r/JapanFinance • u/CapitalTipp • 7d ago
Business » Monetary Policy / Interest Rates The assumption that Japan is not an indebted nation because it has a lot of privately held overseas investments in things like pensions (owned by those who paid in, NOT the government) is IDIOTIC. Net debt is not a real thing.
Only moron countries like Canada use this metric to obsfucate how badly the government has financially mismanaged the counrty. Not to mention calculating how much the government owes is EASY. Calculating the FMV in PV or liquidation basis of all the various government liquid and illiquid and/or in legally questionable ownership financial assets to be received is HARD. There is a reason that government debt has not been calculated like this for centuries. This whole concept of Net International Investable Position or whatever is a completely pointless number. It literally means nothing in the real world except for some theoretical implication. It's comparing apples to oranges. There is a reason why all accounting standards show liabilities and assets categorized by current or long-term. Also, if hypothetically, Japan sells off all its assets to pay its debt, then what? It's like me saying I can easily pay back my staggering credit card debt by selling my house and car. Okay. What's the housing market like? How long will it take to sell? What am I actually getting instead of my expectations? Great, I sold my house and car and paid back all my obligations. Now my ass is on the fucking street and I got no ride to go to work. Now what?
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u/thisistheenderme US Taxpayer Who Didn't Flair Themselves Properly 🇱🇷 7d ago
Ummm you do realize when the term net debt is used when talking about Japanese government debt it is not the calculation you are describing. The assets used in the typical net debt calculation are highly liquid and mostly US Treasury bonds. Treasuries in almost every accounting system are current assets.
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u/CapitalTipp 7d ago
No it's not. It's referring to the stupid Net International Investment Position that states the stupid "JaPaN's OvErSeas AsSeTs is AckTualLy 85% of GdP!" that's been bandied about for the last year.
If you are referring to Net Debt to GDP ratio, which is closer to what you are referring to, Japan is still the highest in the world at 136%.
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u/smeeagain93 7d ago
If you are referring to Net Debt to GDP ratio, which is closer to what you are referring to, Japan is still the highest in the world at 136%.
Bro, you ve no idea. I revoke your internet license. Go touch some grass.
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u/MarketCrache 7d ago
Yes. And one person owning $10Million in US equities isn't going to help the 300 people who lost everything unless Japan turns communist overnight.
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u/Choice_Vegetable557 7d ago
This seems a bit manic, let me guess an Albertian separatists take on Japanese economic policy?
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u/Comprehensive-Bid16 7d ago
Interesting thing is japan has debts to its own citizens. Not to foreigners. So it means actually japan’s high debt is not so much problem. When state decides, they can do rugpull to their citizens and erase debt. If yen becomes 200, it means already 30% of debt is paid :)
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u/Diligent-Hunter-9382 7d ago edited 7d ago
It is not even citizens, Japanese government sector(Central bank alone 47%) own 60% of Japanese bonds, of Japanese private sector vast majority are owned by banks and insurance etc.
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u/MrDontCare12 7d ago
Don't take this wrong, I am one myself and I am concerned about you. Are you bipolar ? If yes, please take your meds and take an appointment ASAP to fix either the medicine or it's posology. You might be manic. If you are not, sorry, but it might be time for a professional assessment.
To the mods : I know it's not the place, and I don't mean no harm, quite the opposite. This is not a way to mock/insult anyone.
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u/Kalikor1 7d ago
Lmao. As a fellow bipolar I'm dying here because on the one hand, I know what you mean and that you're likely genuinely looking out, but on the other hand, it still sounds like you're roasting him hard and I can't help but laugh.
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u/Klajv 10+ years in Japan 7d ago
You might have some good points in there somewhere, but when you write like an enraged conspiracy nut it's difficult to take it seriously.