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Japan to sell extra bonds to fund ¥108.2 tril coronavirus stimulus

17 Comments
By Tetsushi Kajimoto and Takaya Yamaguchi

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17 Comments
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The flogging has begun but no life is left...

5 ( +5 / -0 )

Nothing to worry about issuing government bonds to finance the fight against the corona virus. It’s amazing that too many people don’t know the simple fact that someone’s debt is another person’s asset. Increased government debts means increased assets in the private sector.

-1 ( +4 / -5 )

"In a crisis like this, Japan has little choice but to embark on helicopter money like other major economies," said Yasuhide Yajima, chief economist at NLI Research Institute.

'Helicopter money' is the idea that depositing money directly from the central bank into people's personal accounts (or dropping it on cities from a helicopter) would be just as effective in stimulating the economy as traditional quantitative easing routed through banks and financial institutions. No major economy is seriously embarking on helicopter money and it's never been tried on a large scale.

These attempts by the financial industry to make this term synonymous with any form of quantitative easing seems like a deliberate and selfserving effort to erase the radical idea behind helicopter money from public consciousness.

3 ( +3 / -0 )

Must be close to 300% GDP debt by now.

8 ( +8 / -0 )

straining the industrial world's heaviest debt burden, as Tokyo compiles a record stimulus to 

This is not a "debt burden" at all. These Bonds will largely be sold domestically. Domestic debt can be serviced whenever the govt wants - through printing unlimited money to pay the debt off. Surprising that journalists keep suggesting Japan has some sort of "debt problem"

-2 ( +2 / -4 )

If they can print unlimited money they don't have to borrow.

-1 ( +2 / -3 )

So, Japan keeps its self-proclaimed ‘rich country’ status with the money it owes the public. You can bet there will be no relief from city taxes during the financial crisis.

2 ( +2 / -0 )

Adding the cost plus interest to the debt load of everyone born in this country for the foreseeable future. What happens if there is no demand for the bonds on the international market, or if the purchasers demur because they doubt JApan will be able to make the payments or redeem the bonds. The country's credit rating is the same as Slovenia's.

5 ( +5 / -0 )

Japan deflationary nightmare will never end at this rate.

2 ( +2 / -0 )

someone’s debt is another person’s asset. Increased government debts means increased assets in the private sector.

How'd that work out for Zimbabwe and Venezuela?

Higher taxes in future, or a weaker currency turning Japanese savers into relative paupers - one of these outcomes is likely.

Spending money like crazy is the right thing to do at this time though.

Spending money like crazy when things were relatively stable, was daft and stupid. Government's need to be fiscally prudent in the good times, so they can go crazy with the spending when it's actually needed (e.g. not just for the purpose of getting politicians elected). Voters might wise up finally after this crisis.

2 ( +2 / -0 )

govt wants - through printing unlimited money to pay the debt off

The government doesn't print the money.

The government (Ministry of Finance) issues bonds, and the big players in the bond market will buy the bonds so long as the Bank Of Japan is happy to "print" money to buy them off those big players in the bond market.

So long as the Bank Of Japan is happy to bankroll the government in this manner, yes things are fine. But when does "so long as" end?

The status quo never lasts forever.

1 ( +1 / -0 )

Have you ever met anybody who has these bonds or bought them? Is the government buying their own printed bonds?

0 ( +1 / -1 )

The bond are bought by Japanese for investments. Japan owns its debts.

2 ( +3 / -1 )

Have you ever met anybody who has these bonds or bought them?

Investment trusts buy them. Private pension schemes buy them. Insurance companies buy them.

If you have a bank savings account, a private pension scheme, insurance - you've bought them and didn't realise.

3 ( +3 / -0 )

you mean raising our taxes a few months ago wasn't enough?

1 ( +1 / -0 )

Forget “Back to the future”, “Borrow into the future”...

Domestic debt = loss of currency value. Yen is a safe haven so this gamble won’t pay off if Japan’s QE exceeds other main currencies like the USD and GBP.

0 ( +0 / -0 )

garbage article.

Didnt even mention the coupon rate or wether this bonds would be hold at junk value

0 ( +0 / -0 )

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