Soros Adviser Turned Lawmaker Sees Crisis by 2020: Japan Credit
“I decided to become a politician because I think financial crisis will come sooner or later,” Fujimaki said in a Sept. 24 interview in Tokyo. “This total debt will continue to increase. I don’t think Japan can survive until 2020. ”Yields on 10-year Japanese government bonds may jump to 70 percent based on what happened in Russia when it defaulted in 1998, Fujimaki said. The benchmark yield is now the lowest in the world at 0.68 percent and the cost to protect the sovereign debt from default is near a four-month low at 62 basis points.
Before sweeping to power in December elections, Prime Minister Shinzo Abe’s Liberal Democratic Party outlined in 2011 a plan known as the X-day project to fend off a potential bond crash. Public debt totaled 924.4 trillion yen ($9.37 trillion) that year and has ballooned to more than one quadrillion yen, more than twice Japan’s gross domestic product, the highest ratio globally. Abe is set to decide on Oct. 1 whether to raise the 5 percent consumption levy.
“It’s inevitable we will see a very big mess and the LDP has to step down,” said Fujimaki, who won his upper house seat on a Japan Restoration Party ticket in the July 21 ballot.