Japan's fiscal death is a warning to the West

[Art_from_Ark]

7. To paraphrase Mark Twain,

"The news of Japan's fiscal death is greatly exaggerated"

95% of Japan's debt is held by the Japanese themselves. Japan is a nation of savers, and the Japanese don't seem to have a problem with investing in their own country's bonds, despite the low returns, because it is for the public benefit. So Japan doesn't have to go begging to other countries to finance its debt. What's more, Japan holds more in bonds from other countries than other countries hold in Japanese bonds. So the situation is nowhere near as bleak as is painted in this Telegraph piece.

The thing that is really hurting Japan right now, besides dealing with last year's disasters, is the high exchange rate. In my opinion, no examination of the Japanese economy is credible if it doesn't include information on how the excessively strong yen has hurt Japan's export industries. Get the yen back to the 100/dollar level and Japan will be doing much better.