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The Japanese Finance Minster, Yasushi Kinoshita, stated that, \u201c”Japan is fiscally worse than Greece.<\/strong>”\u00a0 This statement is huge.\u00a0 At a conference in Japan, the Finance Minister also noted that in 2011 Japan ran a 10% deficit and their debt to GDP ratio skyrocketed to over 230%.\u00a0 When we look back at economic history when a country breaks through the 160% debt to GDP number they usually have either economic collapse or a currency crisis.\u00a0 Only Great Britain during its imperial might in the 1700 and 1800\u2019s were able to come out of a debt load this large.\u00a0 What makes all this particularly interesting is that most of Japan\u2019s debt is held domestically.\u00a0 Because of this the Japanese financial system will be much more susceptible to fiscal shock.<\/p>\n An additional piece of news makes the statement by the Japanese Finance Minister even more serious.\u00a0 This year alone Japan will have to pay back in full nearly $3 Trillion, nearly 25% of all the debt they owe.\u00a0 Financial stability will be completely dependent on the old bondholders being willing to simply reinvest their money in the new bonds.\u00a0 If bondholders don\u2019t reinvest Japan will have to look for new investors.\u00a0 This year of all years it will be particularly hard to get new bondholders because so many countries have debt coming due like Japan. \u00a0There are far more options than investors at this point. \u00a0Therefore, Japan could be looking at an escalation of a fiscal crisis.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" The Japanese Finance Minster, Yasushi Kinoshita, stated that, \u201c”Japan is fiscally worse than Greece.”\u00a0 This statement is huge.\u00a0 At a conference in Japan, the Finance Minister also noted that in 2011 Japan ran a 10% deficit and their debt to … Continue reading