Japan’s debt: 1,000,000,000,000,000 Yen


#1

[Permalink]


#2

So it’s a trillion dollars. Big deal… Well, I suppose it is a big deal, especially in Japan considering their growth problems, but it’s not such an outrageous figure when you consider what consitutes the wealth of nations these days. What’s the value of Google or Apple right now, considering as a value a dollar figure their boards would accept for a cash sale of either company? You can hardly even imagine what that number would be…


#3

The Federal debt is approximately 11.959 trillion dollars. Or 119.59 trillion dimes. Or 1.1959 quadrillion pennies.

For as long as I can remember. the dollar has been worth between 75 and 150 yen. A yen is more or less equivalent to a penny.


#4

Golly a quadrillion! That’s a big number! But a yen is about a penny, so that’s more like $10T. It’s a good thing the yen isn’t smaller, or they would have reached a quadrillion even sooner. Maybe we should measure our debt in pennies as well. It would make it that much more eeeevil, and the people would clamor for austerity! I wonder if I could sell this idea to the Koch brothers for ten trillion pennies?

UPDATE: Brainstorm! What if we measure the Japanese debt in Indonesian Rupiyahs? That way, it’s a HUNDRED QUADRILLION! It’s a hundred times worse!!!


#5

The dollar to yen exchange rate is about 1 to 96 right now so a yen is about the value of a penny. If you state the US national debt in pennies then it is 1.8 quadrillion pennies.

Throwing out big round numbers is nearly meaningless to general public and just as often meaningless to the media. I can’t count how many times I have seen reporters mix up millions and billions.

It is more meaningful to state things in terms of a % of some other value. % of GDP makes the most sense for national debt values.


#6

I can! It’s been like a million times! Or maybe a billion!


#7

Strictly notional. Eventually, there will be another Bretton Woods style conference and the men will sit around tables and decide whose debt gets wiped and who is doomed. As ever. Might take a few decades, but it will happen. Fiat fate.


#9

It’s actually over 10 trillion dollars, although I agree the headline is a bit sensationalist. Japan is in the midst of a huge debt problem, and has been since the 90s - even compared to Greece they are in way over their heads. Japan has far and away the highest debt to GDP ratio of any developed nation.


#10

That number is so big if it goes up one more yen it rolls back to 42.


#11

Who holds the ‘markers’?
What happens if every country goes into debt?
Can a nation be foreclosed on?


#12

how much would that be in Doll Hairs?


#13

You realize that 10 trillion dollars is a lot of money, right? Yeah, we shouldn’t go nuts and run screaming down the austerity path, but lets not trivialize it, okay? As the economy turns around we really should be considering ways to stops hemorrhaging money. People cite Keynes like he grave a free pass to to see how fast you can rack up crippling debt. Keynes didn’t actually advocate that. Keynes said that when times are good, you should actually be saving money so that when times are bad, you have a big ol’ hunk of cash to throw into stimulus. He never suggested that you should hemorrhage money when times are good, and then hemorrhage it faster when times are bad.

The real problem is that the Western world, with Japan included is that we are running a massive ponzi scheme that is completely dependent upon low interest rates. As long as rates are low, we can take loans to pay off loans that are coming due. People are willing to give loans because they believe that governments can get more loans to pay their loans. This is exactly how the housing bubble in the US came into existence. A delusional belief that people could refinance forever is what made the utterly insane mortgage backed securities look like a great deal.

The problem is that the entire premise is built upon interest rates remaining low until the end of time. If suddenly people get nervous about the government’s ability to repay, they will stop lending. Once that happens, OTHER people get worried about the government’s ability to repay. The interest rate rapidly goes up, and we are screwed. Sure, the government can just start printing money at that point, but that gives you rapid inflation.

Honestly, I don’t care how we do it. I just don’t want a big old Damocles sword hanging over all of our heads. Cut spending, raise taxes, or do both. What makes me ill is when we do neither and raise spending and cut taxes under the delusional view that this ponzi scheme of borrowing to finance government can go on forever.

If banksters and the like really piss you off and you think they have too much influence in government, try this novel idea for size… stop taking their fucking money. It gives them power over you, AND it makes them richer and richer. A nation with a balanced budget can sit back and laugh at them.


#14

Fun fact: The Japanese counting system is actually based on groups of four powers of ten, not three. So, not only is it not a remarkable number taking into account the actual value of the Yen, it’s not even a particularly round number in Japanese.


#15

It’s highly inappropriate to use the term “Ponzi scheme,” because the US economy is not predicated upon deception. Also, the typical con artist is not backed by the full faith and credit of the United States. (I’m assuming you’re American, but the idea works fine in Euros.)

Actually, borrowing to finance government can go on forever. There has never been a time when the US did not issue bonds; in fact, I don’t know of any nation that hasn’t issued government bonds, at least since Babylon. There could be exceptions I’m not aware of, but not many.

In fact, if the US stopped issuing bonds, it would throw the world economy into a whole new kind of chaos. US Treasury instruments are considered the safest investment in the world - far from a Ponzi scheme - and millions of contracts around the world demand escrow funds be held in US Treasury bonds or the like.

Almost all of the mess the world economy is in right now is due to austerity, and every economist in the world is aware of this - with the exception of a tiny minority on the right-wing fringe. Cutting spending even further would only throw the nation and the world deeper into recession, or full-blown depression.

I won’t even go into the painful effects austerity has on the lives of most people. Balanced-budget fans are never interested in “anecdotal evidence.” Or any other kind, for that matter.

EDIT: Wait a second, weren’t we discussing the Japanese national debt? I’m not Japanese!


#16

A ponzi scheme has nothing to do with deception. A ponzi scheme is when the “profit” is predicated on getting someone else to toss money in. Deception is a helpful tool in running a ponzi scheme, but it isn’t what defines one. It works until someone gets cold feet. Once someone gets cold feet, whoever is holding the last level of the ponzi scheme gets screwed. Our borrowing IS a ponzi scheme. We borrow to pay off our previous borrowing. Each time we do it, we slab another layer of debt on. This works. You can do this. You can keep doing this until the day you can’t, just like in a ponzi scheme.

Further, we are using deception. Promising that we can cut taxes and increase spending with no consequence is deceptive. You are essentially promising that you can have something for nothing. Both conservatives and liberals happily do this, with one promising that we don’t need tax income, and the other promising that we don’t need spending restraint.

I’m not making a radical proposition here. I am just asking that we consider for a moment that we have made ourselves extremely fragile. Our financing of government is utterly reliant on low interest rates and a continued willingness of lenders to lend. If that collapses, we are going to get a quick,short, and brutal lesson on austerity. Western governments literally can’t pay for themselves without lending.

Instead of building fragility on top of fragility, we should be working towards escaping under the debt. It is a win win for everyone except banks. Escape the debt, and you suddenly don’t have to sluff off a few percentage points of your GDP to pay down your interest. You can use that money for useful things, rather than lining the pockets of bankers. You escape the influence of bankers on the economy and politics. Should the bad times hit, you can use your savings, as Keynes advocates, for stimulus, without laying the foundation for the next debt driven crisis.

Raise taxes, cut spending, or do both. I don’t care. Just stop promising something for nothing and building fragility into government.


#17

The international investment community disagree, and are perfectly happy with America’s debt level. But what do they know? Maybe Glenn Beck has them all snookered.

Just for the record, I personally favor returning tax levels to those of the Eisenhower era, with a proportionate increase in spending. The economy worked pretty good back then, or so I hear.


#18

I am all for going back to Eisenhower style of financing and spending. You will note that over the course of Eisenhower’s presidency the debt as a portion of the GDP dropped from ~70% to ~50%. The president/congress to achieve that sort of thing will get a solid high five from me.


#19

Oh yeah. Damn arithmetic. I have to admit $10 trillion almost seems like real money.


#20

My scenario for a new Bretton Woods is that everyone borrows money from China for a couple decades (they sell China bonds), then they all agree to screw China. The Yuan is not a reserve currency, so China’s economy is vaporized in a single day and the rest of the world laughs then gets back to rebuilding its manufacturing base without Chinese competition.

Right there you solved:

  1. debt
  2. trade deficits
  3. chronic global unemployment

So…lunch?


#21

National debt is largely meaningless, especially in the current economic climate. Its an accounting function more than anything else. Most of our current “debt” in the US is money borrowed by the Treasury from our version of a Central Bank, the Federal Reserve. Its essentially borrowing money from ourselves. Unless increased debt translates into significant or hyper inflation there is no problem with national debt rising way higher than it is now. In fact, hyper-inflation has only occurred in a very few instances historically, and none of those instances were due to over-printing of currency. In all those instances there were other circumstances that really caused hyper-inflation. In the case of Germany and Zimbabwe, the two classic cases, it was the expropriation and destruction of the vast majority of their productive capacity that caused hyper-inflation – in other words, there was enough cash but not enough to buy with it. That is what causes hyper-inflation, not a large increase in national debt.

Add in the supposedly scary “bond vigilantes” who, any moment now for the past 5 years, were going to demand higher returns for purchasing US treasuries, and we have another bogeyman put to rest.

In our current economic environment, with large amounts of our productive capacity in mothballs due to lack of demand, there is NO WAY inflation will be an issue. That is why Japan is in no danger. Scary sounding numbers, as many have already commented on in this thread, are just more irresponsible stupidity from the press.

If you are really interested in how our economy actually works, you should read about Modern Monetary Theory, the closest we have come yet to actually explaining how economies work. “MMT”, as it is known, is currently in the ridicule stage within the mainstream press, but will, just like Keynesian econ in a prior generation, be the only option left after our next collapse and all mainstream economic theories show their utter uselessness and destructiveness. I thought that would’ve happened after 2008 when neoclassical/neoliberal econ policies were shown to be total failures, but powerful people and institutions have a way of holding on even after they have been discredited. Read Steve Keen, Bill Mitchel, Stephanie Kelton, Bill Black and Michael Hudson if you want to understand how things really work, economically speaking.