Japan faces general outbreak of the debt crisis

 Total debt crisis faced by the outbreak of Japan

News: Following the sing the air after the European sovereign debt crisis, leading international rating agencies and hedge funds recently to target Japan. Rumors have also been eyeing Wall Street financial speculators in Japan, fishing for a longer waiting time. Deflation, an aging population and the political uncertainty, have considerably weakened the Japanese government to resolve the debt crisis. European bonds in Japan will step followed the full-blown debt crisis? Once the outbreak of the debt crisis, in turn will give the Japanese and what impact the global economy?

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Reason: the Japanese economy as a long-term senior experts, Jinbo Song Interpretation nowadays for its unique perspective of the hubbub of the causes and consequences of Japan's debt crisis, and forward the possibility and impact of the crisis is.

7.21 million yen debt per capita is facing the most serious crisis in years

Hong Kong Commercial Daily: Recently Japan's debt problem surfaced again, the severity of divergent views on how markets, Standard & Poor's took the lead , the first time in 9 years, reducing its sovereign credit rating. IMF also said that Japan into the most severe since the 1875 debt crisis. Rumor has it that long ago took aim at hedge funds in Japan, the Wall Street financial predators are waiting for an opportunity. Japan will become the target of international hedge funds aimed at?

Jinbo Song: In fact, the United States, Europe and Japan have the potential existence of sovereign debt crises, in this regard three countries have a lot of the material can be excavated. Comparing the three, the U.S. sovereign debt crisis is most serious, but not speculation hedge funds and sovereign debt crisis of the U.S. outbreak, because if this happens, the hedge fund itself be disastrous. To divert attention, international hedge funds first European launch an attack, the Japanese launched an attack again. As early as last year, I had communicated with the Japanese scholars, the U.S. hedge funds are targeting Europe, the next step is to Japan.

Japan, the existence of a potential debt crisis? Must first be recognized, the Japanese government really big size of the debt, accounting for more than twice the GDP, the highest in the developed world. Japan in 2009, 2012 and 2016, the name of its public debt relative to their proportion of GDP, respectively 217%, 232%, 277%. The International Monetary Fund (IMF), the available data, Japan is caught in the most severe since 1875, the debt crisis. According to the Japanese Finance Ministry on Feb. 10 released statistics show that, as of the end of December 2010, the balance of Japan's national debt has reached 919 trillion yen, compared with data published last September by about 10 trillion, Japanese people per capita debt burden has increased to 7.21 million yen. IMF forecasts, Japan's debt if the existing rate of increase continues, the ratio of public debt in 2016 will reach 277%, Japan will become the most developed countries, worsening the financial position of the history of the country.

inflation rate will increase the most deadly crisis is inevitable

Hong Kong Commercial Daily: Japan will become the EU whether the debt crisis point after another? What are the factors behind it and play a decisive role in influencing?

Jinbo Song: profound impact on Japan's debt crisis, the point is that the era of global inflation. Inflation began to rise last year, some mitigation of this year, next year will continue. Japan, with rising inflation will induce the potential out of the debt crisis, it would be very serious. This is more than a decade the Bank of Japan not to raise interest rates causes interest rates remain at zero. Because each increase of 1 percentage point interest rate, bond interest will be high. But inflation, interest rates will inevitably rise, which will undoubtedly greatly increase the interest payments on Japanese government debt burden, which is aimed at the Japanese hedge fund is currently one aspect of the very deadly.

political turmoil of population aging

the other hand, reveal the debt crisis in Japan, Japan, frequent change of government, political instability, restrictive fiscal policy that is not easy to perform. In addition, aging of the population may have some unpredictable factors, increase the debt crisis. Japan's debt crisis largely on its national pension fund, with the population born after the war into an aging, much of the Japanese fiscal nationals used to pay pensions to become a major burden on government finances. Since the original design of the system is based on the producer more than the basis of a dependent, and not take into account that there will be so many retirees, the number of existing pension and pay the number of pensioners very different place, Governments need to fill this gap, leading to difficult for the Government to honor commitments made to the pension age continue to push back, the amount of money to receive discount. This is the external assessment of Japan's debt crisis is another important factor. The inflation factor is the most fatal.

Hong Kong Commercial Daily: Some people say that Japan's debt crisis is a huge powder keg, the debt crisis than the United States and Europe is more serious. There are arguments that, although the large number of Japanese government bonds, but more in domestic liquidity, will not burst like the euro as the debt crisis. If we can maintain interest payments, it will not bust, do you think Japan's debt crisis will eventually burst it?

Jinbo Song: Japan 95% of the debt structure of Japanese financial institutions and individuals to purchase, very few foreign investors to buy, so in order to suppress the foreign debt is very difficult to do in Japan, and its resulting fears can not be Greece, Portugal and Ireland, compared to the concerns of investors. Together with the Japanese are very patriotic, patriotism with buying and holding bonds will play a stabilizing role. Japanese government bonds as long as the pinch in the hands of users will not sell, the Japanese government bonds of the crisis broke out would not have imagined as high.

However, to the key point is that, as the international commodity and other commodity prices to rise, imported inflation would break out, these will penetrate into the Japanese economy, raise interest rates as inevitable The choice, which will ultimately increase financial debt interest, the crisis becomes almost inevitable.

China's large holdings of JGBs a purely commercial activity

Hong Kong Commercial Daily: Japan's financial unsustainability, is causing investors to panic. China had large holdings of Japanese government bonds, causing a lot of speculation that the outside world. This is China's debt crisis and understanding relating to Japan? This is a purely economic behavior, or whether there are political factors behind the inside?

Jinbo Song: In fact, the potential debt crisis in Japan in 2002 and 2003, already badly speculation, Japan's best-selling 2003 book called Saying the book, if the Japanese government's debt money of 1 million yen to shop, you can go to Earth from the Moon and back. At the time that Japan's debt is very dangerous, but fortunately, saved the hot Chinese economy in Japan, a large number of imports from Japan, the Japanese export enterprises flourish and grow, to help the Japanese economy out of the mud.

had large holdings of Japanese government bonds in China is the result of a purely commercial judgments. As far as I know, the Chinese Foreign Exchange Trading Foreign Exchange is entrusted to a professional company to do more than the company's talent came from Europe and America, and their high level of international foreign exchange trading, the talent and the talent of U.S. financial institutions easier through, to make money or not, safe or not is entirely commercial operations. [1] [2]