Japanese Finance Ministry To Japanese Bondholders: You’re Screwed!

TBI -Testosterone Pit ^ | 9-25-2012 | Wolf Richter

[blam]

Japanese Finance Ministry To Japanese Bondholders: You’re Screwed!

Wolf Richter, Testosterone Pit
Sep. 25, 2012, 7:53 AM

This has got to be the icing on the Japanese cake. The otherwise bland website of the Japanese Ministry of Finance, more specifically the FAQ page on government bonds, has been catapulted to stardom on Facebook and Twitter.

Not in a good way. As you flip through the MoF’s website, page after page, you will mostly see zero Facebook likes and zero tweets. Social media and the MoF ignore each other.

But go to the FAQ page, to item 4, Government bonds. Under the second group, skip past Tax questions for individuals, Miscellaneous (Is it a crime if I make a copy?), Price and yield questions, and Coupons to the infamous question 5: “In case Japan becomes insolvent, what will happen to government bonds?“

Tweeted 1,645 times, liked on Facebook 3,733 times!

The MoF website isn’t some blog to be ignored (at your own risk) but the official voice of the most important ministry of the most indebted country in the world, whose debt will reach 240% of GDP by the end of this fiscal year. The country borrows over 50% of every yen it spends, and it spends more every year. With no solution in sight. Other than more borrowing. Certainly not cutting the budget, which would be too painful. It wouldn’t be enough anyway. Even cutting the budget in half would leave a deficit.

And the recently passed consumption tax increase? It will raise the tax from its current 5% to 8% in 2014 and to 10% in 2015, way too little to deal with the gigantic problem, and years too late. Yet it won’t kick in unless GDP grows at least 2% per year—which has practically no chance

(snip)

[The Great RJ]

This will be the USA in 2016 if Obama is re-elected.

[Buckeye McFrog]

I believe the Japanese character symbol for that is a Phillips head self-tapping...

[freedumb2003]

"You f'd up! You trusted us!"

[Red Badger]

Who are the bondholders?...................

[dblshot]

Japan-too big to fail?

[Emperor Palpatine]

Looks like only one solution.

[reed13k]

In Japan the vast majority of bondholders are private citizens and companies.

[TYVets]

This will be the USA in 2016 if Obama is re-elected.

0bama screwed the General Motors bond holders.

Practicing for big things?

[GOPJ]

A selective default. Bonds will retain their “value,” but the government won’t redeem them when they mature. It will redeem them in bits and pieces, stretched into all eternity, as it sees fit. You’ll die before you’ll see your money.

"Your bonds are safe if you live to be a thousand years old - BECAUSE that's when the politically unconnected can collect... yep - us in 2016 IF Obama's re-elected...

[Myrddin]

The guy holding the sword in his dress uniform pants will be buying new pants after the blood spatters from the beheading. Seppuku can be pretty messy.

[bt_dooftlook]

The Vapors - Turning Japanese
http://www.youtube.com/watch?v=gEmJ-VWPDM4