Japanese Girl-Band Wants You (To Buy Japanese Government Bonds)

The Japanese government is pulling out all the stops in trying to jam more government bonds down their citizens' throats.

http://www.zerohedge.com/news/japanese-girl-band-wants-you-buy-jgbs

A very subtle form of theft

http://www.sovereignman.com/expat/a-very-subtle-form-of-theft/

Japan GPIF to withdraw $78 bln from assets-Nikkei

And just as I believe the US Treasury bond market is in trouble <click here>, it looks like the implosion of Japanese government bonds (JGB) may win the race into the garbage bin.  I've been predicting the cataclysmic collapse of JGB's for years--and it appears to be coming to fruition, thanks to the natural and man-made disasters accelerating the process.

When an entity is selling "something", it also means it isn't buying that "something" anymore. 

http://in.reuters.com/article/2011/04/24/japan-gpif-idINL3E7FO00K20110424

Gold seen safer than govt. bonds in survey of central bank reserve managers

http://www.gata.org/node/9801

Japan downgrade: The beginning of the end?

http://finance.fortune.cnn.com/2011/01/27/japan-downgrade-the-beginning-of-the-end/

Two years ago I was pounding the table about Japan circling the drain, and was labeled a doomsdayer.   Today, CNN and Fortune Magazine are reporting it.  That's about as mainstream as one can get.

One subtle clarification of the otherwise well-written article is in order.  The author mentions that owners of Japan government bonds (JGB) are the following:

Money manager Vitaliy Katsenelson and Devin Stewart, a senior director at the Japan Society in New York and a Carnegie Council Senior Fellow, agree with Bass. The way they see it, Japan has never meaningfully flirted with a loan default because it has always been able to borrow money from its own life insurance companies, pension funds, and banks.

While it is true that financial institutions are buyers of JGB, they are merely custodians.  The real owners are Japanese citizens who have had said JGB jammed down their throats by a corrupt government, enticing them to take on outsized risks by lending to a bankrupt nation in exchange for minuscule returns of 1% (or less, in some cases).

As noted in the article, the end game will not be pretty, as other developed countries will also encounter this demographic and fiscal problem--including the UK and the US.