Are there precedents to the situation that Japan, Italy and Greece are in?

Is there a precedent to that situation they are in? Meaning a country with a very high debt to GDP ratio that doesn't improve (and the improvement could come through devaluation of the currency, default, etc but these 3 countries dont seem to like that, at least to not any significant extent)







Are there any examples of countries that went through that a long-time ago? What is the end game here?

 

Germany went into "austerity" after WW1.

Though it depends on the people. It'll probably not be like Germany pre-WW2 and not like some African countries today, but somewhere in the middle.

It's simply bad/centralized/externalized management, but the outcome will depend on the people.

 

Japanese debt is mostly owned by Japanese corporations so it's not apples-to-apples comparable. Aligned objectives.

 

Tell me again how Italy and Greece can devalue their currency and EU allows them to default?

 

I agree.

As a layperson, it seems all Japan does is take money from one pocket and put it in another?

 

They would have to exit the EUR zone and then do it

 

It is public debt actually.
https://thediplomat.com/2013/08/japans-debt-about-3-times-larger-than-aseans-gdp/

 

Never said it wasn't. But it's quite different than foreign hedge funds owning it as their only obligation is to the investors. Meanwhile Sony and Mizuho have a vested interest in the success of the Japanese government.

 

For the weaker Eurozone countries they continue to gradually improve as most have done until the next financial crisis. At which point Germany and France either see it in their best interest to bail them out and they get bailed out, or they don't and they leave the Eurozone and their currency devalues and it's a self-correcting problem which is as it has been for most of the rest of history. Much of the weak Eurozone countries issues stem from the artificial construct of the Eurozone and the fact that language and other barriers mean that labor doesn't freely flow while capital does. Really a structural problem with the entire concept, but as long as the benefits for the richer countries outweigh the downsides they'll make it work and when it no longer does they'll break up. The debacle of Brexit is probably giving everyone some pause now though, especially given it didn't even involve the common currency (or Schengen).

 

And Japanese households.