Japan’s government debt is massive when compared to its GDP. Until recently it cost Japan almost nothing to service this debt, indeed at times the yield was negative. The cost of servicing this debt has now increased by a massive amount, up to ten or twenty times what it was just a few years ago. How is Japan going to service this debt as it gets rolled over? Hitting the start button on the printing press perhaps:
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Japan is now so iffy that, even with all the other cuckooness in the world I find time to worry about it. As a nation and people they will not collapse or explode, but they all too easily could shift from helping drive everyone forward to being a dead drag on the world economy for quite some time.
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Dear Divitias and David,
Japan is entering demand side economics in the cycle but without the US centering demand side econ…well we are all wasting four years.
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Isn’t this old news. In the boom times in Japan hundred year mortgages were common. The poop hit the fan in the 1993 Asian meltdown. Since then they have struggled and people have worried about their prospects.
Higher interest rates is the latest wrinkle.
And they are a model for what might happen in the US if we don’t get our deficits under control.
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Yep, US 30 year Treasury yield now over 5%
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Dear Paul,
Not at all. We need to expand our industrial base. We are wasting four years. Japan is in tow.
I disagree, there aren’t a ton of shared lesson here. Japan experienced the mother of all asset bubbles and when it burst they couldn’t really work out the contagion out of the system for a number of reasons. Worse, that’s right about when their demographics problem began to kick in, so it was very difficult to grow GDP.
But their debt for the most part has been zero interest rates or even negative interest rates. Even though interest rates have been raising, they are still well below the inflation rate–which means Japan is financing the debt for free. Japan hasn’t had any problems managing all that debt. That’s not the situation we’re in.
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This might not be a good development for Japan.
In a nation that has long been synonymous with working hard and showing unswerving loyalty to an employer, more and more Japanese people are “quiet quitting” their jobs.
A growing number of Japanese are choosing to clock in at work exactly on time and leave as soon as they can.
They are not looking for praise or promotion from their seniors. They are unbothered by the prospect of better pay if it means more work, while performance-related bonuses also fail to inspire them.
According to a study of 3,000 workers aged 20 to 59 conducted by the Mynavi Career Research Lab, a Tokyo-based employment research agency, some 45% say they are doing the bare minimum in their jobs. Significantly, employees in their 20s are most likely to admit to being “quiet quitters.”
SLACKERS!!! 
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