July 16, 2015


  • Greek Debt/GDP Ratio is currently around 180% and, more importantly, the Greek Government Debt/Government Tax Receipts Ratio is 600% (6 x). These debt ratios will, of course, rise further after the bailout.
  • Greece is close to primary budget balance (it was 1% in primary surplus late last year and has a cyclically adjusted primary surplus of approximately 6% of GDP). The Greek 10 Year Yield is around the 12% level.
  • Greece has a current account surplus.


  • Japanese Debt/GDP Ratio is currently 230% and, more importantly, the Japanese Government Debt/Government Tax Receipts Ratio is 2200% (22 x).
  • Japan has a primary budget deficit of 7% of GDP and a cyclically adjusted primary deficit of 6% of GDP. The Japanese 10 Year Yield is 0.44%
  • Japan has a current account surplus.

Japanese Debt is approximately 22 x government tax receipts while in Greece it is 6 x government tax receipts. Japan also runs substantial structural deficits. This raises the question, why is Greece in crisis and Japan, with yields near zero, not?

Simple, monetary autonomy – having your own central bank.  The chart below shows the benefit of this.

2015.16.07 BoJ Debt

The Bank of Japan is accumulating vast amounts of bonds, it has gone from owning 7% of the outstanding stock two years ago to almost one quarter today.

So much for monetary autonomy, you truly can pretend there is no problem when you have a friendly central bank to buy your debt…