Tuesday, December 27, 2011

The Japanese Titanic: Japan's Public Debt Will Surpass ¥1 Quadrillion Yen Any Day Now

How much is a quadrillion? That's a thousand trillion....

Recently, I've been getting my daily money market news fix from the usual suspects: Mish Shedlock, Karl Denninger and Mad Max Keiser but there's another blog that I've found that hits the mark consistently and updates more than several times a day. It's called Zerohedge. I highly recommend it because the guy that runs it seems to get the scoops on what's going on days and even weeks faster than all the rest.

The latest one rings the alarm bells for Japan once again. Japan's Public Debt is about to surpass ¥1 Quadrillion any day now. Jeez! How many zeroes are there in a quadrillion? I didn't even know without having to look it up.

Let's see that's a one with fifteen zeroes after it. Like this: 1,000,000,000,000,000.

Zero hedge reports in Japan Will Raise More Cash From Debt Issuance Than Taxes For Forth Year in a Row

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 article goes on to stomp on these Keynesian "economists" (read: clowns) who claim that the government should increase spending to pick up on falling consumer spending and loosen monetary restraints (read: print like hell) in order to pump up the economy before a recovery starts:

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.

Want to see what a quadrillion pennies look like? Here ya go!

Here we have buildings (in front) used for scale at a trillion. They're now dwarfed by the large cube of pennies in back (quadrillion). The large cube is a quadrillion, or a thousand times one trillion. This cube is roughly a half-mile wide and would weigh an astonishing three billion tons.

Translation: Japan is doomed. 2012 and beyond are going to be rough ones.

Happy New Year! If you are in Japan, may I suggest drinking as much as you can, while you can. 


Tom Bixenmann said...

I hope that Japan will muddle through 2012 and beyond at least, especially since I plan on being there participating in the JET program. I do know that it can't be as bad as what is going to hit the U.S.

Mr. Nobody said...

Hello Mike,

Here is an update with Kyle Bass:


I presume of particular import to your readers is in the video at around 31 minutes, where he talks about Japan. A quote: "Japan is going to be the biggest problem the world faces."

Also interesting about Japan is the following video (aka the Japanese Government is a Ponzi scheme. They spend more than twice of what they receive in taxes, and 50% of their tax income goes to pay the interest on the debt):


Is this a game of central bankers, as to who can spin up the printing presses the fastest? Will the "winner" be the leper left with the most fingers? Or is Mr. Bass right, and that when government finances break down in countries, it means more war?

All the best, and a happy New Year!

mike in tokyo rogers said...

Ouch, Mr. Nobody. That was painful.... I do expect the breakdown, I hope Japan can stay out of any wars....
Happy New Years to You. May 2012 see you and yours with health and prosperity!

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