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> sheer magnitude will overcome the lenders’ belief Japan lends to itself. The BoJ owns so much of the government bond market that there are days where the be

by qnt 6y ago

> sheer magnitude will overcome the lenders’ belief Japan lends to itself. The BoJ owns so much of the government bond market that there are days where the benchmark bond simply doesn't trade [1]. Under absolutely no circumstance will Japan have any issue repaying Yen denominated debt when they have a monopoly on the Yen. They're theoretically not far away from just retiring the whole bond market and just running an overdraft at the BoJ for all government borrowing requirements. Can you provide evidence to your point on hyperinflation happening all of a sudden too? I think all instances in history (except maybe Zimbabwe, but I've lost the details) involve external obligations that are unable to be met (War repatriations payable in gold for Germany, extreme dependance on imports for Venezuela since the economy was so misbalanced, high USD denominated debt burdens for Argentina ... etc). I [1]: https://www.wsj.com/articles/nobodys-trading-10-year-japanese-government-bonds-1521113501 https://www.wsj.com/articles/nobodys-trading-10-year-japanes...

MR4D 6y ago
Take a look at this page on Investopedia. [0]. All the examples are less than 24 months. Also, WEForum has some stats from 2019, where Venezuela has been in hyperinflation for a longer period of time. [1] and of course, Lebanon is probably the most current example. [2] I’ve saved the best for last, though. Nicholas Kraus is probably the leading expert on hyperinflation, and has a great list here. [3] [0] - https://www.investopedia.com/articles/personal-finance/122915/worst-hyperinflations-history.asp https://www.investopedia.com/articles/personal-finance/12291... [1] - https://www.weforum.org/agenda/2019/08/inflation-deflation-venezuela-global/ https://www.weforum.org/agenda/2019/08/inflation-deflation-v... [2] - https://www.reuters.com/article/us-emerging-inflation-graphic/lebanon-follows-venezuela-into-hyperinflation-wilderness-idUSKCN24O20J https://www.reuters.com/article/us-emerging-inflation-graphi... [3] - https://www.cato.org/sites/cato.org/files/pubs/pdf/hanke-krus-hyperinflation-table-may-2013.pdf https://www.cato.org/sites/cato.org/files/pubs/pdf/hanke-kru...
MR4D 6y ago
> Japan lends to itself I meant to address this point separately. What you say is technically true, but if they just retired the debt, Japan would simultaneously become a much poorer country. Remember, the owner of the debt gets to mark it as an asset, so while the debt would be canceled out, the assets would drop in an equal amount [0]. [0] the Accounting equation is Assets = owners equity + liabilities, so a reduction in liabilities must cause a corresponding reduction in assets. And yes, it’s that insidious, but it is spun by people who have an interest in people not understanding this.

by qnt 6y ago

MR4D 6y ago

Take a look at this page on Investopedia. [0]. All the examples are less than 24 months. Also, WEForum has some stats from 2019, where Venezuela has been in hyperinflation for a longer period of time. [1] and of course, Lebanon is probably the most current example. [2] I’ve saved the best for last, though. Nicholas Kraus is probably the leading expert on hyperinflation, and has a great list here. [3] [0] - https://www.investopedia.com/articles/personal-finance/122915/worst-hyperinflations-history.asp https://www.investopedia.com/articles/personal-finance/12291... [1] - https://www.weforum.org/agenda/2019/08/inflation-deflation-venezuela-global/ https://www.weforum.org/agenda/2019/08/inflation-deflation-v... [2] - https://www.reuters.com/article/us-emerging-inflation-graphic/lebanon-follows-venezuela-into-hyperinflation-wilderness-idUSKCN24O20J https://www.reuters.com/article/us-emerging-inflation-graphi... [3] - https://www.cato.org/sites/cato.org/files/pubs/pdf/hanke-krus-hyperinflation-table-may-2013.pdf https://www.cato.org/sites/cato.org/files/pubs/pdf/hanke-kru...

MR4D 6y ago

> Japan lends to itself I meant to address this point separately. What you say is technically true, but if they just retired the debt, Japan would simultaneously become a much poorer country. Remember, the owner of the debt gets to mark it as an asset, so while the debt would be canceled out, the assets would drop in an equal amount [0]. [0] the Accounting equation is Assets = owners equity + liabilities, so a reduction in liabilities must cause a corresponding reduction in assets. And yes, it’s that insidious, but it is spun by people who have an interest in people not understanding this.