Ambrose Evans-Pritchard, The Telegraph: Olivier Blanchard eyes ugly 'end game' for Japan on debt spiral
Japan is heading for a full-blown solvency crisis as the country runs out of local investors and may ultimately be forced to inflate away its debt in a desperate end-game, one of the world’s most influential economists has warned.
Olivier Blanchard, former chief economist at the International Monetary Fund, said zero interest rates have disguised the underlying danger posed by Japan’s public debt, likely to reach 250pc of GDP this year and spiralling upwards on an unsustainable trajectory.
“To our surprise, Japanese retirees have been willing to hold government debt at zero rates, but the marginal investor will soon not be a Japanese retiree,” he said.
Prof Blanchard said the Japanese treasury will have to tap foreign funds to plug the gap and this will prove far more costly, threatening to bring the long-feared funding crisis to a head.
Read more ....
WNU Editor: Olivier Blanchard sees this bubble bursting in 5 - 10 years. If true .... now is the time to build a nest-egg to protect yourself.
No comments:
Post a Comment