The spectacle of Japanese government debt continues to dazzle. Projections are for debt-to-GDP to reach 230% in 2012. The numbers just make me scratch my head. Japan will borrow half of all budget expenditures. With an average interest rate of around 1% on issued debt, they will still spend roughly half of all tax revenue on interest on their debt. Their debt will pass one quadrillion yen this year.
Here are some recent articles on the Japanese debt situation...
Japan Seeks to Market Record 145 Trillion Yen Bonds in 2012; Kicking the Can Japanese Style
The Endgame: Japan Makes Another Move
Last April, I tried to make some guesses about how the Japanese might make needed adjustments. I have no idea how it will resolve itself. Maybe Japanese debt, unlike Eurozone debt, can grow to the sky without limits. Maybe they can support a debt-to-GDP ratio of 1,000% or more without any problems. After all, yen are just electronic numbers, right?
I can't stop looking at Japanese debt with both a mix of both awe and terror.
UPDATE: another article on Japanese debt, one that has the same title as my blog entry!
Check the post dates, though, and you will see that mine was published first. My title was completely original, which doesn't mean the other guy didn't also have the same original thought. Or did he?!?? Haha.
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