The Japan Bid… The Economist

Still a good read after all these years… From The Economist, here,

“Japan is already the world’s biggest creditor. Its net foreign assets—what its residents (government, householders and firms) own minus what they owe to foreigners—are worth around $3trn, or 60% of its annual gdp. And that understates Japan’s influence on global asset markets. Since 2012 both sides of its national balance-sheet have grown rapidly (see chart), as Japanese investors borrowed abroad to buy yet more assets.”

“Some see Japan as a template: its path of ever-lower interest rates one that other rich, debt-ridden economies have been destined to follow and will now struggle to escape. But Japan’s troubles also have a direct influence on other countries. This makes itself felt through the country’s considerable sway over global capital markets. The outworkings are strange and unpredictable. Who would have thought that the rainy-day deposits of Japan’s farmers and fishermen would be used to fuel leveraged buy-outs in America and Europe?”