{"id":15475,"date":"2015-12-19T11:52:24","date_gmt":"2015-12-19T16:52:24","guid":{"rendered":"http:\/\/olduvai.ca\/?p=15475"},"modified":"2015-12-19T11:52:24","modified_gmt":"2015-12-19T16:52:24","slug":"japan-still-leads-the-way-towards-our-endgame","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=15475","title":{"rendered":"Japan still leads the way towards our endgame"},"content":{"rendered":"<h3><a href=\"http:\/\/secularinvestor.com\/japan-still-leads-way-towards-endgame\/12715\/\">Japan still leads the way towards our endgame<\/a><\/h3>\n<div class=\"article-options\"><\/div>\n<div class=\"meta clearfix\"><\/div>\n<div class=\"text\">\n<p><a href=\"http:\/\/secularinvestor.com\/files\/2015\/12\/japan_SI.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-12716\" src=\"http:\/\/secularinvestor.com\/files\/2015\/12\/japan_SI.jpg\" alt=\"japan_SI\" width=\"600\" height=\"337\" \/><\/a>Successful investors live by a golden rule: what the mainstream financial media talks about is not important. They focus on what they\u00a0<em>don\u2019t<\/em>\u00a0hear instead. So forget about Yellen for a second. Let go of Draghi, oil, the South African rand and Syria. That\u2019s all in the\u00a0<em>now<\/em>. But investing is about the\u00a0<em>future<\/em>.<\/p>\n<p>We are convinced there is one proverbial elephant in the room in particular that will shape our future. And that elephant is Japan. The \u2018widowmaker\u2019 trade has been claiming financial lives for multiple decades now. That is,\u00a0short JGBs, or Japanese Government Bonds, was so obvious a trade that it never worked. The 10-year yield currently trades at 0.3%, which is close to the all-time low. We\u2019re still waiting for the shoe to drop.<\/p>\n<p>Will it ever drop? We believe it will. \u2018Drop\u2019 might not be the appropriate word. The accumulation of imbalances might trigger a cascade of events that will shake the world at its core. Let\u2019s investigate some data.<\/p>\n<p><iframe loading=\"lazy\" src=\"http:\/\/cdn.tradingeconomics.com\/embed\/?s=jpndebt2gdp&amp;v=201511231326m&amp;d1=19150101&amp;d2=20151231&amp;h=300&amp;w=600\" width=\"600\" height=\"300\" frameborder=\"0\" scrolling=\"no\"><\/iframe><\/p>\n<p>Japan\u2019s debt-to-GDP ratio has hit a unprecedented 230%. You probably knew that. But it doesn\u2019t keep you awake at night. We are genetically wired to focus on\u00a0<em>acute<\/em>\u00a0danger. If a tiger approaches us, we\u00a0<em>focus<\/em>. But if stands still and doesn\u2019t move for years, we turn around in search for other dangers. Wise investors remind themselves constantly of the tiger though. They never let their guard down.<\/p>\n<p>What about the pace at which debt-to-GDP is ramping up? The budget deficit tells us all we need to know.<\/p>\n<p><iframe loading=\"lazy\" src=\"http:\/\/cdn.tradingeconomics.com\/embed\/?s=ehbbjpy&amp;v=201511231343m&amp;d1=19150101&amp;d2=20151231&amp;h=300&amp;w=600\" width=\"600\" height=\"300\" frameborder=\"0\" scrolling=\"no\"><\/iframe><\/p>\n<p>For six years in a row already, Japan scored around minus 8%. And given the flattish GDP, these annual percentages head straight to the public debt pile. Japan\u2019s long term potential real GDP-growth rate is simply close to zero, given the demographics. The latest quarterly print\u00a0<a href=\"http:\/\/www.tradingeconomics.com\/japan\/gdp-growth\" target=\"_blank\">was<\/a>\u00a0a minus 0.3%. This makes the debt grow even faster.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Japan still leads the way towards our endgame Successful investors live by a golden rule: what the mainstream financial media talks about is not important. They focus on what they\u00a0don\u2019t\u00a0hear instead. So forget about Yellen for a second. Let go of Draghi, oil, the South African rand and Syria. That\u2019s all in the\u00a0now. But investing [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[57,88,195,994,353,452,5411,5410,11137,11136],"class_list":["post-15475","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-japan","tag-bonds","tag-debt","tag-endgame","tag-gdp","tag-japan","tag-japanese-government-bonds","tag-jgb","tag-mainstream-financial-media","tag-secular-investor"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15475","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15475"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15475\/revisions"}],"predecessor-version":[{"id":15476,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15475\/revisions\/15476"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15475"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15475"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15475"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}