5 ms·

Assume all of Greece's debt is external, then the external debts of Greece and Japan are not too different: External Debt GDP = Net Greece:

Assume all of Greece's debt is external, then the external debts of Greece and Japan are not too different: External Debt GDP = Net Greece: 100% * 120% * $ 355bn = $426bn Japan: 5% * 200% * $4900bn = $490bn If Japan defaults, the main effect will be that the Japanese people will be a lot poorer. There will also be some external effects on bond holders, investors in the stock market, and exporters to the Japanese market. I suspect the stoical Japanese have already written off all the govt debt they hold - the default won't exactly be a surprise when it happens.

patio11 16y ago
I suspect the stoical Japanese have already written off all the govt debt they hold Oh, you suspect wrongly.
- hga 16y ago
  Especially since---please correct me if what I've read or remember is wrong---the Postal Agency's Bank, which has most? of the people's savings (that's old info, could be different now that there are more options) has way too much exposure to Japanese government debt.
Maro 16y ago
I suspect the stoical Japanese have already written off all the govt debt they hold If that were the case, they'd be selling their debt, offloading it on the market, thus pushing the price down, thus bursting the bubble. Since this hasn't happened, I guess they haven't written their gov't papers off yet.
- mikhailfranco 16y ago
  I was exaggerating when I said 'all', but probably 'some'. By 'stoical' I meant that they might be prepared to take the loss for the country's sake. After all, they could have always got a better rate by investing abroad, even with some currency risk. The existence of the carry trade shows that international financiers have exploited the stoicism or irrationality of Japanese citizens. Perhaps it is just 'not the done thing' in Japan to short your country, pull out your savings and burst the bubble.
  - hga 16y ago
    As I recall it's only quite recently (last decade or two) that the average Japanese has had a non-yen denominated investment option. As I recall, prior to that there were three options, only one of which was sane: The Postal Agency's banking system, which is safe. Regular banks, which are not (latest example I can remember is depositors being presented with loan documents they'd never seen before...). These banks exist for others in the country. Stocks. I really shouldn't have to say anything more about these (see the system of cross holdings and how uppity investors are dealt with), even ignoring the market's very long term if not permanent plunge. Again, the Japanese stock market as I understand it does not exist for the benefit of individual investors. (To my knowledge Japan doesn't or at least didn't have anything like our US TreasuryDirect (http://en.wikipedia.org/wiki/TreasuryDirect http://en.wikipedia.org/wiki/TreasuryDirect).)
rubashov 16y ago
> the main effect will be that the Japanese people will be a lot poorer I'd say the main effect will be a global financial meltdown to end all meltdowns.
known 16y ago
I agree. No nation will collapse due to internal debt.

patio11 16y ago

I suspect the stoical Japanese have already written off all the govt debt they hold Oh, you suspect wrongly.

hga 16y ago
Especially since---please correct me if what I've read or remember is wrong---the Postal Agency's Bank, which has most? of the people's savings (that's old info, could be different now that there are more options) has way too much exposure to Japanese government debt.

Maro 16y ago

I suspect the stoical Japanese have already written off all the govt debt they hold If that were the case, they'd be selling their debt, offloading it on the market, thus pushing the price down, thus bursting the bubble. Since this hasn't happened, I guess they haven't written their gov't papers off yet.

mikhailfranco 16y ago
I was exaggerating when I said 'all', but probably 'some'. By 'stoical' I meant that they might be prepared to take the loss for the country's sake. After all, they could have always got a better rate by investing abroad, even with some currency risk. The existence of the carry trade shows that international financiers have exploited the stoicism or irrationality of Japanese citizens. Perhaps it is just 'not the done thing' in Japan to short your country, pull out your savings and burst the bubble.
- hga 16y ago
  As I recall it's only quite recently (last decade or two) that the average Japanese has had a non-yen denominated investment option. As I recall, prior to that there were three options, only one of which was sane: The Postal Agency's banking system, which is safe. Regular banks, which are not (latest example I can remember is depositors being presented with loan documents they'd never seen before...). These banks exist for others in the country. Stocks. I really shouldn't have to say anything more about these (see the system of cross holdings and how uppity investors are dealt with), even ignoring the market's very long term if not permanent plunge. Again, the Japanese stock market as I understand it does not exist for the benefit of individual investors. (To my knowledge Japan doesn't or at least didn't have anything like our US TreasuryDirect (http://en.wikipedia.org/wiki/TreasuryDirect http://en.wikipedia.org/wiki/TreasuryDirect).)

rubashov 16y ago

> the main effect will be that the Japanese people will be a lot poorer I'd say the main effect will be a global financial meltdown to end all meltdowns.

known 16y ago

I agree. No nation will collapse due to internal debt.