Japan’s federal debt is scheduled to reach 240% of GDP by the end of this year. Not surprisingly, Fitch downgraded Japan today, from AA to A+. Here’s the standard treatment from the Financial Times: Fitch Downgrades Japan on Public Finances.
To rate Japan A+ is generous, to say the least. It is *impossible* for Japan to meet its obligations by growing its economy. It is undergoing the early stages of a demographic implosion, and its economy is a shambles after the 3/11 disaster. As Kyle Bass is well known for explaining, Japan’s financial situation is “spring loaded,” with disastrous consequences, if even the slightest changes occurs to its debt financing costs, and these changes are coming fast! Here’s Bass, discussing the matter, in brief:
In my upcoming course, The First History for Adults, Part 5-1: The History of Japan, I will discuss how Japan got into its present predicament, what the essence of the present historical moment is for Japanese culture, and what the likeliest outcomes are that will shake the world in the 21st century. The course starts July 14th, and discounted registration is still available!