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Mulboyne wrote:a fixed-rate, three-year note
hairygateau wrote:The J-Govt starting to panic about the demographic and sell directly to the punters rather than indirectly via the J-Banks isn't really gonna solve anything. All the old people keep on dieing...
hairygateau wrote:Interesting point, but the old geezers are generally those with the savings, and thus indirectly keeping japan's funding costs down (Japanese banks investing in jgb's).
hairygateau wrote:If the outstanding deficit wasn't bad enough, it looks like the new administration wants to maintain high public borrowing in the future.
hairygateau wrote:The example above is good, but it assumes that old Taro exists purely on his state pension as he gets older and older. I think it's more likely that he spends his savings over time on nursing, food, gifts to the kids etc, which will erode his bank balance.
Not true. The standard limit was 3mil yen/day before and it was dropped to 500,000/day due to fraud problems. Anyone can walk into their bank and raise their limit back up to 3mil if they want, maybe higher. My main account is much higher than the standard 500,000/day.hairygateau wrote:The old codgers aren't stupid about the inheritance tax either, hence the introduction of a daily maximum withdrawl amount at ATM a few years ago
I have no doubt that people will stash some money in gold or into other easily transferred gifts. Gift taxes are also very high (similar to death taxes) for this reason. You can get away with a gift here or there but there are limits to how much you can do unless the receiver is going to stash the gift under their futon. (ie Giving a few hundred thousand yen worth of gold or cash is doable, a few million yen worth is probably doable, 10s of millions of yen is going to create problems and raise flags.)hairygateau wrote:and the 10% premium to spot that retail gold dealers (e.g. Tanaka Ginza) trade at as locals look for ways to hide assets from the taxman. Last time I was at Tanaka, the line was 80% old geezers!
FG Lurker wrote:Next though comes the important part: 50% death tax.
FG Lurker wrote:Total savings in Japan is about US$14 trillion. Total debt held by the public in JGBs is around US$5 trillion. I'm sure the old fuckers will be spending some of their savings but there will still be plenty (and plenty of fixed assets such as real estate) to pay off a very sizable amount of the debt without the government having to actually do anything about it.
FG Lurker wrote:Death taxes are going to be a massive boon to the J-gov't for the next 50 years.
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