Japan's debt-to-GDP could hit 1,908% by 2100: Analyst

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Rupert Hargreaves
Published on
Updated on
The power of compounding once described as being the eighth wonder of the world by Albert Einstein, is well known for being an investor’s best friend. If you manage to compound your wealth at a steady rate of say around 10% per annum for the next three or four decades, you’ll do pretty well for yourself, and you should be able to retire comfortably — barring any unforeseen shocks.

Japan Demographic Collapse – A Look At The Dying Country …

Unfortunately, the power of compounding works both ways. If you or your business is unlucky enough to be in debt, without a careful debt reduction plan, debts and interest on debts can soon spiral out of control. Japan May Never See Inflation Again This is exactly the situation Japan could find itself in if the country does not get its financial house in order according to analysts at Source, the multi-asset research platform.

Japan’s debt load is growing rapidly 

To the outside observer, it may look as if Japan’s debt position has already spiralled out of control. The country’s gross government debt to GDP ratio climbed from 67% in 1985 to 248% in 2015 while the net debt ratio rose from 26% to 128%. However, there are a few unique features that have enabled Japan to run this kind of deficit without the country collapsing in default.

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Sign up now and get our in-depth FREE e-books on famous investors like Klarman, Dalio, Schloss, Munger Rupert is a committed value investor and regularly writes and invests following the principles set out by Benjamin Graham. He is the editor and co-owner of Hidden Value Stocks, a quarterly investment newsletter aimed at institutional investors. Rupert owns shares in Berkshire Hathaway. Rupert holds qualifications from the Chartered Institute For Securities & Investment and the CFA Society of the UK. Rupert covers everything value investing for ValueWalk