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All that money invested in the Postal Savings System is, as far as I know, gone. As the article noted, it's invested in "safe" government bonds, i.e. the money
by nandemo 17y ago
All that money invested in the Postal Savings System is, as far as I know, gone. As the article noted, it's invested in "safe" government bonds, i.e. the money has been long spent and with the current and rising worthy of a 3rd World country debt to GDP ratio it's vanishingly unlikely it'll ever be repaid.
Money isn't exactly invested in the Post Office, it's deposited in their savings accounts. Those deposits are guaranteed just like savings accounts in any other country. Well, if everyone tried to take out all their money at the same time we'd have a problem, but that's true of any bank in a fractional-reserve banking system.
Japanese bonds are one of the most liquid investments in the world. If you're are so sure they'll never be repaid, contact your broker and find a cheap way to short them! Seriously, if Japan defaulted we'd have a much worse crisis than the recent one. More likely, Japan will just gradually increase the tax burden and devalue the currency in order to pay the debt.
- hga 17y agoMy comment is of course about the long term ... but the medium term might not be very fun: Japan is aging at a terrific rate, and those elders will be pulling money at net out of their savings accounts (especially those who have had pension records lost by prefectures). So there will be a "run on the bank" at some level, but not the sort that causes a panic. Bottom line here is that by definition current consumption must come from current production. Now they might be able to snare some current production from other countries by selling those bonds abroad ... but all in all I just don't see the current Japan Inc. making it work for too many more decades. Peoples and societies have gone extinct before, I don't think you can say it's impossible in this case.