Now that we own all the Irish banks, can we do what the Japaneses do and simply give ourselves credit? Not so easy for the Irish as unlike Japan, we do not issue our own currency. But surely there is some upside to the recent re-capitalisation and nationalisation?
Ellen Brown writes in Web of Debt …
Skeptics asked how a country with a national debt that was over 200% of GDP could be “strong and wealthy.” In a CIA Factbook list of debt to GDP ratios of 132 countries in 2010, Japan was at the top of the list at 226%, passing up even Zimbabwe, ringing in at 149%. Greece and Iceland were fifth and sixth, at 144% and 124%. Yet Japan’s credit rating was still AA, while Greece and Iceland were in the BBB category. How has Japan managed to retain not only its credit rating but its status as the second or third largest economy in the world, while carrying that whopping debt load?
The answer may be that the Japanese government has a captive funding source: it owns the world’s largest depository bank. As U.S. Vice President Dick Cheney said, “Deficits don’t matter.” They don’t matter, at least, when you own the bank that is your principal creditor. Japan has remained impervious to the speculative attacks that have crippled countries such as Greece and Iceland because it has not fallen into the trap of dependency on foreign financing.
Japan Post Bank is now the largest holder of personal savings in the world, making it the world’s largest credit engine. Most money today originates as bank loans, and deposits are the magic pool from which this credit-money is generated. Japan Post is not only the world’s largest depository bank but its largest publicly-owned bank. By 2007, it was also the largest employer in Japan, and the holder of one-fifth of the national debt in the form of government bonds.