3 ms·
The debt is only owned by the government because they are printing money like crazy to convert their debt to 0% interest bonds. Japan is in an enormous amount o
by AboutTheWhisles 9y ago
The debt is only owned by the government because they are printing money like crazy to convert their debt to 0% interest bonds. Japan is in an enormous amount of financial trouble and the moment inflation starts to show and panic sets in the race will be on to get out of yen into anything people can get their hands on, which will only make the problem worse.
- Retric 9y agoDon't bet on that. They bought up 40% of their bonds and only hit 0.02% inflation. Now it's possible they might cause some inflation if they keep going but hitting 2% inflation would be a good thing and they have plenty of room to continue. PS: Remember deflation is a very real issue. Fighting that by buying government bonds seems to be the most ethical way to distribute free money.
- AboutTheWhisles 9y agoInflation doesn't happen overnight. The governments plan to start printing like crazy and buy up bonds is fairly recent.
- Retric 9y agoThey started doing this five years ago. https://www.reuters.com/article/us-japan-economy-boj/boj-to-pump-1-4-trillion-into-economy-in-unprecedented-stimulus-idUSBRE93216U20130404 https://www.reuters.com/article/us-japan-economy-boj/boj-to-... Going from 96.19 yen to USD to 106.04 is movement, but it's not all that huge or obvious this was the only cause of that change. Now, if you are thinking in terms of multi generational effects. I can see plenty of moral hazard from doing this, but if you want 2% inflation you need to keep creating new money.