IS JAPAN GOING TO STOP BUYING OUR DEBT?

IS JAPAN GOING TO STOP BUYING OUR DEBT?

Courtesy of The Pragmatic Capitalist

Julian Robertson’s greatest fear may be coming to fruition. There are growing signs of reluctance on the part of foreign banks, to buy American debt.  The problem of debt is beginning to cause even greater problems in Japan.  There is now speculation that Japan will be forced to sell treasuries in order to meet their own budget needs.

Bloomberg reports that Japan has been the biggest buyer of treasuries this year:

Japan has been this year’s biggest buyer of Treasuries, which means it has done more to help finance the widening U.S. budget deficit than any other country. Its holdings have risen by $125.5 billion, according to data compiled by the Treasury. The comparable figure for China, which surpassed Japan last year as the largest international investor in the securities, is $71.5 billion — 43 percent lower.

For now, Japan is denying such rumors, but the very thought is just one more reminder of the problem of debt that continues to plague the global economy.

“There’s absolutely no such proposal right now,” Chief Cabinet Secretary Hirofumi Hirano told reporters today in Tokyo. “That kind of talk often surfaces at this season.”