The Japanese Debt Debacle
I love Gravity. Things go up and then come back down. The physics is easily comprehensible and is evident constantly in our everyday life. Even explaining the concept to my young children is painless. We throw balls up in the air and we watch them return to the ground. An apple ripens and falls to the orchard floor, it never fails.
My kids understand that gravity exists and they understand how to defy it. Fuel, or rather energy, is the only real input required. Enough fuel will propel even a brick into space.
Financial markets and economics are no different. We refer not to the laws of physics but rather to the fundamentals, supply and demand, and the trends.
Defying economic forces is entirely possible much in the same way it is possible for humans to launch a rocket. “Fuel” is all that's required.
The Japanese government debt markets have been defying gravity for what seems like an eternity, especially to many a burnt hedge fund manager.
Running up the largest debt in modern history is no small feat. How have the Japanese done this?
They have provided the “fuel”, in the form of sovereign debt, to finance their country even while their economic and demographic fundamentals have been growing exponentially worse by the day.
The question of when this particular monetary apple falls to the ground lies not in whether gravity exists or not for Japanese debt markets. The real question that we need to ask ourselves is where has the “fuel” been coming from, and is that “fuel” going to continue in sufficient quantity to continue to defy gravity.
The exclusive complimentary report "A Guide to Profiting from the Coming Japanese Financial Tsunami" thatwe have put together should help to answer this question, and hopefully guide you toward ways you might be able to capitalize on the inevitable outcome.
Let us know your thoughts once you read it. Hopefully it opens your eyes to the “gravity” of the situation!
- Chris Tell
"The fact of the matter is this is no longer an exercise in quantitative analysis...It's a question of when, not if." - Kyle Bass