• 25 mins Kinder Morgan Warns About Trans Mountain Delays
  • 7 hours India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 12 hours Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 16 hours Russia, Saudis Team Up To Boost Fracking Tech
  • 22 hours Conflicting News Spurs Doubt On Aramco IPO
  • 23 hours Exxon Starts Production At New Refinery In Texas
  • 1 day Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 2 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 2 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 2 days China To Take 5% Of Rosneft’s Output In New Deal
  • 2 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 2 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 2 days VW Fails To Secure Critical Commodity For EVs
  • 2 days Enbridge Pipeline Expansion Finally Approved
  • 2 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 2 days OPEC Oil Deal Compliance Falls To 86%
  • 3 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 3 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 3 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 3 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 3 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 3 days Aramco Says No Plans To Shelve IPO
  • 5 days Trump Passes Iran Nuclear Deal Back to Congress
  • 6 days Texas Shutters More Coal-Fired Plants
  • 6 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 6 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 6 days Chevron Quits Australian Deepwater Oil Exploration
  • 6 days Europe Braces For End Of Iran Nuclear Deal
  • 6 days Renewable Energy Startup Powering Native American Protest Camp
  • 7 days Husky Energy Set To Restart Pipeline
  • 7 days Russia, Morocco Sign String Of Energy And Military Deals
  • 7 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 7 days China Set To Continue Crude Oil Buying Spree, IEA Says
  • 7 days India Needs Help To Boost Oil Production
  • 7 days Shell Buys One Of Europe’s Largest EV Charging Networks
  • 7 days Oil Throwback: BP Is Bringing Back The Amoco Brand
  • 7 days Libyan Oil Output Covers 25% Of 2017 Budget Needs
  • 7 days District Judge Rules Dakota Access Can Continue Operating
  • 8 days Surprise Oil Inventory Build Shocks Markets
  • 8 days France’s Biggest Listed Bank To Stop Funding Shale, Oil Sands Projects
Alt Text

How To Play The Next Wireless Revolution

The global communications boom has…

Alt Text

Finally: A Way To Invest In Blockchain

Cryptocurrencies and the blockchain are…

Alt Text

5 Big Gainers In Oil & Gas This Week

Energy stocks have been among…

Vault Wars and the $50 Trillion Picture

The picture below is worth a thousand words. And $50 trillion.

This was just released by the Bank of Japan as part of their new "flow of funds" reporting. Basically, it outlines the composition of Japanese household assets versus counterpart households in America.

The major point of note is the discrepancy in savings versus equity investments. Recently, there has been speculation that Japan is not saving as much as it used to. This is a critical issue for the Japanese economy.

Japan is an ultra-low interest rate nation. It has to be. The Japanese government ran up the largest public debt in the world (around $8.5 trillion) trying to bail the country out of the financial doldrums it suffered over the last two decades. (America's total debt is larger, but a significant portion is held by government institutions.)

That debt must be financed. Under most circumstances, the interest payments involved would be crushing.

But Japan has so far dodged that bullet by selling government bonds almost entirely to domestic investors. Investors willing to buy even at ridiculously low interest rates. Helping the government keep its debt service payments minimal.

Japanese citizens have been able to buy these bonds en masse because of the nation's high savings rate. Households had a lot of cash and needed somewhere to park it.

A decline in savings could be catastrophic for the nation. If domestic investors no longer have enough to finance the government debt, Japan could be forced to look to foreign investors. Who will almost certainly demand higher interest rates. Potentially triggering a debt crisis.

But the figure above suggests savings are still going strong in Japan. Currency and deposits make up over 55% of assets for Japanese households. Compared to just 14.3% in America.

This represents about $8.9 trillion in savings that could potentially be mobilized to support the Japanese government debt.

Americans by contrast, hold a far greater amount of their wealth in the stock market. U.S. households have over 30% of their assets in shares and equities. As opposed to just 6.6% in Japan.

Americans are certainly beginning to save more. U.S. savings are up by $1 trillion since the financial crisis broke in 2008. Today, assets in currency and deposits for U.S. households total a not-insignificant $6.4 trillion.

But in terms of the ratio of savings to government debt, Japan is still far ahead. Japanese household savings are over 100% of outstanding government debt. With the American government now sitting $12.7 trillion in the red, household savings are only at 50% of debt.

It seems that Japan is still winning the "vault wars", for the moment.

By. Dave Forest of Notela Resources




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News