Its all Economics and makes sense. I believe yesterday, the Japanese Central Bank doubled the money supply to try to increase inflation to reach that 2% level they are aiming for, so I wonder if that would cause them to reach that 4% critical level? This move certainly would certainly help exports by helping to devalue the currency and increase exports and thus reduce the Balance of Trade deficit.

The funny thing is that Japan really has no way out of it, either. Their conservative party is the one that got them into this debt mess in the first place, and the alternatives to the conservative LDP are the Komeitei (the Sokka Gakkai party, sort of moderates), the center-left DPJ, and the Communists, none of whom are really going to be about debt reduction.

Not that i'm suggesting the DPJ would've gotten Japan out of the mess they're in, but as an outsider, it seems profoundly stupid that they elected the LDP back in after the DPJ was in power for only 5 years (compared to the LDP being in power for 55 years before that).

Japanese politics are a strange beast. But also quite slow-moving and boring (odd for me, as i love Japan and love international politics, but i have very little interest in Japan's politics because they are slow moving and not at all personality-driven)

I thought a rise in interest rates leads to lower inflation since people can borrow less money and so consumers have less money to spend so inflation decreases? 

Yes, the US made money SELLING things to countries IN war. Don't forget the US kept out of WWII as much as they could. It wasn't until Japan freaked the US out at Pearl Harbour that they got involved.

As for the country that loses. Britain was near bankrupt from 6 years in WWII and last time I checked we "won", though winning is hollow in the face of such attrocities.

War is good for countries that aren't in it, basically, but only if they can maintain a good trading relationship with one or both sides. Protracted war is always bad economically, unless the country was seriously under-employed before the war started (like in the US in World War II)

Just goes to show their communist government is the closest thing nowadays to good old european fascism, who basically behaved that way towards corporations. It could be trouble one day, but I dare to say that will likely be their saving grace, which is vengefully ironic on an evil sort of way.

The effect you describe is monetary politics. If there is inflation the central banks rais the intrest to make money more expensive and lessen the amount of money in the maket. less money = less inflation. And the other way around, Japan is trying to increase inflation so they print money (by trying to sell more thorugh low interest rates).

What Weedlab is saying is that if the inflation is high the money looses value faster and people are less likely to lend money, so the intrest rates have to cover the inflation for people to keep lending moneyv .

It's two diferent things. Inflation is good for borowing but bad for lending. 

OT: If people felt reluctant to buy japanese bonds couldn't they just make the central bank buy them and wait for the inflation to eat away the debt? It might be bad since most of the japanese bonds are held domesticly but isn't this what the EU is doing and i think the US (i dont really know) as well?

Well ... I wouldn't say it leads to lower inflation, but it is used to combat it with the aim to lower it (and the same things you mentioned are a result of this). There have been situations where the inflation rate has continued to rise despite constantly increasing interest rate levels, and that’s where the situation with Japan’s debt levels comes into focus. Some don’t believe they’ll make the 2% inflation target, but others are worried it may rise too much and cause interest rates to follow suit, increasing the cost of borrowing. So yes, increasing the interest rate does play a part in lowering inflation rate, but how high does it have to go to do so?( Especially when you consider Japan's high debt levels and the cost of borrowing with those interest rate levels).

EDIT Refer To Huiii's post above as well.

The other problem is that China still has one great hell of a lot of modernization to go through. The prosperity and the modernized development is basically concentrated in the easternmost 300 miles of the country, with vast swathes of the country still no further ahead than they were in the 50s. That's going to catch up to them.

How do we let ourselves fall into this trap? Japan's the 3rd biggest economy right now, they have many home grown companies still and yet their debt is through the roof. I kinda think Japan's economy is in such a bad state now that it's government can't do anything to help. Time to spectate maybe, president Abe? Maybe a little deflation would help, but not tons