quote: The real problem of the japanese bond market is that it's so big. They already use 50% of their tax revenues to service the debt, compared to the US's ~10%. If the interest rate on the 10 year hits 2%, they'll use 100% of tax revenue to service the debt and it's game over. The 10 year recently hit 1%.
quote: It went from 78.3 in september to a high of 103.50 a week ago. Sure it's more then 20%, but more then 30% would be more accurate.
quote: If you look at the governments that have been having the most problems - Japan, Greece, Italy, Portugul, Iceland - it's a good counterargument to those who say it's ok to continue racking debt up and up.
quote: Japan had been the exception since they've been at over 200% debt levels for over a decade (maybe two). People had been pointing to them as proof that such high debt levels weren't necessarily fatal. But that overlooks the fact that their economy has been pretty much stagnant for two decades.
quote: First everybody will panic so everybody will pile into the US dollar.
quote: Yes, inflation decreases real value of debt. It's actually a very common tactics every first world country, including US, to pay debt. We really depend on inflation or our economy will tank. I'm talking about a slow 2-3% inflation annually, not 30%.