On Japan’s Bonds & China’s GDP

Ostensibly, Japan’s government bond market appears bound for a collapse. Debt is an astonishingly high percentage of GDP, which is flat-lining, and the new Prime Minister wants to implement unfunded tax cuts. But the Bond Vigilantes might not cause a debt crisis in Japan. Often overlooked, William points out, are the unique features of the JGB market that will continue to shield it from a debt crisis. … Also: The Chinese government has widened its GDP targets to ranges from specific numbers. What it should do is abandon GDP targeting altogether so that it can afford a period of slower growth while it makes the reforms needed to fight deflation and shore up the economy’s foundation.