Ambrose Evans-Pritchard again is pushing his Japanese sovereign default and hyperinflation hyperbole on Japan and claiming support from PIMCO's Paul McCulley and Dylan Gracie of Societe Generale; presumably drawing their inspiration from the Latin American and Asian sovereign defaults.... and economic historians
Despite a series of sound bites about declining Japanese demographics; the Japanese consumer being duped as the overwhelming major buyer of their government's debt; the necessity for Japan to sell down on their ownership of 10% of entire stock of US TBs and other sovereign bonds and other disjointed titbits; Pritchard misses the blazingly obvious point that the Japanese Government's debt is largely domestically held and has a world leading export sector which still runs a massive trade surplus.
While Japan's debt situation is not healthy, it is not appropriate to contrast Japan's situation with that of major debtor nations. If anything at all, it appears that the national debt situation is pushing the Government to consider raising the consumption tax from 3% to 5% as early as next year; despite the impact that this will have on domestic consumption. On the other hand, the zero interest rate policy shows no sign of changing in the medium term.
http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100002951/a-global-fiasco-is-brewing-in-japan/
http://search.japantimes.co.jp/cgi-bin/nn20100111a3.html
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