Japan and the Cleanest Dirty Shirt

I have mentioned the serious economic issues that Japan is facing. The debt to GDP ratio is the highest among all developed nations. At some point this will cause cracks in the economy, maybe one should call them chasms. Rather than blog long and hard on Japan's future, instead I have decided to post two charts.



As you can see, the number of workers has reached the level of 30 years ago. This will continue to decline as Japan seems to show little interest in reproducing itself.



This is the main reason that workers are declining, Japan's demographics stink, and as the saying goes, "demographics is destiny." Adult diapers are outselling infant diapers. This cannot be good.

Why are Japan's coming troubles positive for the US? 

"[America is] like the cleanest dirty shirt," says Mohamed El-Arian, CEO of the bond-trading firm Pimco. "When you're on a business trip that gets extended and you don't have any more clean shirts, you wear the one that's least dirty." 

Thus when a crisis comes money will flow to the US as it is perceived that it is in relatively better shape. This will give the US more time to put its house in order. This makes me guardedly pessimistic.

The best scenario is that the US puts its house in order, but this will be painful. Better a little pain now than a lot more later on.

Get ready.