After a solid advance last week for gold and silver, today Michael Pento has written exclusively for King World News to let readers know about the exploding grenade which is going to send, “... increasing money flows into both gold and silver.” Here is Pento’s piece: “Japan has already suffered through 25 years of an economic malaise because they have refused to allow the free market to work its reconciliation magic. Their reliance on government borrowing and spending to rescue the economy has proven to be a miserable failure.”
Michael Pento continues:
Because of this fact, Japanese politicians have succeeded to increase the debt to GDP ratio to 237%, which should have already caused a collapse in Japanese Government Bonds (JGBs) and the Yen. However, JGBs have held their value for two reasons: The Japanese own 92% of their sovereign debt; And, up until now, deflation has reigned over the island....
“Since foreigners do not own a large portion of Japanese bonds, there isn’t a big concern about a mass exit from JGBs due to the fear of a weakening Yen. If foreign ownership of sovereign debt was more in the area of 50% (like it is in the U.S.), there would be a palpable fear on the part of those creditors that their wealth could be wiped out upon currency repatriation—especially in light of the new administration’s love affair with inflation and a falling currency.
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Michael Pento continues:
Because of this fact, Japanese politicians have succeeded to increase the debt to GDP ratio to 237%, which should have already caused a collapse in Japanese Government Bonds (JGBs) and the Yen. However, JGBs have held their value for two reasons: The Japanese own 92% of their sovereign debt; And, up until now, deflation has reigned over the island....
“Since foreigners do not own a large portion of Japanese bonds, there isn’t a big concern about a mass exit from JGBs due to the fear of a weakening Yen. If foreign ownership of sovereign debt was more in the area of 50% (like it is in the U.S.), there would be a palpable fear on the part of those creditors that their wealth could be wiped out upon currency repatriation—especially in light of the new administration’s love affair with inflation and a falling currency.
Read More