Wednesday, March 14, 2012

Japanese Ministry of Finance official admits, “We are worse than Greece” - Japan’s debt-to-GDP has soared to over 230% - Fiscal deficit is up to 10% of GDP

More proof that the Japanese government is run by a bunch of complete idiots!

From Zerohedge: Japan's Shocking Keynesian Slip: "We Are Worse Than Greece"

In a stunning turn of events, a Japanese Ministry of Finance official admits to Richard Koo's worst nightmare "Japan is fiscally worse than Greece". Bloomberg is reporting that, at a conference in Tokyo, Yasushi Kinoshita says Japan's 2011 fiscal deficit was up to 10% of GDP and its debt-to-GDP has soared to over 230%. What is more concerning is the Kyle-Bass- / Hugh-Hendry-recognized concentration risk that Kinoshita admits to also - with a large amount of JGBs held domestically, the Japanese financial system is much more vulnerable to fiscal shocks (cough energy price cough) than Europe. Of course, the market is catatonic in its reaction to this - mesmerized by the possibility of buybacks and hypnotized at big-banks-passing-stress-tests - though we do note the small reverse stronger in USDJPY has reversed as this news broke and the USD pushes modestly higher.

Now why in the world would this government wonk admit this in public? This will only cause the bond market to worry and perhaps the flight of foreign capital!

Two words: Got gold?


Anonymous said...

I saw a reference to that Zero-hedge article earlier, with no link, so I'm glad you posted this one.


Time will tell.

I bought a tiny 1/20th oz. coin today (because the many 1/10th oz. coins were all sold out the day before) ... then I read what Marc Faber had to say and I wondered if I should wait to buy more:

13 March, 2012
Gold: There`s Significant Support Around 1500, But It Could Drop Lower
All I'm saying is that, in my opinion, the gold price correction is not yet entirely completed. I see significant support around the 1,500 dollars/ounce level, but it could drop lower.

We could have a big correction if global liquidity tightens or they stop printing money. - in the Middle East Investment summit, Dubai

Of course, that likely isn't the view from Japan.

On the plus side, I bought a bike. My first new bike in,... oh, twenty years. And some spare inner-tubes, and spare tires. Suppose I'm as prepared for "it" as I can get?

Suddenly I've got that leprechaun song in my head again, "Bring me yer gold..."

Anonymous said...

oops, forgot to sign it, again.

- clark

Murasaki Shikibu said...

Maybe it's a ploy to make the JPY weaker... No, I didn't really say that.

Mr. Nobody said...

Hello Mike,

We are only in the opening moves of this global game of Go (print more money out of thin air) it seems. It appears much too early to discern what their overall strategy is with this one move.