The Grey Fire Horse

An overview of the 3 key Macro Risks and 2 Potential Accelerants

INTRODUCTION This note examines the growing macroeconomic and political risks associated with elevated government debt. It draws on three decades of analysis of the Japanese economy, the Japanese Government Bond (JGB) market, and the policy frameworks implemented by both the government and the Bank of Japan. Debt sustainability - like currency debasement - is a critical but often poorly understood topic. Over the past 20 years, most advanced economies have substantially incr

Introduction In the three previous articles, I have outlined how “currency debasement” has reduced the spending power of money over time - £1 in your pocket used to buy a lot more than it does today. This is due to the significant increase in the money in circulation, which accelerated in 1971 when the US$ and all Advanced Economies abandoned the Gold Standard. This decision meant that the US Dollar was no longer backed by gold (it cost US$ 38 to buy 1 ounce of Gold in 197