Sovereign world debt has doubled since 2007 and signs are that it should accelerate unless drastic changes are introduced in tax and rates policies .
US mortgage rates at historical lowest .30 years mortgage at 3.31 % and house sales and building , hardly recovering on isolated actions .
SONY and Panasonic debt lowered to junk bonds level by rating agencies .
Negligible rates are not solving the stagnation of economy and have become a time bomb to debt holders .
The problem of economy is not at all liquidity . There is plenty of liquidity . The real problem is that money does not have a single place to go with reasonable guaranties .
Japan is proving to be a victim of its own currency policies . Using resources to keep yen low is wrong . In the present world situation with stagnation and deflation prevailing , a country bound to export over half of its production simply has no future unless living standards are reduced by half and even so the new balance would be difficult to reach . The best option is to promote a much stronger purchase capacity of japanese citizens acting on taxes to better redistribute resources and promote consumption through a more vigorous medium class . The secondary market of sovereign debt must be promoted to foreign investors too .
US and other countries are unable to control the continuous loss of purchase capacity resulting from growing unemployment and relocation of employment from higher added value areas because of the loss of competitiveness .The US must find the way to redirect investments from Wall St to long term direct investments in areas of high added value employing high rank workforce and consumption must be stimulated specially in population areas with solid purchase capacity while avoiding further private indebtment .
Europe on the verge of extended social unrest because politicians also in Europe or specifically in Europe , ignore that recovering economic balance on purchase capacity loss will only take the markets demand to levels of the last century fifties .
It is time to decide that the only way out is to change tax and rates policies together with a reestructure of world debt , even if a number of investors loose 60 % of their investments in exchange of a recovery of demand by stimulation of long term direct investments in added value areas with a well paid high ranked workforce .
Unless a vigorous middle class is recovered car and other big scale production units are bound to collapse , because demand cannot be based for ever on a growing private indebtment .
The problem is that politicians in charge are not up to the required standards of capacity to understand and solve the situation .
Brahmason
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