Japan's Debt to GDP Ratio Surpasses 200%

The Japanese government keeps spending this country into oblivion. After 20 years of repeated efforts at stimulating the economy - with the opposite effect of causing deflation - they keep trying the same old game. When will they ever learn?


The answer is "Never!"


As the BBC announced:


Japan's parliament has passed a stimulus package worth about $61bn, designed to kick-start the country's fragile economic recovery. The stimulus was designed to create jobs, Prime Minister Nato Kan said, through measures to help small businesses and boost consumer spending. The government has already introduced several stimulus packages. Earlier, figures showed that Japanese consumer prices fell for the 20th month in a row in October.

Now, it looks like because of these failed efforts, the rubicon has been passed. Japan's fiscal debt has now surpassed 200% of GDP.

From Activist Post:

The Land of the Rising Sun has the dubious distinction of sporting the highest debt-to-GDP ratio of any industrialized nation in the world. Now greater than 200%, Japan’s relative debt load is bigger than that of Greece, Spain, Portugal or the US. Japan needs to borrow over 50% of GDP this year just to stay afloat, according to the International Monetary Fund (IMF), and its financing needs are expected to reach almost 60% of GDP next year. (See graph below.) Its strength has been somewhat befuddling, especially considering this growing burden of debt. Why has the Japanese currency been so strong? Because despite all of the yen’s problems, Japan runs a trade surplus. Traders view that surplus as a source of funding which can be used to pay down Japan’s skyrocketing debt, making the yen seem like a “flight-to-quality” currency despite appearances. However, Japan’s strong currency is beginning to affect Japan’s ability to export. Competition from China and rising Asian powers such as Vietnam is also beginning to take its toll. Japanese industrial output fell 1.9% in September after dropping 1% in August.

Silver and Gold took a drop today from weeks of growth. I hope you have some. If not, now's the time to buy.