Great read so far guys. I feel smarter today.
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| NJ5 said: Something to keep an eye on: huge and rare move down on the Euro and Pound today due to debt crises in several European countries. Euro 3% down against yen and more than 1% down against the dollar. Euro to yen: http://finance.yahoo.com/q/bc?s=EURJPY=X&t=1d&l=on&z=m&q=l&c= Euro to dollar: http://finance.yahoo.com/q/bc?s=EURUSD=X&t=1d You can bet Japanese gaming companies are paying attention to this, and American ones will too if it goes more down. Another hit on the fragile gaming industry could result. (btw, "financial crisis / recession is over" my ass)
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The pound will recover because It has to devalue before it can recover, the Euro however is much more entrenched due to it's wide usage.
E.G. if 2 countries are in recession but three are recovering, the two countries in recession will stay in recession because there currency has not devalued enough to encourage investment and vice versa if three are in recession and 2 are recovering, the recovering country's will lose out due to a weak currency!
So this means that while the pound may suffer, it is a short term thing, where the Euro will have longer term problems.
The only solution to this problem is to get other European member states to invest in the weaker memberstates, thereby straining the profitable nations to build up the failed!
This is why we say NO to the EU!!!
Kasz216 said:
200% GDP. I did not know that. Weird they always seemed like a fiscally conservative government... i mean it seems like they've done nothing even before the financial crisis when their economy was kinda depressed. |
Don't be, Japan's economy can service it's debt, they plan to be in debt!
The trouble is with countrys like the UK and USA where our debt outweighs our economy, it will take the UK 20 years to recover costing each tax payer around £23,000 over the course of their taxpaying lives!
kowenicki said:
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But tax is not the only way you service debt, you can service debt using anything that is worth something e.g. gold stocks!
| kowenicki said: Dont worry, the Yen will have to be devalued soon, it has to unless Japan want to utterly screw themselves. They have to do something soon, Japans tax take this year wont even meat their own debt payments. They are effectively bankrupt too. On Europe... expect Portugal, Spain and Italy to follow Greece soon. It was sooooo obvious that a common monetary policy and common currency couldnt work for such different economies... especially economies propped up by inflows of european cash. |
the Euro is still one of the most stable currencies ever.. FAR more stable then the GBP or USD
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LordChris915 said:
Don't be, Japan's economy can service it's debt, they plan to be in debt! The trouble is with countrys like the UK and USA where our debt outweighs our economy, it will take the UK 20 years to recover costing each tax payer around £23,000 over the course of their taxpaying lives! |
Yeah, every country plans to be in debt but surely Japan didn't plan to be in debt to such a degree.
UK debt is around 61.7% National GDP (late last year). That's quite a difference.
kowenicki said:
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The difference is that the majority of Japan debt are public debt (170% of GDP by the World Factbook) while the UK debt is mainly external(365% of GDP)
The big problem in Japan is that they doesn't have enough tax payer to fund the retirement of their aging population. That is, they are deep in the red in when it come to the money needed to run the program to take care of all these retiree and probably other social program. On one hand it's a problem they can solve internally on the other it's probably not going to be a solution these retiree are going to like.
The UK however is more at risk as seeing it's credit rating drop, in which case you can see bye bye to the economy.
Persons without argument hide behind their opinion
kowenicki said:
Borrowing is set to surpass tax revenues as the Japanese government’s most important source of income this year, raising fears that even the slightest increase in bond yields could spark a global sovereign debt crisis. The land of the rising sun has long been proof that countries can run up debts while avoiding a crunch date, but as it finances deteriorate, it is being hit by the double whammy of falling demand for Japanese government bonds. The country’s demographics, which proved beneficial in the 1990s, as the ageing population invested heavily in JGBs in the run-up to their retirement, are now working against it. As these people move into the decumulation phase, they are selling down their bond holdings and the household savings ratio is set to fall below zero. Institutional investors are creating little new demand with the same money just washing round the system and international investors are unlikely to take up the slack for a yield of 1.5%. So who is going to fund the Japanese government’s deficit in the future? Dylan Grice, a strategist at SG, warns: ‘If international investors were to demand triple the current 1.5% yield, pricing JGBs in line with international bond market peers the game would soon be up because Japan’s current debt service already amounts to 35% of pre-bond issuance revenues. ‘Next year, tax revenues will be less important than borrowing as a source of income. So I doubt there is any yield international capital markets can find acceptable that will not bankrupt the Japanese government.’ Any deepening of Japan’s problems will undoubtedly have massive consequences globally.
Grice, in his latest Japan update (this is a good read but quite technical**) warns that as Japan’s retirees run down their wealth, the country’s policymakers will be forced to sell down assets including US Treasuries. It currently holds around $750 billion T-Bills, or 10% of outstanding Treasury stock. ‘At the very least I would expect this to trigger an international bond market rout scary enough to spook all other asset classes,’ he says. After selling off surplus assets, the Japanese government would be forced into budget cuts, or worse still to start printing money sending the country into depression. ‘It will be a depression tomorrow whereas draconian spending cuts would be a depression today,’ Grice warns. He believes the resultant capital flight would ‘probably be enough to collapse the yen’, which would have profound implications for Asia. Perhaps the more immediate question for Grice is whether Greece will beat Japan to it, albeit with much less far-reaching consequences. http://www.citywire.co.uk/professional/-/news/market-reports/content.aspx?ID=377284&re=8138&ea=93584&Page=1 |
This is why they are recieving 9.7 billion in aid from the ODA I suppose.
But does it not surprise you how they have managed to remain in recession for the past 10 years without going completely bankrupt? They have a strong enough inport export ratio to hold off recession to the larger extent, they are servicing their debt, all be it not completely, it is enough to keep themselves above the water line.
Unlike the UK!
gamelover2000 said:
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This is not always a good thing!
kowenicki said:
they may, and it has been rumpoiured they will, just kick greece out of the EU of course. |
These rumours have little substance. It is not as easy as that - to give a member state the boot, I am not sure it is even possible - at least under the current circumstances.
The big question here is will the EU let Greece default on it's debt, this is very unlikely.
Greece blatantly lied so should be punished but how?
Greece is not a very important part of the greater E.U. economy.
Greece might end up dealing with the IMF?
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