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timber1956

7,423 Posts.

152

05/07/15

17:03

Post #: 15583358
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Originally posted by Daytr ↑

So what you are saying Timber is that the US & I suppose Japan can continue to borrow as there are plenty of lenders whereas Greece does not. Japan case in point, historically has borrowed from its own people & as they age they are less likely to be buyers of bonds & more likely to be sellers to fund their retirement.
Japan therefore will need to borrow more from overseas investors in future & foreign investors will be less willing to accept basically zero interest rates. Hence Abe's QE program trying to stimulate inflation so they can raise interest rates to attract foreign investment. Obviously the very risky downside is that the cost of Japan;s huge amount of debt increases dramatically.
It really comes down to confidence & the US & Japan have not lost the confidence of investors... yet at least.
Japan though with its aging population is potentially a ticking time bomb & due to where their debt is held ie Mr & Mrs Watanbe it would be a lot harder to quarantine than something like Greece.

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"So what you are saying Timber is that the US & I suppose Japan can continue to borrow as there are plenty of lenders whereas Greece does not."

That is a reasonable statement.

However I am not sure that there is anything useful to be learned from Japan or the US. They have their own currencies and have to ceded part of the sovereignty over their own banks to an external institution.
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