3 ms·

Japanese debt is Yen denominated and, if they want, they can extinguish it by printing money. This option is not available to Greece/Italy/Spain/Portugal/Irelan

• daydream 15y ago
  But by printing money they'd wipe out (or at least reduce) the real value of their peoples' savings - basically all those bonds the Japanese people bought. The consequences would be borne by their own people, not some foreign banks. This may be politically unpalatable.
• Yrlec 15y ago
  There are limits to how much you can print without creating a currency crisis. http://en.wikipedia.org/wiki/Hyperinflation#Examples_of_hyperinflation http://en.wikipedia.org/wiki/Hyperinflation#Examples_of_hype...
  • rayiner 15y ago
    You can pursue an economic policy that creates high levels of inflation without necessarily triggering hyperinflation. The goal of course would be to gradually inflate away the value of the debt, not to pay it all back immediately.
    • alexmat 15y ago
      Wouldn't that wipe out the very same people who invested in Japan? There are a lot of regular Japanese people who hold Japanese debt. Wiping it out via inflation is equivalent to wiping out the wealth of regular Japanese people to save the Japanese government.