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Milton J. Madison - An American Refugee Now Living in China, Where Liberty is Ascending

Federalism, Free Markets and the Liberty To Let One's Mind Wander. I Am Very Worried About the Fate of Liberty in the USA, Where Government is Taking people's Lives ____________________________________________________________________________________________ "Extremism in defense of liberty is no vice. Tolerance in the face of tyranny is no virtue." -Barry Goldwater-

Wednesday, January 16, 2013

Japan trade numbers are deteriorating badly....


Source: tradingeconomics.com
This trade deficit if it continues and or deteriorates promises to be very difficult to finance. Few external investors are going to look to the safety of Japanese government debt where debt there to GDP is around 250% or opportunity in investment in equity or businesses in Japan where they do not welcome foreigners and make business difficult through byzantine rules and regulations. So, what happens when the Japanese currency starts to weaken or fall apart? Interest rates will naturally have to rise to attract capital. Then, with such a huge government deficit and debt, interest payments by the central government and businesses will start to rise. In a few years, we can imagine that interest on that debt will consume all tax revenues. Then what? The united States should take note.

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