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Using Sex To Sell Japanese Government Bonds
Web Producer, CNBC
This comes after this week's interesting advertisement, placed in Japanese magazines by the Ministry of Finance, which attempts to use sex to sell government bonds. Click here for Japan's full advertisement.
Why the push to sell these bonds? According to our sources, Japan is out of money, currently spending twice what it makes.
The essential point is that Japan's working-age population peaked last year, and as a result the country has to pay out more than it takes in, due to a secular population decline.
In addition, rating agencies have turned up the heat by threatening to cut Japan’s sovereign debt rating unless the government devises a plan to cut its debt. Standard & Poor's already cut its outlook for Japan because it lacked a plan back in January.
Japan’s central government expenses will be 96 trillion yen, but they are spending twice this amount; the country’s debt service alone is 20.2 trillion yen (50 percent revenues) and its social security cash expenditures at 24 trillion yen.
The bottom line: it is plausible that the world’s second largest economy is about to enter a real bond crisis and soon the Greek tragedy may very well take a back seat.
Related Links:
- Japan Refocuses on Debt Problems
- Japan's Ruling Party To Pledge To Balance Core Budget
- Japan's Ratings Outlook Cut on Lack of Plan
"The Strategy Session," hosted by David Faber and Gary Kaminsky, airs weekdays at Noon ET on CNBC.
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