Taps Coogan – December 29th, 2021

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Via Robin Brooks, Chief Economist at the Institute of International Finance, the Bank of Japan is still winning the race to monetize its government’s debt.

As the chart highlights, the Bank of Japan holds over 40% of Japan’s national debt, followed by the ECB, and the US.

With population growth peaking out and working age population in contraction since 2008, the Eurozone looks primed to follow in Japan’s economic footsteps with even more speed.

Moving ‘up’ on the chart above means a central bank is buying debt faster than their respective government is issuing debt. In the case of the US, the Fed has bought about twice the amount of Treasury debt issued since the start of the Covid pandemic.

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