Japan's Debt Problem Visualized

Japan step problem at the end of 2012 japan tour with 997 trillion yen in debt as more than 200 percent of gdp and more than eighty thousand dollars per capita is little chance of it ever been paid that whole lot worse in order to understand what are the government accumulator each year the money from households in preparation to the point of tacking and jibing spencer money in the economy and public services then other commitments want to spend more money than 8 weapons that have to borrow it does this by tissue in bio use investors buy them the government get the money investors received interest but when the outstanding debt is too large for
the central bank london the central bank interest rates which basically mean to print money until satisfied with their investment estate investors keybind government iou with meteor the government give you keep spending more than ever sounds great will catch up with the time in history to present a money printing setup inescapable traps just how it works imagine the government outstanding dad is a big box of fixed time then each year it has to pay a small slice of the box and interests you can think of this is a tree that has to fill with incoming funds in normal circumstances tax revenues billy interest expense training and all on weight with other expenditures central bank interest rates for tree becomes shower and this makes it easier for the government to feel betrayed with a squirrel running stream are the richmond teachers overtime and wider and expenditures grow substantially now even a small increase in the average dick on the height of the trade increasing interest expense to the extent that it take them all the tax revenue and when it does the government has to borrow everything it spins bissell me why dance interest expense tree investors catch on and silver bonds interest rates brother and soon enough for government find z score revenue stream it only a fraction of it interest liability even the printing press can help now if the central bank tryst road tax revenues investor salary bands to hire such that the total interest expense prices basildon tax revenues so in the end the situation remains the same in a government inevitable default sofa twitter pan cistern to the spring work at the end of the 2012 fiscal year japan's debt was 23 x revenues and allergy this means that one percent increase in the average debt cost increases the overall it was fixed match by 23 percent of tax reference no 23 percent of tax revenues are already been spent on average does it cost is only about 3 percent away from the point of interest in something through tax revenue all comes down to this can a government cheapest jet cost of this question english between gel exception has been government bonds so as you can imagine a large part of local investment funds are already invested in this means that new investment funds would have to buy the new barnes fencing carshalton corporations these new funds would have to come from the new saving the problem is that you see the population of beijing to households are likely to drive down upon savings bank create an account of treating severe you're reading making it difficult for corporations to generate profits corporation park blackburn with the government needs to borrow for the only option is for foreign investors to get involved but receiving high rate of return external investors find more and more the government stephensons average dad called me will rise to the critical level up or get worse since the bank of japan recently started talking to percent inflation a problem with this is that japanese industrial second if you pull in consumer prices as real turn 21 consumer prices fell by 13.4 said they call the day 2 percent real yield by the bank of japan's new policies going to flip the polarity of this calculation to even get back to where they worth investors will have to charge a nominal rate of four percent combine this with your pants increasing reliance on external capital and you can see just how easily the average debt casterbridge critical level of four percent and ones that happens it's game over​