye's picture

Robo, why don't you go play the xbox games your Mom got you for Christmas.

Mon, 12/26/2011 - 13:48 | 2011919 RockyRacoon
RockyRacoon's picture

He's having problems understanding the instructions.   As a matter of fact, he hasn't been able to get it out of the box yet.

Mon, 12/26/2011 - 14:55 | 2011998 cranky-old-geezer
cranky-old-geezer's picture



We need global inflation to be around 4% - 5%, not negative 1%.

It's 10% now moron.

If things were so bad over there, why are JGB's and the Yen skying as if they were gilt-edged securities?

It's called t-r-a-d-e  s-u-r-p-l-u-s.  Go look it up (your mom can show you how).  It repatriates Yen, maintaining worldwide demand for Yen.  Basic Econ 101.

Ben Bernanke is not printing fast enough either.

You believe printing is a suitable substitue for production?

Ha ha, so does Bernanke, 'bama, and bankers ...making all four of you morons.

Mon, 12/26/2011 - 11:58 | 2011763 fonzanoon
fonzanoon's picture

Can anyone on here answer as to why Japan would not just start dumping a lot of their treasuries? What is the point of a rainy day fund if it is pouring and you don't use it?



Mon, 12/26/2011 - 12:02 | 2011768 High Plains Drifter
High Plains Drifter's picture

they can't . they are stuck with the paper. like so many others.   if they did that, then the great ruse known as fiat would be exposed once and for all. then the herd would start stampeding for the door.  if they do it, they must be subtle somehow.  but the trouble is , these days, the whole world is watching so how can they do it on the sly? 

Mon, 12/26/2011 - 12:39 | 2011819 NorthPole
NorthPole's picture

Not only are they not dumping, but they've been actually vastly expanding their 'investment' in Treasuries as of lately; doubled them within last 1.5 years as a matter of fact.


Japan is a ward of USA.

Mon, 12/26/2011 - 13:53 | 2011926 disabledvet
disabledvet's picture

great question! certainly gets us right out of the ludicrous world of economics and right into the serious world of Philosophy where we belong. In other words "if Japan is so self-sufficient why buy ANYONE else's debt?" To me the short AND long answer is "access to markets." In a world of competition success is defined not by "saving the homeland" but "access to other people's markets." Japan Inc is one the greatest "success" stories imagineable in this world. But look at the price: "ward of American debt markets" with all the rest of us now apparently. The world is still coming to terms with "what the meaning of is" is here. I think as a Great War in the Middle East unfolds what will be discovered is investing in the USA is investing in the most powerful protection racket on earth...which has both advantages and disadvantages. One disadvantage is "you give us all your work to do" via "financing your government spending with American debt." Europe and the euro appeared to be the exception...until they failed to rescue any neighbor in need. And now look at them: buying American debt to finance their own government spending on the grandest of scales. Given such a reality to me "the failure of the EU is guaranteed." Pondering the collateral damage of course is even SCARIER.

Mon, 12/26/2011 - 14:57 | 2012020 cranky-old-geezer
cranky-old-geezer's picture



They will ...when China and everybody else starts dumping them.

Mon, 12/26/2011 - 12:07 | 2011777 fonzanoon
fonzanoon's picture

How did Bernanke hand the banks 7.7 trillion a few years ago on the sly? How did MF global comingle customer funds on the sly? I think the last thing they have to worry about is how to do something on the sly. TPTB seem to have that stuff handled easily. i think if the market really puts pressure on them they will just start dumping them and put the ball in our court. But so far they have not.

Mon, 12/26/2011 - 13:56 | 2011935 disabledvet
disabledvet's picture

but are they paying taxes on it? however one "get's the dough" have to pay Uncle Salami. Period. I say better to "play ball" and not scheme at all myself cuz in the Age of the Internet there is no place to...."hide."

Mon, 12/26/2011 - 12:21 | 2011794 lunaticfringe
lunaticfringe's picture

Oh those dumb Japanese. In the United States, we are responsible and disciplined. We would never get caught spending more money than we took in. Winning!

Mon, 12/26/2011 - 13:09 | 2011864 JW n FL
JW n FL's picture



Double Winning Drenched in Tiger Blood! LULZ!

Mon, 12/26/2011 - 12:26 | 2011802 the 300000000th...
the 300000000th percent's picture

Kyle Bass is soooo right on the money again!


Mon, 12/26/2011 - 12:32 | 2011812 Ironmaan
Ironmaan's picture

Is it possible for the average Joe (me) to purchase CDS on Jap treasuries? Where/how.

Mon, 12/26/2011 - 12:41 | 2011822 Hansel
Hansel's picture

No, not really, unless you are average moderately rich joe.  CDS require a big upfront payment and then regular payments afterward.  Brokers don't sell CDS in average joe piker sizes.

Mon, 12/26/2011 - 14:00 | 2011939 disabledvet
disabledvet's picture

and of course now we know "repayment of the CDS is in fact optional." Which means "FAR higher upfront costs for the so called insurance." Stick with US treasuries! Go long "the military" as a new "underclass"...(something "less than a private") is created. suffice to say "the demand for this class will be astronomical."

Mon, 12/26/2011 - 12:41 | 2011823 NorthPole
NorthPole's picture


Mon, 12/26/2011 - 12:33 | 2011814 Hansel
Hansel's picture

Pointing out how screwed up the Eurozone is isn't having the effect it did a few months ago.  The U.S. will have to start pointing fingers at Japan now, or China.  Anything to keep from looking in the mirror.  (this is not a shot a Tyler, just venting)

Mon, 12/26/2011 - 13:04 | 2011851 Peter Pan
Peter Pan's picture

At what point do the compliant Japanese citizens realise that their governments bonds are poison and start buying gold instead?

Now there's a thought about where gold might get its booster charge..

Mon, 12/26/2011 - 13:06 | 2011858 Debugas
Debugas's picture

what is the problem if you can borrow at zero interest rate ?

Mon, 12/26/2011 - 13:44 | 2011913 Schmuck Raker
Schmuck Raker's picture

Which Central Bank are you with?

Mon, 12/26/2011 - 13:11 | 2011868 fockewulf190
fockewulf190's picture

The generation being born now is so totally fucked. Cannon fodder wont be some abstract protest chant, it will be one of the main branches of employment. Expect to see cardboard signs clutched in young hands with such slogans as "Will fight for food!".

Mon, 12/26/2011 - 14:03 | 2011942 disabledvet
disabledvet's picture

In Egypt the slaves actually ran the military for centuries. In fact it is one of the few slave rebellions in the entire History of Slavery to have succeeded.

Mon, 12/26/2011 - 17:36 | 2012110 falak pema
falak pema's picture

Praetorian guard of Mamelukes, imported slaves like Janissari under Ottomans, thrust on to the front page of history by that most famous fool of the Middle Ages : Saint Louis of France, predecessor to GWB and believer like he in "clash of civilizations". He got his comeuppance at Mansourah and it promoted the slave dynasty as numero 1 in Egypt. The subsequent Mongol invasion made them the ONLY moslem kingdom for two centuries who had defeated both Crusaders and Mongols in united Egypt and SYria. The Mamelukes were like Communist military regime of Gen Giap; he defeated both French and Americans.

But a military regime does not win the heart of the people. It does not feed the tree of knowledge. Entrepreneurial Islam died under the Mamelukes. The Arabs became reactionary under a military regime and they lost their "scientific" competitive advantage right there in around 1400. Never caught up with Renaissance and ENlightment. 

Morality : Like for Giap, military regimes can win wars, but not the peace and development. Islam lost out big 'cos of having military regimes, autocratic ideology, there where they were world leaders of science in 1250!

Mon, 12/26/2011 - 13:23 | 2011879 jaygee
jaygee's picture

So what happens when everyone owes everyone everything. Can we wipe the record clean and start over or do we have to wipe each other out first and start over. I trade in the currency markets and have learned that everything is connected. It isn't usually as bad as people think because of that. 

Mon, 12/26/2011 - 14:36 | 2011985 AnAnonymous
AnAnonymous's picture

Made me laugh.

No. It is certainly notlike that.

US citizens are consuming and consuming. Big imbalances.

When the time to pay back comes, it will appear that actually US citizensare not able to pay it back.

And they will keep what they have consumed.


Theft is central in US citizenism.

Mon, 12/26/2011 - 14:25 | 2011967 non_anon
non_anon's picture

ha ha, oh shi it

  • The number four:
    The number four is considered inauspicious because it is pronounced the same as the word for death (shi). Therefore, one should not make presents that consist of four pieces, etc. In some hotels and hospitals the room number four is skipped.

  • Mon, 12/26/2011 - 14:33 | 2011981 AnAnonymous
    AnAnonymous's picture

    Cheap US propaganda...

    It is the result of Smithian economics.

    When you concentrate wealth in one area by dragging from other places, at one point, hoping to develop the rest of the areas is no longer on the cards.

    So why bother?

    You keep transfering from other places because well, you have turned them into filth pits and it can not be reversed. The only transfer direction is from the areas to the place you have concentrated thewealth.

    No turning back.

    It will keep going. Japanese show they are totally aware of the situation and will keep playing the card to its fullest.

    The Earth is finite, the resources and all.

    Now it is all about investing in a few areas that have monopolized the use of world resources because developing the rest is no longer a possible option.

    Mon, 12/26/2011 - 14:46 | 2012004 fockewulf190
    fockewulf190's picture

    Why do I have this feeling that the Japanese are just going to kamikaze a large portion of it's debt not by default, but simply by non - redemption. The vast majority of Japanese debt is owned by it's own citizens, and the demographics of Japan show that many are close to death. One last service for the Crysanthemum the debt up and take it to the grave or will it back to the state.

    Mon, 12/26/2011 - 15:20 | 2012065 krispkritter
    krispkritter's picture

    Japan will be fine, that is until the giant, mutated monkeys start showing up:

    And they just turned off the radiation pump at Fukushima so they are ready to start the 40 year cleanup of their economy, er, their country:

    It'll be wine and roses, just watch! 

    Mon, 12/26/2011 - 15:49 | 2012101's picture

    Largest holders of JGB's are now net sellers and the GPIF retirement fund ($1.4T) is liquidating $80 billion this fiscal year to pay benefits and more next year.  This has to be added on to the issuance # 175 t yen as these existing JGB's will have to be sold to a new buyer.  That means new buyers must be found for at least 235 T (issuance plus existing bonds being sold by GPIF).  Japan Post Holdings, the largest holder of JGB's (75% of assets)  and the largest financial institution in the world is also a net seller of JGB's.  They are shrinking and trying to diversify away from JGB's.  Banks are also loaded with JGB's (generally 20 to 30% of assets).  What happens when a bank wants to get out; will the other banks buy?  Can the banks put on more when Basel III is demanding diversification and limiting interest rate risk?  It is specifically the problem that the bonds are held in Japan that is the problem because we are going to destroy wealth beyond stocks and real estate.  We are now going to witness the destruction of 50% of the liquid savings of the Japanese people.  

    Mon, 12/26/2011 - 16:27 | 2012131 fockewulf190
    fockewulf190's picture

    Just for shits and giggles, what would happen if the JG claimed it sold zig-billion worth of bonds to private citizens, but in reality these citizens were made up, all old and single, and with none other as the state as a benificiary. In other words, with the right Arthur Anderson type accounting work, they print money and never have to pay it back or ever pay any interest. Kampai! Nice trick of the trade right? No wonder a lot of Italian debt is also "held by the people".

    Mon, 12/26/2011 - 17:01 | 2012168 XRAYD
    XRAYD's picture

    The Japanese commit Hara Kiri if they can't pay their debts.


    Can you imagine Giethner doing that?

    Mon, 12/26/2011 - 17:30 | 2012215 Snakeeyes
    Snakeeyes's picture
    Soon they will have to unwind. The Euro Crisis and The Great Unwind – Why Monetary Policy Can’t Fix Europe’s Woes

    Mon, 12/26/2011 - 19:57 | 2012398 HungrySeagull
    HungrySeagull's picture

    Debt-ku-shima to go with the Fuku-shima this year.


    Party, be happy today for tomorrow we rot.


    Lucky are those who dare escape Japan.

    Tue, 12/27/2011 - 00:05 | 2012669 covert
    covert's picture

    the modern japaneze people are very nice and good people, we wish them well.


    Mon, 12/26/2011 - 23:43 | 2012649 papaswamp
    papaswamp's picture

    The Zombie Countries begin to rise....

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