? Those magnificent men and their flying machines | Main | Off your meds, I presume ?
March 20, 2010
There is little hope
Yukio Noguchi is one of the few economists who predicted correctly the collapse of Japan's "bubble economy" in 1987.
Noguchi now warns Japan is in danger of bankruptcy (the mostly likely alternative being hyperinflation). Enjoy!
Compared with Greece, Japan's gross government debt is far worse, at 181 percent of gross domestic product — the highest among the developed countries. Greece's debt-to-GDP ratio is 115 percent.
Japan's present debt-to-GDP ratio is only comparable with what it was at the end of World War II. At that time, the only way the government could reduce the debt was through hyperinflation, which wiped out much of the people's wealth with skyrocketing prices.
"I can't tell exactly what will happen (this time), but what actually happened after the war was that the price level surged 60 times in just over four years," Noguchi said. "If the same thing happens again, a ¥10 million bank account will have the same net value of just ¥100,000 today. It's actually possible," he warned.
Japan's present debt-to-GDP ratio is only comparable with what it was at the end of World War II. At that time, the only way the government could reduce the debt was through hyperinflation, which wiped out much of the people's wealth with skyrocketing prices.
"I can't tell exactly what will happen (this time), but what actually happened after the war was that the price level surged 60 times in just over four years," Noguchi said. "If the same thing happens again, a ¥10 million bank account will have the same net value of just ¥100,000 today. It's actually possible," he warned.
Posted by Ghost of a flea at March 20, 2010 08:44 AM
