Meanwhile, Japan, one of our biggest creditors, is starting to go over the cliff.
Jan. 27 (Bloomberg) -- Japan’s credit rating was cut for the first time in nine years by Standard & Poor’s as persistent deflation and political gridlock undermine efforts to reduce a 943 trillion yen ($11 trillion) debt burden.Coherent strategy?!? What kiond of coherent strategy can you have when you're debt load is 200% of your GDP and you've grown accustomed to massive deficit spending? They're doomed. Before they go down, they're going to sell about $900B of US Treasuries.
The world’s most indebted nation is now ranked at AA-, the fourth-highest level, putting the country on a par with China, which likely passed Japan last year to become the second-largest economy. The government lacks a “coherent strategy” to address the nation’s debt, the rating company said in a statement. The outlook for the rating is stable, S&P said.
So forget about high speed rail and green energy and higher education and all the rest. It's time to grow up.