Bitcoin Forum

Japan is primed for a collapse.

And look who's coming in with the third highest debt to GDP ratio after Greece...

http://alphapatriot.com/wp-content/uploads/images/2012/Debt-to-GDP-Ratio-by-Country_Source-John-Mauldin.jpg

I don't really think that it is only the gross debt that determines whether the economic system of a country is going to collapse or not.

When we take a look at Greece, they could easily receive more money from the EU by just applying to the given rules. However, they appear to be too stubborn. Sure, these rules are not nice, but if you see how much money the EU is pumping into Greece (in order to try to save it, remember that!) I think they're in a position to set the rules.

They sacrifice some sovereignty for a bail out from the EU because their debt is out of control and they can't pay for it.

They can do that. The US debt is out of control and they have no outside entity to sacrifice their sovereignty to for a bailout.

Other than the Federal Reserve who will have to print out a whole lot more money.

...

Here's what I would be watching for.

1) If there is a "contagion" (problems similar to Cyprus & Greece spreading to countries like Spain & Italy), and if the negotiations for other countries go poorly, then bigger countries like France are at risk.  If France has big problems, then Germany will for sure.  If Germany looks like it will go over the falls, then the USA will too -- in 48 hours, maybe less.

2) Perhaps the ECB and European leaders will decide to "Ctrl P", print the money to cover losses from Greece.  Zero Hedge JUST reported that the Euro was down almost 1.5% (trading started some 40 minutes ago if I read that right).  1.5% is a big move in foreign exchange.

3) One should not forget about or ignore Japan and China.  Both are places where an accident could easily happen.

4) My guess is that the US$ will be a relative safe haven, for at least a while.

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Watching and taking action are two different things.  Even in America it now seems prudent to have a big chunk of CA$H outside the banks now.

Gold and Bitcoin too.

To have some chunks of cashs and other kind of currency (like Bitcoin), and things like gold etc is a wise choice if you ask me. I'm afraid that once Greece actually collapse, indeed more countries might follow. If that happens, I think an effect will be triggered that more countries (and bigger countries) will face the same future. If we are really going to experience national and international bank runs and other problems with our economic system, I  think Bitcoin and gold, silver etc will be worth much more: or, better said, will be worth at least something.

Japan has a stronger economy with much more exports and more reserves, in fact some american banks made the Greece bankrupt

Most of the Japanese debt is being held by the Japanese passport holders, unlike the case in Greece and the United States, where foreign institutions are holding a majority of the national debt. And the Japanese are doing their best to bring down the national debt, with some success achieved during the last few years. Japan is in a much better position, when compared to the United States.

I agree WALL ST was one of the main reasons Greece crashed..and no one talks about this..Also the phat corrupt politicians and judicial system in Greece and also EU laws..Greece being the cradle of democracy itself by principle alone has to stand up to the bullying and reform its own house. Now there is a ministry of corruption so if that gets to work and weed out all the nasties, gather up all the black monies that were taken out of the country by the elite, punish through a strong justice system all those that crippled the country by default and bring in alternative economic solutions to the Country, then things can get better for the Greeks. If China starts selling the U.S trillions of bonds it holds, then we see how the U.S Economy will get pear shaped but for now China is holding the U.S in its hands..

Consider what happens to a population that is A) shrinking, while B) the government continues to pile on additional debts to stimulate the economy, which is exactly what Japan is doing with its last-gasp Abenomics economic policies.

Right now more than 60% of the Japanese tax revenues are used for servicing the debt. This is a huge amount, and can't go on for ever. They need to decrease their spending, especially in the defense sector. But right now, I don't think that it is possible, as the threat of a Chinese invasion is looming large.

Also the older population are living very long and there is a labor shortage and big burden on the young as many Japanese are not getting married or having children. There is a big demographic problem at present in Japan that needs to be addressed if the rest of the economic issues need to get solved. The same with Greece, you have too much of the population living in the cities so infrastructure in the small towns and villages and agriculture along with small manufacturing has to blossom again.

japan situation is different they are not under a central authority, they are under their own istituion, their crisis can be fixed like greece would fix their economic issue when it will leave europe, on the other hand, italy seems to be the third that is akin to greece, i think they have a bigger chance to be the next one

A lot of discussions have been ongoing on the Japanese demographic crisis. But still, I feel that the demography there isn't as bad as some people would like to project. The birth rates are really low, but recently Japan overtook Germany in that parameter. This is a big achievement, considering that Japan is a homogenous society with uniform birth rate across the regions, and Germany is a multicultural society with a large high-fertility immigrant population. Also, the health sector in Japan is quite impressive, making it possible for retirement age to be extended considerably.

I expected other countries from south Europe like Spain, Portugal, Italy, Malta...Japan is imho different case and those graphs are not applicable for them like for EU countries..

How many of the PIIGS - Portugal, Ireland, Italy, Greece and Spain are stronger after the economic recession which started in 2008?

These countries received huge bailouts and some are still feeling the affects of this.

Most of these problems started with having too much sovereign debt. As long as these countries have a strong economy the sovereign debt would not be a problem.

Greece have a weak economy linked to a corrupt government..  :(

i think greece is an exception, because, if i'm not mistaken Greece's economy was weak even before the entrance to the eurozone, so it's not european union fault , on the other hand i don't recall any other weak(in economy) country that entered the eurozone

so it is unlikely that we get another case like that for the time being

The Greek economy was in a much better state, when compared to that of its neighbors (such as Bulgaria). But what happened is that, once Greece was given the EU membership and access to loans, the governing politicians from the PASOK and the New Democracy used that opportunity to get themselves rich. These two parties engaged in unprecendented corruption, and the EU never complained about it. But now the EU is having problems with the SYRIZA government, as they are trying to revive Greece.

According to me one of the main reason for Greece economy fall out would be hosting the Olympics in 2004, which cost them the much money than the actual estimation of €4.5 billion. Did Greece has taken the right decision when they join the Euro ?

Puerto Rico....


http://www.zerohedge.com/news/2015-06-28/here-comes-prexit-puerto-rico-death-spiral-governor-says-debts-are-not-payable-refus

The 2004 Olympics is just the tip of an iceberg. The initial costs were estimated at €4.5 billion, and they ended up spending almost €10 billion. According to the researchers, more than half of that amount was lost as a result of corruption and mismanagement, and was moved quickly out of the country to various offshore tax havens.

This. That graph looks like it's lacking fundamental countries. Any of the south european countries is in danger to leave the euro, since they are all north's bitches. Japan doesn't owe anyone debt but their own citizens, they have that huge advantage.

i'm not sure because the graph show that they have ssome trouble, they are sitll far away from a disaster like greece, their line look stable in the last frame time, so their are approachign a recover, it might be that greece will be the only one leaving the eurozone

and do not forget that the crisis is a bit reduced now, all around the world, for example i know that in italy there is less unemployment now is 0.6% less than the last eyar, so there are small progress

Many more countries are "recovering" from the crisis indeed. However, here in The Netherlands they speak about "recovering from the first part of the crisis". What I hear is that economics expect another crisis to come / another part of the crisis will come, which might be even worse than the crisis we have experienced yet.

But indeed, I think it's good to see countries are recovering now. We experience the same in The Netherlands now, as it appears to be easier to find a job now.

Exactly. Around 95% of the Japanese Government Bonds, by value are owned by Japanese individuals or local institutions. Check this:

http://static.cdn-seekingalpha.com/uploads/2013/5/697917_13697155945482_10.png

But this can be quite dangerous. For example, the Japanese banks hold 9 times their tier 1 capital in Japanese bonds. In case the Japanese government defaults in the interest payments or loan repayments, these banks will immediately become insolvent. Even a slight devaluation of the Japanese Yen (JPY) can be catastrophic to these banks.

Japan's a strong economy making high quality sophisticated manufactured products which it sells all over the world. It's impossible to compare with Greece which needs heavy restructuring everywhere. Greece used to sell olive oil, but Tunisian oil is cheaper. Greek wine? I've seen cheaper French wine! And wine from Moldova is for nothing, since Putin blocked all exports from the little country.

Maybe Greece doesn't belong to Europe. If it were in Africa, nobody would care about it.

It is looming because mr. Abe needs it to be looming.

A gigantic waste of sparse capital. Only rodents use the stadiums now.

Only a small part of the total expenses (€10 billion) was used for the construction of the stadiums and other sports facilities. Most of it was used to improve the infrastructure. But the problem was that more than half of the amount got stolen by corrupt people, and no one bothered to conduct an investigation then.

This could be worse than Greece. Greece doesn't pay the IMF and the IMF will just have to deal with it.

Japan doesn't pay the banks and pensions and it hits its own citizens. Double hit.

I agree with you on that corrupt part. Yesterday I heard the King of the Netherlands had planned a holiday to Greece. However, in order to assure his safety, an extra piece of land had te be bought near his holiday house worth $35.000. However, as soon as they heard this land was going to be bought for the security of our King, they suddently had to pay almost half a million euro's for the very same piece of land... Corruption!

Corruption is the one-egged twin of governments.

Still, the capital used for the games were drawn from the people in the three usual ways that a welfare state is paid: Taxes, expansion of the money volume and galloping loans. And it was not used on the most prosperity creating way. It never is, with the government. The market is required to do that.

The question is, if Greece managed to leave euro, that could mean other countries which are also in debt can also follow suit and do the same. Eventually when more countries follow the same action, it can only mean that the whole union will collapse. These has been projected to happen for some time now and I see no other solution.

Maybe, in the end, that's the best solution: a collapse of the whole union. Although it's hard to say, but I think many (wealthy) countries in the EU think they should never went for the Union in the first place. Many people here in the Netherlands argue that we should have kept the Gulden instead of going for the Euro. This has huge advantages, but sure, it also has disadvantages.. I don't know what would have been the best.

You are right, when after greece another country will left the euro than its over.
But it will be a new beginning, every country will choose again his currency,
it will be the best way in my opinion like it 15 years ago was in europe.

In this case, Japan might be having an advantage when compared to Greece. Greece has no freedom on extending the deadlines, or lowering the interest rates. On the other hand, Japan is having the advantage of having the freedom in delaying the pension payments (since both the pension fund and the debt issuing body is controlled by the Japanese government), or paying only a part of it.

And If the whole union will collapse, USA will rule on us. We really need to have a UE, with same laws, where goods can circulate without any fee. Only in that way we can improve our countries. If we come back to be single states, USA and other powers will trade only where is more convenient. The countries with higher debt will go in default and they will buy industries, societies for a bit of money. So, in my opinion if Greece go out from UE, we need to be more united to face this crysis.

Japan did an economical harakiri, it started with mr abe.

Of the three arrows of his plan, they have only executed one; expansion of the money volume. Nothing to see or hear of structual reforms, a politician phrase for starting to do value creation in stead of value destruction. It was probably futile anyway, since they would rely on centrally planned reforms in stead of the market.

The money volume expansion, with the necessarily connected zero interest rate policy, distorts the capital structure (the factories, the farms, the shops, the bulldozers and the trucks), therefore destroys the value generation capacity of the economy. Yes they have no babies and a bunch of old people doing nothing, that is the consequence more than the reason. The tsunami and the triple destruction of nature; earth, air and sea, was a real problem that set them back.

The second arrow was fiscal stimulus, I take that to mean publicly funded and wasted, centrally planned, capital investments. I think they just increased the value added tax.

No, it was a harakiri, they are bleeding, soon to exhale their last breath.

I agree with tineye on this one Japan is able to handle its debt because its internal, if Greece gets the international lenders off its back and defaults it has a better chance at managing internal debt to Greek citizens under a Soverign owned central bank than under the current model its reliant on.
That said it will be painful for a few years akin to grabbing a leech of your skin and pulling it off but I presume they will make a relatively quick economic recovery.

It is interesting that a good chunk of Greece's debt is in part due to military spending and buying defective goods from Germany.
http://www.theguardian.com/world/2012/apr/19/greece-military-spending-debt-crisis
http://www.businessinsider.com/why-greeces-military-budget-is-so-high-2015-6

In Europe there are a lot of countries facing with the problems that are now on stage in Greece. Italy and Spain have very big problems dealing with their economy crisis. I think one of them will be the next Greece. Hope it won't happen, there are a lot of people who will suffer if this happens.

I can't predict who is the next.
But I hope greece is the first and the last..

Puerto Rico just default, is everyone in here sleeping or what?

http://www.thestreet.com/story/13203815/1/why-a-puerto-rican-default-is-more-dangerous-than-you-think.html

And then:

http://www.nytimes.com/2015/08/04/business/dealbook/puerto-rico-decides-to-skip-bond-payment.html

Cant wait to see what happens with the stock market tomorrow.

 Russia will be not next after Greece,but biggest,if we talk about bankrupt.Portugal already is ,so i think France

Very close to be bankrupt is Portoryko,Ukraine already is.List will be long,welcome in 21century paradise world

Tightening policy is an important issue for most families and enterprises. After referendum, more and more people and enterprises can't pay tax and begin to transfer overseas, so the capital will no doubt go overseas.

Portugal already tightened seat belts and this in the way of recovery even though slow, is able to get out of the hole. Spain, Italy, Argentina I believe will be the next to get lost in a deep internal crisis. While the corrupt politician does fortune of taxes paid by the people only the bottom will be the fate of the Country.

Spain has recovered very well and they are doing really good, I don't think that it will really affect them and even if it does, the impact will be 10x as what people have been assuming it to be. I don't have much knowledge about Argentina or Italy but just want to see it is not so easy for economy of a country to just collapse. Shit hit the fans for Greeks but they still got it together, and we are comparing it to A class countries.

The reason why there is no hype about the Puerto Rican default is because nobody really cares about that Island. People from the btc world are not showing their compassion as they were for Greece because they know the chances of bitcoin working out in that island are really less, so they don't even care to know what happens next. I hope things work out for them, otherwise after 10 years they will in debt of 40,000$ on every man, woman and even child.

It's going to be Spain next. They're also in the economic shitter (25% unemployment, large amounts of debt). In addition to that, Spain contains 3 potential countries within it (Galacia, Basque region, and Catalonia) that would take substantial economic power away from Madrid.

Spain has the least probability of being next, it has already overcome its problems and now the rich are richer. There have been improvements in the automobile sector, highest records of sales were created this year. More employment available than before, people are shopping and spending more which proves there is wealth with people, they're contended and economy lives on.

Isn't all that Japan need more citizens? They could stimulate child births somehow or increase the number of immigrants that are allowed into Japan each year. As far as I know (correct me if I'm wrong), Japan still hands out a VERY limited amount of resident visas to foreigners (was something like 500 a year?).

Germany has strong economy and does not seem to collapse in near future.

USA can not have a default as long as USD is the most used convertible currency.

The biggest impact on Bitcoin usually comes when the country starts raiding bank accounts or if their currency will be impacted.

Interesting development to watch though.

But the people need to be aware on Bitcoin first. A country can become an absolute mess like Greece or Puerto Rico right now, and BTC may not have an impact beyond mere speculation of already Bitcoiners. We need people to be aware that the alternative exists first, but like some have said, it may take a lot of years before the average population is aware, and in countries like PR and Greece things arrive slower technologically speaking.

I think it all relies on each other. The more adoption in countries which have potential technical infrastructure to support bitcoin and people are aware of it, talking about it and slowly adopting it... The news will of course travel to another country, simply based on hype. As hype increases, even more shop keepers and traders accept btc, and bitcoin grows to be even stronger. Maybe that is enough for a country's interest to peak in btc, just a speculation.