{"id":12294,"date":"2015-09-16T06:04:43","date_gmt":"2015-09-16T11:04:43","guid":{"rendered":"http:\/\/olduvai.ca\/?p=12294"},"modified":"2015-09-16T06:04:43","modified_gmt":"2015-09-16T11:04:43","slug":"sp-downgrades-japan-from-aa-to-a-on-doubts-abenomics-will-work-full-text","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=12294","title":{"rendered":"S&P Downgrades Japan From AA- To A+ On Doubts Abenomics Will Work – Full Text"},"content":{"rendered":"

S&P Downgrades Japan From AA- To A+ On Doubts Abenomics Will Work – Full Text<\/a><\/h3>\n

Who would have thought that decades of ZIRP, an aborted attempt to hike rates over a decade ago, and the annual monetization of well over 10% of sovereign debt would lead to a toxic debt spiral, regardless of how many “Abenomics” arrows one throws at it? Apparently Standard and Poors just had its a-ha subprime flashbulb moment and moments ago, a little over 4 years after it downgraded the US from its legendary AAA-rating which led to angry phone calls from Tim Geithner and a painful US government lawsuit, downgraded Japan from AA- to A+.\u00a0 The reason:\u00a0rising doubt Abenomics is working.<\/strong><\/p>\n

Apparently S&P has never heard of the Magic Money Tree theory concocted by economists who have never traded an asset in their lives, in which “countries that print their own currency” have nothing to fear about a 250% debt\/GDP ratio. In fact, the only fear is that it is not big enough.<\/p>\n

Expect the market’s reaction to be that since Abenomics has not worked yet, some nearly three years after it was launched then Japan will be forced to do\u00a0even more of it<\/strong><\/em>, simply because it has no choice – it is now all in, the problem of course being that the BOJ is simply running out of stuff to monetize as even the IMF warned two weeks ago…<\/p>\n

Here is the S&P’s\u00a0full downgrade<\/a>.<\/em><\/p>\n

Japan Ratings Lowered To ‘A+\/A-1’; Outlook Is Stable<\/strong><\/p>\n

OVERVIEW<\/em><\/p>\n